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The dysfunctional market

ART TIMES Aug, 2004

Once upon a time at a sailboat show, one of the people who put on the show told me, "This is an industry that doesn’t want to be a business." She meant, of course, that the sailing industry is full of people who are — surprise! — devoted to sailing, and therefore want to be doing business as if they were sailing, as if they were out on the water, mellowed out, laid back, not a care in the world — a great way to relax, but not a great way to move a business, or an industry, forward.

Theater is also a business, and it’s a business that doesn’t want to be an industry. It wants to be about creativity, about play, about spontaneity, about discovery, about sudden amazing outbursts of beauty. It doesn’t want to be about planning two to five years in advance, about contracts, insurance, costs, fundraising, taxes, marketing, publicity, accounting, hiring and firing. Business in all industries is fundamentally a matter of getting a very large number of very small details exactly right all the time. Theater wants to be an explosion, a thunderclap, something amazing that happens right before your eyes. Theater wants to be an art, and it doesn’t want art to be business. Theater isn’t comfortable with theatrical reality; it wants to be the theatrical fantasy.

Unfortunately, of the arts, theater is one of the least qualified to run as the theatrical fantasy would have it run. Theater has to be practiced in public. It requires collaboration and coordination of people and resources. It requires advance planning. It requires money. In my area, a simple all-volunteer production of a public domain script with a cast of three costs between three and five thousand dollars, depending on how much paid advertising you do — which, of course, directly influences how many people you have in the seats.

Which brings one to an odd fact about theater. It exists in a dysfunctional market.

The market for any service — theater is essentially a service industry — consists of the people who want and are willing to pay for the service in question. For an industry to succeed, the market must be willing to pay what the service costs to provide. For the industry to grow and develop, the market must be willing to pay a sufficient premium for the service to permit a level of profit that allows for reinvestment in the industry.

Theater does not have this market. The market is not willing to pay the cost of providing the service. Even the largest, most successful, best-run companies in North America cannot cover their costs through ticket sales. Theater continues to exist only due to various subsidies, some hidden, some obvious. Theater ticket buyers are not willing to pay the true cost of the seat they occupy.

The most obvious subsidy is donations. Individuals, corporations, grant-making organizations and various levels of government support theater through donations. Donations can take many forms. A five thousand square foot theater building in my own area would pay about twelve thousand dollars a year in property taxes if it weren’t organized as a 501(c)(3) nonprofit corporation — a very handsome subsidy. The two theaters in my area most often used by the largest community theater group in the area are both owned by state-funded schools; they would be prohibitively expensive if owned by private commercial interests.

The most hidden subsidy is that provided by theatre artists. Theatre artists will work for nothing. How many businesses have people walking in and competing to be allowed to work for nothing? Some theatre artists do get paid; most of them make less than minimum wage and must hold some other job to actually support themselves. This subsidy is actually the one that counts. All other subsidies combined only allow the industry to function up to the cost level at which employable talent can be had. If theater artists, like most workers, actually demanded to be paid enough to live on, the market — including all subsidies — would not support the industry.

Ultimately, the dysfunctional market produces a dysfunctional art. Theater artists would love to live the theatrical fantasy, but they cannot; they live in the real world, like it or not. Work created for free during the artist’s spare time may be good work, but it will not be the best work the artist can do. People have to deal with the actual options that shape their lives. Very few people with a high level of talent will decide to pursue a life that will not provide them with a decent living. Developing a sufficient number of top-level artists requires that a much larger number of potentially top-level artists enter the field; that will not happen when the reward is so blatantly less than the effort.

Most industries in dysfunctional markets die. There is still a buggy-whip industry in this country, but it is strictly limited to the very small number of people who drive horse-drawn vehicles for recreation. A thriving, flourishing theatrical art will not continue for long in this country — if we can be said to have one now — unless the market is led to support it. It will take an industry-wide effort and a profound change in how the industry does business that will affect how every artist in the industry works. What shape that effort will take, and what changes will have to happen, I don’t pretend to know. All I know is that if it doesn’t happen, the theater industry will come to resemble the buggy-whip industry — small, stagnant, and very unimportant.

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