From the Executive Director
The Message in the Numbers
By Teresa Eyring
The TCG Fiscal Survey, now in its 32nd year, is widely regarded as a trusted annual barometer of the theatre field’s general health. Funders, reporters and consultants use the public portions of the survey—published as Theatre Facts and available for download as a PDF—as a way to analyze trends and needs in our industry. All TCG member theatres are invited to complete the survey, and participants are able to access the raw data to generate a wide variety of reports and compare their own annual financial profiles with those of other theatres.
It’s fascinating to see that theatres across the nation, sometimes geographically remote from one another, have remarkably similar financial structures and resource allocation schemes. The financial benchmarking process, enabled by the survey, can help organizations understand if they are operating below average or better than average, or if they are “missing the boat” on important opportunities. Observing major variances—such as theatres receiving large sums of local funding, or impressive non-ticket-related earned income streams—can inspire theatre staffs to develop new strategies for their own institutions. A strong value placed on peer-to-peer learning within TCG, coupled with generosity among the field’s leaders, create the conditions for theatres to actively share with one another how they’ve achieved certain exceptional results.
The survey also helps extract the truth from the anecdote. To wit: Audience attrition is often a conversation topic among practitioners. Audiences are up, audiences are down. Subscription is in, subscription is out. Theatre Facts showed a 4.4-percent increase in mainstage attendance over the previous year. The net reduction over the past five years was 2.1 percent. While any loss of audience is troubling, these results can practically be considered a win, during a period that has been fraught with uncertainty, along with new leisure-time developments nearly as cataclysmic as the advent of television.
A five-year trend that substantiates the anecdotal evidence is related to subscription. We’ve been hearing that subscriptions have been in decline, possibly even headed for extinction in some institutions. Subscription has been the foundation for audience-building in many institutional theatres for 30-plus years. Its considerable advantages relate to the generation of up-front income and a reliable audience base, which can be valuable when theatres are exploring new or adventurous work—especially if the subscriber base appreciates the programming mix offered by the theatre. The troubles with subscription include that subscribers often forgo attending one or more shows, leaving empty seats that can’t be resold. Lifestyle changes and pressures on time have created a situation in which committing to multiple performance dates is less common. Some theatres are tackling the uncertainty about subscription’s future head-on. Chicago’s Steppenwolf Theatre Company, with Wallace Foundation funding, has launched a three-year study to rethink and recast its audience-development model, toward a future in which subscription may no longer be its primary customer relationship. If successful, these new approaches can be replicated by others nationwide.
Another trend that matches an oft-suspected reality centers on liquidity. While more theatres ended the year in the black than in the previous five years, the numbers show a continued decline in working capital. This suggests either that theatres are carrying accumulated deficits and working capital is in use to facilitate cash flow, or that surpluses include both unrestricted appreciation on investments and assets released from restriction to pay for facilities—neither of which equate to ready cash. The upticks are positive but, in reality, a weak working capital profile presents troubling limitations on an organization’s ability to take risks, experiment with new solutions and advance its overall mission. (Not to mention that it’s the leading cause of sleepless nights for managers in theatres of all sizes.)
The knowledge that the theatre field is undercapitalized has been with us for years. While some say that theatres should build cash reserves by achieving and setting aside annual surpluses, this strategy alone would be difficult to rely upon and could take years to accomplish for many theatres. Organizations can individually address working capital needs through fundraising and new income strategies. And the field would also benefit from a wide pool of funders focused on providing both unrestricted funding and funding that goes directly to augment reserves.
Theatre practitioners are fighters and, for the most part, are responding to external challenges by becoming ever more proactive in the effort to engage audiences and identify new sources of income. If this activity leads to burnout and continued audience attrition across the field, then yes, “ Houston, we have a problem.” On the other hand, if we succeed in creating replicable and sustainable models and a new sense of engagement among audiences, then this work stands as an investment in adapting the field to a changing environment.
In the coming months, American Theatre will launch a new column that profiles some of the strategies theatres are implementing to address fiscal, audience, artistic and other challenges or opportunities. We hope to use this column as a touch point for field-wide discussion. Please let us know if you’d like to contribute!