www.fbbva.es PRESS RELEASE

COMMUNICATION DEPARTMENT

Symphony orchestras take stock of current challenges at the 2nd AEOS- Fundación BBVA Conference: falling attendances, an aging audience, and a deficit that cannot be made up from ticket sales

Madrid, November 12, 2012. “Most Spanish symphony orchestras are in danger of disappearing through lack of funds. There have already been cases of temporary layoffs, and in some regions, orchestras have been placed under the control of different entities, raising doubts about their long-term survival.” This is the disquieting picture drawn by Ana Mateo, acting president of the Spanish Association of Symphony Orchestras (AEOS), at the press conference preceding the 2nd AEOS-Fundación BBVA Conference on “Symphony Orchestras: Their Triumphs and Challenges,” to be held today and tomorrow in the Marqués de Salamanca Palace, Madrid headquarters of the BBVA Foundation.

In Spain, symphony orchestras receive 80% of their funding from public coffers, but their management teams are now examining the experience of other countries in order to identify new financing formulas. The goals, in Ana Mateo’s words, are “to look in depth at the potential of our symphony orchestras, compare the resources at our command to cope with the economic crisis, debate whether the model we have followed remains valid in today’s climate, and examine the orchestra’s role in the musical education of tomorrow’s public.”

At the press conference, Mateo was joined by Rafael Pardo, Director of the BBVA Foundation, and Robert Flanagan, Professor of Economics at Stanford University.

The exchange of experiences and forging of international links are among the hallmarks of this forum promoted by AEOS and the BBVA Foundation, which this year welcomes representatives from the Royal Scottish National Orchestra (United Kingdom), l’Orchestre National de Lille (France), the Deutsche Kammerphilharmonie Bremen (Germany), the Sistema Nacional de Orquestas Infantiles y Juveniles de Venezuela, and the Weill Music Institute of Carnegie Hall (New York, United States). Also taking part will be representatives of the vast majority of Spanish orchestras.

The quest for financial stability Financial stability is one of the key issues for modern symphony orchestras, and most of the afternoon session will be devoted to a discussion of which business models yield the best results. The government spending cuts affecting many European orchestras have forced them to cast around for alternative revenue sources, a task in which their American counterparts are well practiced.

This is the perspective put forward by Robert J. Flanagan, Konosuke Matsushita Professor of Economics, Emeritus, at Stanford University’s Graduate School of Business. Aside from his teaching and research duties, Flanagan has served on the staff of the U.S. President’s Council of Economic Advisers and has worked for the OECD, the International Monetary Fund and the Brookings Institution (Washington DC). His book The Perilous Life of Symphony Orchestras: Artistic Triumphs and Economic Challenges is published this year by Yale University Press.

In its pages, Flanagan analyzes the economic performance of 63 U.S. symphony orchestras over eighteen concert seasons, and his diagnosis leaves little room for doubt: “Orchestras around the world face similar problems: not one of them earns performance revenues (from ticket sales, broadcasts, and recordings) large enough to offset expenses, and most face declining concert attendance and aging audiences.”

Uncertainty is the name of the game, since “most orchestras experience some deficit years and some surplus years. Even renowned orchestras can be exposed to financial jeopardy. Two years ago, the Philadelphia Orchestra – one of the finest in the United States – declared itself bankrupt, though it has since re-emerged after a reorganization that included changes in its labor contracts.”

For Flanagan, the key to success is a combination of three strategies: “Raising performance revenues, slowing the growth of performance expenses, and increasing non-performance income (such as private donations) will all improve an orchestra's financial situation, but none of these approaches alone will eliminate operating deficits. Orchestras have to be good at everything!”

Among the facts uncovered by Flanagan’s research are that “on average a 10% increase in ticket prices would produce a 5% reduction in concert attendance. Although this is good for total performance revenues, it brings adverse complications in the United States, because private donations tend to decline when fewer people attend concerts. One alternative that has worked for the Chicago Symphony Orchestra is to only charge more for the most attractive seats.”

Another strategy is to increase attendance at concerts, “an area where there is certainly room for improvement, since average attendance is only 70% of seating capacity. The problem is that orchestras try to fill the remaining 30% by means of marketing campaigns, even though the evidence shows that orchestras experience diminishing returns to their marketing expenditures, with each additional dollar spent yielding smaller and smaller attendance gains.”

Orchestras, Flanagan argues, have avoided tackling the labor cost issue for fear of igniting conflict, “but now they have no choice. In negotiations this year U.S. orchestras have proposed lower salaries for musicians and staff, pay freezes, revised pension plans,

2 musicians paying more of the health benefit costs, smaller orchestras (fewer full-time musicians), etc. In some cases, agreement has been reached; in others, a strike or lockout has occurred. Just recently, for instance, there have been lockouts at the Indiana, Minneapolis, St. Paul, and Atlanta symphonies.”

The Stanford professor is “hopeful about the future of orchestras, but also a hopeful realist. My analyses of U.S. orchestras has left me with the view that the industry will become more concentrated; that is, there will be fewer orchestras and they will tend to be concentrated in wealthier, more populous cities.”

Ana Mateo, acting President of AEOS, describes the European experience, in which strong dependence on public funding, combined with budget cuts, makes the search for alternative sources a matter of urgency. “We urgently need a Sponsorship Law which makes donations attractive to private initiative. However, the last news we have is that the relevant bill has no date set for its approval.”

Members of Spanish orchestras, she reminds the meeting, have already suffered wage cuts. The model applied, moreover, should not be that of a productive company, but of a not-for-profit organization producing a social good – music. But she also reflects critically on orchestras’ own responsibilities: “Perhaps what we need to do is change mentality, so the primary goal is no longer to achieve a secure post with a permanent contract, but rather to pursue excellence in our day-to-day practice.”

She also calls for Spanish orchestras to be granted “a more flexible administrative regime. The amount of red tape is unbelievable: getting authorization for any expenditure, however small, involves signing three separate forms. There are hundreds of examples like this, which multiply orchestras’ overhead expenses. At the same time, attempts to increase private-sector contributions have invariably run into difficulties. In the Orquesta Sinfónica del Principado de Asturias, for instance, we replaced the standard concert programs – which usually end up in the bin when the evening is over – with a quarterly magazine that includes all the programs and can also bring in advertising revenues. Right away, we ran into problems with the tax authorities, who simply failed to understand that moves like this can actually benefit the public coffers.”

Education for tomorrow’s societies

Increased attendance at concerts is a matter of long-term planning, and what better way than for orchestras to forge links with children in the first stages of school education. The role of orchestras in the process of transforming society and educating citizens is the subject of one conference session. Leading the discussions will be Sarah Johnson and Joanna Massey, Director and Director of School Programs respectively at the Weill Music Institute of Carnegie Hall, New York, who will talk the audience through the details of their Link Up project.

Link Up is a program for third to fifth year primary school pupils (aged eight to ten) which unfolds over the full academic year, and brings together teachers, students and orchestras in a shared educational experience. “Link Up aspires to introduce as many students as possible to the orchestra and joys of music-making through interactive classroom and concert experiences. Through national and international partnerships, Carnegie Hall aims to support orchestras’ existing education programs, strengthen their partnerships with local schools, and provide the highest quality curricula, resources, professional development and other support,” Joanna Massey explains.

This school year alone, 200,000 students, 3,400 primary school teachers and 42 orchestras from across the United States will take part in the program. And considering the 28 editions since it was launched in 1984, it has reached literally hundreds of thousands of students.

3 “Link Up is a highly-participatory curriculum that introduces students to the orchestra and basic musical concepts. There are three areas of focus that rotate annually: ‘The Orchestra Sings,’ featuring melody; ‘The Orchestra Rocks,’ featuring rhythm; and ‘The Orchestra Moves,’ featuring musical motifs and dynamics,” Massey continues. “When schools sign up for the program they receive curriculum resources including a teacher guide, student guides, recorders, a CD of music and a DVD with teaching resources, also accessible online. Teachers are required to attend a professional development workshop for tips on the repertoire and teaching the curriculum. The program culminates with an interactive concert in which students play or sing along with the orchestra on the repertoire they’ve studied.”

The success of the initiative, especially since its relaunch three years ago, has led to its international expansion. “We have entered into a partnership with Orquesta Sinfónica del Principado de Asturias in Spain, and are also working with the Kitchener-Waterloo Symphony in Ontario, Canada and the Pacific Music Festival in Sapporo, Japan. And now that the curriculum has been translated into Spanish, we hope to see its increased use in other Spanish-speaking countries as well,” Massey concludes.

Music as an agent of social change is the idea behind the Sistema Nacional de Orquestas Juveniles e Infantiles de Venezuela, whose origins date back to 1975 and the foundation of the National Youth Orchestra of Venezuela. The Children’s Orchestra was created in 1994 and since then over 1,500 children selected from all around the country have performed within its ranks, as we will hear from Rubén Cova, Coordinator of the Orquesta Sinfónica Nacional Infantil de Venezuela.

But “the System” as it is commonly known, is much more than the sum of its component orchestras. It is a nationwide training program that uses music as a springboard for personal development. Over 300,000 children and young people have come through “the System” in the years of its existence. In disadvantaged neighborhoods and among groups at risk of social exclusion, "the spiritual fulfillment that comes with music and the playing of a musical instrument saves the boys and girls in the orchestras from moral poverty and social complexes, while equipping them with the psychological and intellectual tools to conquer material poverty,” Cova explains. The program is informed throughout by ethical principles, so music becomes a force for individual development as well as entering the everyday lives of families and communities. It also helps, of course, that orchestras’ repertoire mixes academic and popular music.

The initiative has attracted the interest and support of figures like Simon Rattle, principal conductor of the Berlin Philharmonic. Its nationwide scale and its outreach efforts have served to recruit and train a whole generation of musicians, including Gustavo Dudamel and other Venezuelan talents that have shone in concert halls around the world.

A mosaic of experiences

The 2nd AEOS-Fundación BBVA Conference will also be a chance to learn about benchmark initiatives taking place elsewhere. Tess Campbell, Campaign Director of the Royal Scottish National Orchestra; Jacqueline Brochen, Adviser on External Relations and Sponsorship at l’Orchestre National de Lille; and Albert Schmitt, Managing Director of the Deutsche Kammerphilharmonie Bremen, will describe the strategies undertaken by their respective formations to tackle the challenges of the present and ensure a successful progress into the future. New sources of funding, more flexible structures and a wider range of activities are some of the solutions tried – the Bremen orchestra, for instance, is organized as a cooperative.

4 David Ballesteros, violinist with the London Symphony Orchestra, will explain the original socio-educational approach developed by bandArt, an international orchestra founded in Lucerne in 2005, which draws its members from a dozen countries. bandArt is working alongside universities to advance students’ knowledge of music and the orchestra as part of the construction of the European Higher Education Space (Bologna Plan). These programs, which earn course credits, offer a range of possibilities including giving students contact with the everyday life of an orchestra; attending rehearsals, talking to musicians and joining in other activities. Another bandArt campaign involves organizing concerts in places that are usually left out of cultural circuits, such as prisons, old people’s homes, disabled people’s centers, etc, and educating professional musicians about the use of music as a social action tool.

The school classroom is the setting for the LÓVA project, coordinated by jazz pianist Pedro Sarmiento. Over a school year, teachers transform their class into an opera company, producing from scratch a musical theater performance which is entirely pupils’ own work.

The gallery of initiatives on show at the event also includes L'Auditori Apropa, run by L'Auditori de Barcelona and facilitating attendance at concerts by members of groups at risk of social exclusion, and the “Adopt a Musician” scheme operated by the Orquesta Nacional de España and other Spanish orchestras.

The international encounter will close with a round table discussion on “The Training of Musicians for the Orchestras of Tomorrow.”

BBVA Foundation: music support and funding

The BBVA Foundation operates a wide-ranging music program, focusing on musical creation in the 20th and 21st centuries. The multiple activities the Foundation organizes or funds under its head include concert cycles in its Madrid and Bilbao centers, the former in collaboration with Plural Ensemble under Fabián Panisello, and the latter directed by Gabriel Erkoreka. It also collaborates with Madrid orchestra ORCAM, under the direction of José Ramón Encinar, and the city of Seville’s Real Orquesta Sinfónica (ROSS) and Teatro Maestranza, both led by Pedro Halffter. The BBVA Foundation is a patron of the Madrid opera theater Teatro Real and maintains a longstanding and fruitful collaboration with the Bilbao Friends of the Opera Association ABAO. On the recording side, the Foundation publishes the Contemporary Composers of Spain and Latin American Collection in partnership with Verso and an international series in tandem with German label NEOS, as well as promoting one-off audio and video recordings of emblematic works and artists, among them two DVDs devoted to Maestro Joaquín Achúcarro, Carta Blanca, a selection of music by Cristobal Halffter, Ginastera’s Panambí and a homage to Tomás Luis de Victoria. The BBVA Foundation’s musical patronage also extends to the commissioning of new works, an annual grant scheme for members of the Spanish National Youth Orchestra (JONDE), which this year benefitted sixty-nine musicians, composition prizes in collaboration with the Auditorio Nacional de Música and the Spanish Association of Symphony Orchestras (AEOS), and the Frontiers of Knowledge and Culture Award in the contemporary music category.

5 For further information, contact the BBVA Foundation Department of Communication (+34 91 537 37 69; +34 91 374 54 10, [email protected]) or visit www.fbbva.es

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