The London Symphony Orchestra (A) HBS case 9-494-034, 2000
A good concert it was. Not one of their best, LSO players reported afterwards, but a creditable performance. It was one of 109 public concerts which, along with some 230 rehearsals and 180 recording sessions, made up that year's work at the London Symphoney Orchestra. ... The oldest of the four self-governing symphony orchestras in London (see Exhibit 1) the London Symphony Orchestra has a long-standing tradition of self-governance. The players who founded the orchestra were, at the turn of the century, members of the Queen's Hall Orchestra which was managed by Sir Henry Wood. The pay was not good, and players regularly sent substitutes (or deputies) to rehearsals and concerts whenever they could get higher-paid outside work. To elicit greater commitment from his players, Wood offered them a guaranteed wage in exchange for elimination of the deputy system. Forty-six orchestra members, objecting to what they viewed as a restriction on their freedom of choice, resigned and created a new, self-governing orchestra --the London Symphony Orchestra. ... In 1993 the competitive stakes were raised for the [four] London orchestras (as well as for the nine other professional symphony orchestras in England) when the British government, suffering its worst recession in years, devolved considerable authority for support of the arts to regional and local levels. It became unclear whether the national government would continue to be the principal benefactor of British orchestras --and, if not, where new support could be found and whether it would be sufficient to sustain all four of London's self-governing orchestras... Although the LSO regularly filled 85% of the seats for its Barbican Centre concerts, revenues from those concerts accounted for less than a third of the orchestra's annual budget. Of a total income fo GBP 7.7 million in 1992-1993, 63% came from ticke sales (including UK and overseas tours); 29% from government grants; 7% from corporate sponsorship; and less than 1% from its endowment. By comparison, a representative major symphony orchestra in the United States earned 51% of its income from ticket sales and received only 9% from governement grants; the remaining 40% was made up from the orchestra's trust and endowment income and from the contributions of individuals, corporations, and foundations. Like other British orchestra's, the London Symphony Orchestra was highly dependent on public subsidy for its survival. ... Compensation at the LSO, like that at the other self-governing orchestras in London had always been on a fee-for-service basis. A player's total compensation depended upon the amount of work the orchestra did and the amount of income generated by that work. In recent years, the LSO had establed a base level of compensation for its players to provide them with a modicum of financial security. Under the development plan, players were required to play in 85% of the orchestra's scheduled concerts and, in return, their base compensation was raised 15%.
The oldest of the four self-governing symphony orchestras in London (see Exhibit 1) the London Symphony Orchestra has a long-standing tradition of self-governance. The players who founded the orchestra were, at the turn of the century, members of the Queen's Hall Orchestra which was managed by Sir Henry Wood. The pay was not good, and players regularly sent substitutes (or deputies) to rehearsals and concerts whenever they could get higher-paid outside work. To elicit greater commitment from his players, Wood offered them a guaranteed wage in exchange for elimination of the deputy system. Forty-six orchestra members, objecting to what they viewed as a restriction on their freedom of choice, resigned and created a new, self-governing orchestra --the London Symphony Orchestra. ...
In 1993 the competitive stakes were raised for the [four] London orchestras (as well as for the nine other professional symphony orchestras in England) when the British government, suffering its worst recession in years, devolved considerable authority for support of the arts to regional and local levels. It became unclear whether the national government would continue to be the principal benefactor of British orchestras --and, if not, where new support could be found and whether it would be sufficient to sustain all four of London's self-governing orchestras...
Although the LSO regularly filled 85% of the seats for its Barbican Centre concerts, revenues from those concerts accounted for less than a third of the orchestra's annual budget. Of a total income fo GBP 7.7 million in 1992-1993, 63% came from ticke sales (including UK and overseas tours); 29% from government grants; 7% from corporate sponsorship; and less than 1% from its endowment. By comparison, a representative major symphony orchestra in the United States earned 51% of its income from ticket sales and received only 9% from governement grants; the remaining 40% was made up from the orchestra's trust and endowment income and from the contributions of individuals, corporations, and foundations. Like other British orchestra's, the London Symphony Orchestra was highly dependent on public subsidy for its survival. ...
Compensation at the LSO, like that at the other self-governing orchestras in London had always been on a fee-for-service basis. A player's total compensation depended upon the amount of work the orchestra did and the amount of income generated by that work. In recent years, the LSO had establed a base level of compensation for its players to provide them with a modicum of financial security. Under the development plan, players were required to play in 85% of the orchestra's scheduled concerts and, in return, their base compensation was raised 15%.
und so weiter with the widget per hour counts...
The London Symphony Orchestra (B)
One of the most important parts of the LSO's bid for Stabilisation Funding was the desire to conduct and in-depth investigation of its audience. A survey was distributed to 35,000 people who had attended an LSO performance within the previous year. The survey revealed that the primary constituency of the LSO audience was not the faithful, music-knowledgeable subscriber, but infrequent visitors who only attended, on average, one performance per year. These infrequent attendees, who comprised 86% of the audience, ...accounted for 28% of the tickets sold.
I surely welcome any updates to this information. Diversity is the key to economic and political evolution.
There's a rant from an indie musician floating around on the 'net, where he describes the BS he had to put up with from recording companies before he stopped bothering. YMMV on orchestra music, as presumably the orchestra has a better lawyer than your average Spice Girls wannabe. But 0 % does not sound far fetched.
- Jake If you only spend 20 minutes of the rest of your life on economics, go spend them here.
Conductors get most of the cash for both.
This feature explains how the system works.
The recording revenues might show up in "ticket sales" or in "corporate sponsorship." With the level of detail given, it's hard to tell.
Or they may use the recording to fund other parts of the business in a direct quid-pro-quo that for some reason (tax rules, if I had to wager a guess) bypasses the budget. It could be that the recording company pulls some strings with their contacts in advertisement, or something like that.
But I really don't know - you're right that the numbers given don't seem to make sense at face value.
