Douglas McLennan: May 2009 Archives

Power in numbers. There ought to be a simple formula to calculate it. Is it better to have a small devoted audience or a massive casual one?

It depends on the scale of what you're trying to do. TV has power because it has the ability to attract millions of viewers. The New York Review of Books has power because though its audience is small, it is influential.

The problem is when the scale of the audience doesn't  match the cost of production. The little magazine might be high quality but if it doesn't raise enough money from its small band of supporters, it can't survive. TV might have a huge audience, but if the audience slips (which it inevitably seems to) or advertisers cut back, even popular shows get canceled.

So one model is all about the size of audience. The other is about the financial commitment of a community to support something. The problem then, isn't just finding an audience, it's finding the scale and kind of audience you need to support you. The little magazine doesn't just need an audience, it needs an audience committed to paying to support it. The mass TV audience doesn't have to pay anything as long as there are enough people watching and advertisers willing to pay to reach them.

The formula for audience support changes over time. In the 1980s a symphony orchestra was considered healthy if it made half its budget at the box office. Now the standard is in the 30-something percent range. In the 90s, newspapers weren't considered healthy unless they earned profit margins in the 25%+ range.

So what's so magical about a 25% profit or earned revenue of 50%? Nothing really, except that they're formulas to measure relative success in a structure built to support a venture or industry.

Thanks to the internet, newspapers have bigger audiences than they've ever had, yet because the audience scale isn't right, the industry is in crisis. If online ad rates were close to print ad rates, the problem would be solved. Or, ad rates could stay the same and the online audience expand by a factor of ten and things might be fine. Or the business model could change and the ratio between size of audience and how the content is paid for could be back in balance.

The audience you deserve?
 
So what kind of audience does an arts organization need? The more often-asked question is: how do we sell more tickets? I submit that that's the wrong question. If an arts organization makes less than half of its income at the box office, then its challenge isn't just selling tickets, it's cultivating a more committed audience. If tickets were priced according to what it cost to produce that concert, they would be so expensive that we wouldn't sell enough tickets to support it. So our model is a subsidy model. But a subsidy model only works if there's an audience committed enough to subsidize.

The typical professional American orchestra performs in front of about 2.5 percent of the people in its area in a given season. This is the little magazine model, and it works as long as that small number of people are willing not just to show up at concerts, but give additional money to support it. In tough economic times, that small 2.5 percent audience has to be more committed than ever. And it must be the right kind of influential audience that can leverage corporate, foundation and government support. That's a lot of work for a small number of people when 97.5 percent of a potential audience has no exposure to the orchestra and therefore have no relationship with it.

A classic way of developing broader relationships is with exposure through the free sample. Get a shot on The Ed Sullivan Show and millions of people will see how great you are and buy your record. The problem pre-internet was that there were few spots available on Sullivan.

The internet changes the scale of the free sample. If Cory Doctorow or Seth Godin can give away millions of copies of their books, it means their ideas gain currency and some of those millions of readers will be interested enough to pay attention the next time Cory or Seth have something to say. That's worth a lot. If they hadn't given away their work, they'd just be a couple more guys expounding to their friends about the way the world works. Giving away work establishes their brand and creates a constituency for them.

So how do we build constituency in the arts?

• It used to be through arts education in schools. Play an instrument when you're young and you'll be an audience for life. But arts education isn't universal anymore, and despite best efforts of arts groups, traditional arts educational experiences seem to have less and less impact.
  
• The press used to review arts events, writing for a big general audience. But arts writing is slipping off the pages of our newspapers.

Add to this an explosion of competition for attention - iPods, online TV, millions of websites - and it gets harder and harder to hang on to an audience let alone build new ones. So some arts organizations see social media such as Twitter and Facebook and Flickr as opportunities to expand their base and create relationships with a wider audience. I recently consulted with an orchestra that cared only about collecting email addresses.The more addresses, they reckoned, the more chances they had to sell tickets.

But using social media as just an opportunity to sell tickets is a bad strategy, the electronic equivalent of junk mail. So the idea is to cultivate relationships with an audience that is increasingly online. Some of the most aggressive arts organizations have begun producing online content, figuring that, as the old mantra from the early days of the internet goes, content is king. But as some of the pioneers have discovered, content may be be king, but it can also be difficult to create and costly to do well.

Not only that, while producing original content might grow the number of people who encounter you, it doesn't necessarily get you the kind of audience you need (see my earlier point).

10 Things:

1. The kind of audience you build matters as much as the size of the audience does. 
2. Social networks show that community hierarchy is not only powerful, it drives loyalty.
3. An underrated aspect of social networking is that you're asking people to invest in a relationship. It costs them something - time, attention, their ideas, thoughts, feelings, even clicking their mice. You have to constantly reward them for participating or they'll go away.
4. Give away as much as you can and be as generous as you can to show your best to members of your community. Upgrade as often as possible; it's a powerful reward.
   
5. There's no such thing as free for an arts organization. If someone participates in your community, you should reward them. If they buy lots of tickets, give them a chance to get more tickets if you haven't sold them. If they're out talking you up and selling your product, give them upgrades, free downloads, special access, souvenirs. If the incentives are right, they'll work for you.
6. An empty seat is a wasted resource. Selling the ticket is great, but there should be many other ways people can "buy" their seats by participating in your community.
   
7. Drive-by clicks are seductive and traffic is always nice, but the drive-bys are fickle and low-yield and have no loyalty to you and yours. Don't spend a lot of time chasing them unless it's easy.
8. Outside of your primary artistic role, don't get into the content-producing business. Video is hard. Magazines are hard (and expensive) to produce and sustain. 
9. You say you listen to your audience? Prove it. Don't do fake interactive. People hate being managed. And increasingly they're wary of institutional voices. Mass TV is generic; arts organizations shouldn't be.
10. It takes work to build a community, much more work than to build an audience. But increasingly audiences are becoming communities because of the ability of social networking tools to link them. You can say you can't afford to invest in building a community, but unless you do, it will be increasingly difficult to draw a crowd.
    

I'm very happy to announce the latest ArtsJournal blog, Creative Destruction, by orchestra conductor John Dodson. I met John last summer while I was working on a story for Symphony magazine on new ways of running orchestras. John is music director of the tiny Adrian Symphony in Adrian, Michigan, pop. 21,703. In the past seven years he's remade the orchestra with executive director Susan Hoffman (now at the Cleveland Orchestra) with some pretty radical ideas.

The orchestra went from losing money and playing in empty halls to being the toast of the town and full houses. From that story [sadly not online]:

On average, the orchestra sells ninety percent of its available seats, and executive director Susan Hoffman says statistics show that over the course of a season an astonishing 31 percent of the town's residents come to at least one of the orchestra's programs (the industry average is 2.5 percent)...

They constructed an informal concert series around the wish-list of a single regular guy. They broke up their concerts into eight different genres and made sure that the look and feel for each genre were different. Every concert got something added on. Discovering, for example, that  there was no place to eat after chamber music concerts, they set up free food in the lobby and saw attendance go from 35 to 350. A pops series featuring Broadway show tunes includes opportunities to meet the performers.  This orchestra loves a good party and takes advantage of every opportunity to throw one.

As the venues filled up, concert-goers began calling for tickets earlier and earlier. The average age of the audience dropped by "about two decades." Business sponsorships increased 50 percent, the number of individuals giving money to the orchestra soared, and the budget jumped to $540,000. The orchestra started rewarding its most loyal followers with cards they could give to friends that offered them free tickets. Who better to sell your orchestra than those who are its biggest fans?

There's a lot that larger arts organizations could learn from the way Adrian does business. John's a thoughtful guy who thinks through his strategies in interesting ways. I'm thrilled to have him join ArtsJournal to share some of those ideas.

Over at the top of the Studio 360 website on their segment about the state of arts journalism, there's a quote by me that says that the best business model right now is to give away as much "stuff" as you can. Okay, a bit inelegantly expressed, in the course of a long audio interview for the show. You can hear the full segment here:

But the idea isn't new. And it's not mine. Cory Doctorow has long been a proponent of the business model of free, and he gives away his books. Why?

Giving away ebooks gives me artistic, moral and commercial satisfaction. The commercial question is the one that comes up most often: how can you give away ebooks and still make money?

For me -- for pretty much every writer -- the big problem isn't piracy, it's obscurity (thanks to Tim O'Reilly for this great aphorism). Of all the people who failed to buy this book today, the majority did so because they never heard of it, not because someone gave them a free copy. Mega-hit best-sellers in science fiction sell half a million copies -- in a world where 175,000 attend the San Diego Comic Con alone, you've got to figure that most of the people who "like science fiction" (and related geeky stuff like comics, games, Linux, and so on) just don't really buy books. I'm more interested in getting more of that wider audience into the tent than making sure that everyone who's in the tent bought a ticket to be there.

 Marketing guru Seth Godin has also figured this out with his books:

Seven years ago, I wrote a book called Unleashing the Ideavirus. It's about how ideas spread. In the book, I go on and on about how free ideas spread faster than expensive ones. That's why radio is so important in making music sell.

Anyway, I brought it to my publisher and said, "I'd like you to publish this, but I want to give it away on the net." They passed. They used to think I was crazy, but now they were sure of it. So I decided to just give it away. The first few days, the book was downloaded 3,000 times (note: forgive the layout. It's not what I would do if I was doing it today). The next day, the number went up. And then up. Soon it was 100,000 and then a million. The best part of all is that I intentionally made the file small enough to email. Even without counting the folks who emailed it hundreds of times to co-workers, it's easily on more than 2,000,000 computers. I didn't ask anything in return. No centralized email tool. Here it is. Share it.

A Google search finds more than 200,000 matches for the word 'ideavirus', which I made up. Some will ask, "how much money did you make?" And I think a better question is, "how much did it cost you?" How much did it cost you to write the most popular ebook ever and to reach those millions of people and to do a promotion that drove an expensive hardcover to #5 on Amazon and #4 in Japan and led to translation deals in dozens of countries and plenty of speaking gigs?

It cost nothing.

The software industry has largely moved to a free model. Open source software runs some of the biggest websites. The Apple Apps model now is to offer a free version of an app, hook a large user base for it, and build a market for a paid upgrade. Public radio is largely a free model. Hear the program for free, but if you use it and like it, please consider becoming a paid member. Millions do.

Who can afford to give away what they make? If you're Bruce Springsteen and sell every ticket, you don't need to. If you're Radiohead and you want to experiment, you give away your new album online, then hope real fans pay for the hard version.

The Internet exploded with Radiohead-related chatter. In the three days after the announcement, blogpulse.com, a search engine that reports on daily blog activity, showed more than a 1,300 percent increase in the number of posts mentioning the band...

A year after the release of "In Rainbows," the big numbers started to roll in. The album had sold 3 million copies, including downloads from radiohead.com, according to the band's publisher, Warner/Chappell. The sales from the band's website alone exceeded the total sales for the band's previous album, "Hail to the Thief." The figures included 100,000 limited-edition box sets, sold at the U.S. equivalent of $81 -- an $8 million haul, with the band keeping most of the profits. The publicity windfall helped ensure one of the most successful tours of 2008, with the band playing to 1.2 million fans.

The point is to build a base of people who care about you and what you're doing and then give them reasons to pay you.

Tomorrow: Politics of Free, Part II - why a larger audience with lower sales beats a small audience who pays a lot.

A movie studio exec once told me that if it were true that Hollywood was only interested in making money, the studios would have long ago ditched what they were doing and made porn. Huge money in porn, apparently. Who knew?

Much as it's easy to dismiss the moguls for chasing money, there is an aesthetic at work. And much as it's important to have an eye on the bottom line, to succeed over the long term, it's rarely good business to stay focused only there.

This is especially true on the internet, where publishers can track exactly what people are reading. When Salon.com first launched 15 years ago it had a terrific culture section. Music and book and art reviews, essays, an amazing literary travel section. Salon had lots of money early on and it built a sophisticated tracking system that could tell exactly what readers were reading.

When Salon got into financial difficulty, it increasingly (and unsurprisingly) focused on stories that got more traffic. Editors discovered that any headline that had a sexual reference got a spike in readers, even if the story wasn't about sex. Soon the headlines were a spicy bubbling brew of them. Eventually much of the culture coverage melted away.

It's easy to fall into the stats/data trap. Most new bloggers I've known get enslaved by their stat counters. They're reading me in Bangkok! In Peru! Pretty cool! It's quickly apparent which kinds of stories "sell" and which don't. As a publisher of blogs at ArtsJournal, it's easy to see what blogs get traffic and which don't. 

At some newspapers, if a story hits the home page and it doesn't immediately get clicks it gets pulled from prominence, sometimes in as little as 10 minutes. At some newspapers, the ability to track readers through a site ends up driving the news product. So you have sections full of reader-submitted pet pictures and navigation architecture that values traffic over important stories.

Most arts organizations learned long ago that following the crowd doesn't necessarily lead to sustained success. Surveying the audience you have gets answers from the audience you have, not those you'd like to have. Program only for the audience you have and you set up a feedback loop of diminishing returns, attrition ensuring erosion.

In the old production model, artists created and audiences consumed; newspapers reported and readers read. Interaction 1.0 was a conversation up/down in which the audience talked back to the artist or newspaper. Interaction 2.0 is the artist or news organization attracting an audience around content and making it possible for that audience not just to talk back to the artist but to interact with one another. Everyone's there - initially at least - because of the content, but they're loyal because of the community.

Which makes it even more important to be clear what kind of community you're trying to build. Most newspaper comment sections are crap because editors don't take care in curating them or developing the community who comments. They let traffic drive content rather than content drive traffic, and as a result they don't have audience they wish they had. Arts organizations fall into the same trap if they plunge into social networking without being clear what kind of community they're trying to build. The goal can't just be numbers. Otherwise, just make porn.

In the Weekly Standard, John Podhoretz has noted the carnage of movie critics at newspapers. He isn't weeping.

Movie criticism has been a feature of American newspapers for a century, and sadly, one can count the standout critics throughout that time on maybe two hands. Many of these jobs were filled by reporters or editors who didn't get another plum assignment and were thrown a bone by a gruff but kindly managing editor. Nothing much good was going to come of that.

This deprofessionalization is probably the best thing that could have happened to the field. Film criticism requires nothing but an interesting sensibility. The more self-consciously educated one is in the field--by which I mean the more obscure the storehouse of cinematic knowledge a critic has--the less likely it is that one will have anything interesting to say to an ordinary person who isn't all that interested in the condition of Finnish cinema.

Gee John, I suppose one could say something similar about political pundits. This kind of denigration of expertise and celebration of the wisdom of the "common" man is a familiar trope in some political circles.

Podhoretz clings to an old and unsophisticated definition of expertize. In this view, experts are supposed to be infallible by definition. Since no one is infallible, experts are to be inherently distrusted. In this view, experts are "them" and there is more natural wisdom in the "us" who don't declare ourselves expert. This is the view that declares that being able to have a beer with the President is a more important qualification for the job than experience and skill.

First Podhoretz denigrates the role of newspaper movie critic by setting up a premise meant to ridicule: "Many of these jobs were filled by reporters or editors who didn't get another plum assignment and were thrown a bone by a gruff but kindly managing editor. Nothing much good was going to come of that."

Translation: newspaper movie critics became movie critics not because they knew anything, but because they couldn't hack it in "real" journalism. For Podhoretz, the movie critic job was a consolation prize for fuck-ups. Nothing much good was going to come of that, indeed.

So where is the bar set for "good" critics, if indeed there were only a few in the history of newspapers? I could say that there were only three great baseball players in the 20th Century and I'd be right by my own standard, but it doesn't mean anything. Podhoretz, having dismissed the value of professional critics, generously allows that yes, there were a few worthies, just  in case someone brings up the likes of Roger Ebert. But no, in the broader Podhoretz view, the disqualifier comes when one decides to study something and make a job of it. And guess what? He shows us that newspaper readers agree with him!

There is a story told about a major American newspaper that was among the first to do a huge readership survey in the early 1980s. The survey cost several million dollars. And in those days, the editors expected to learn that their lead political columnist was the most popular in the paper, that people really followed the sports columnists, and that the area rose and fell with the opinions on the editorial page.

To their absolute horror, what the editors discovered was this: No more than 5 percent of the readers looked at the editorials. The lead political columnist was one of the least-read. And the most popular item was "Walter Scott's Personality Parade," a column of questions and answers about celebrities which appeared not in the newspaper itself but in Parade, the independently published Sunday supplement.

And nobody, but nobody, knew the names of the critics. This was at a time when the paper in question had two movie critics, two theater critics, two television critics, two book critics, a dance critic, a rock critic, a classical music critic, and an architecture critic. It took the paper nearly three decades to get around to it, but the lead critics in all but one of these fields have taken buyouts and are not being replaced.

So there. Nobody knew the critics, so they should go. Except that that's stupid. Without knowing the questions and methodology, it's impossible to argue the specific points, but readership surveys notoriously have failed to measure what people really value in their newspaper. They might not know the byline, but they read the work. They might not specifically buy the paper for city hall coverage, but they notice it when it's there (and when it's not). 

The larger issue is this. It's all well and good to ask an audience what it wants. It's important to understand the market. But no publication ever became great by following rather than leading. There is an important place for the wisdom of crowds. But there's also a significant role for those who become experts. You'd think that Podhoretz, with his limited, elitist and subsidized audience at the Weekly Standard and Commentary would understand this as much as anyone.

A few years ago I was hired to consult on a national radio show to develop a plan for covering the arts. I suggested that trying to cover culture in a scattershot way (one from column A, two from column B...) was an archaic approach that ought to be abandoned.

Sports isn't covered like that. Politics isn't. Events don't happen in isolation. They're part of an arc of context. Why is it news that player X has a sore shoulder? Unless the team he's on is making a run for the playoffs, it probably isn't. Do we care if John Edwards has an affair? Yes if he's running for president. Should we be worrying if a bank in which we don't have any money has a meltdown? Yes, if we're trying to figure out whether the economy is going into recession.

The point is that the way we typically cover news is to attach events to longer narratives or issues. Not, for the most part, culture. Most newspapers have taken an institutional approach to covering the arts; that is, they identify the important museums, orchestra, theatres, and artists and write about what they're doing.

It makes for a narrow definition of culture. An institution isn't a story arc. The story isn't the Yankees or any single game, it's who's going to win the series this year. Individual games are the incremental telling of that story. Culture is about ideas and culture doesn't happen in isolation. The story is how artists are getting their ideas and how they're responding, what they're creating and why. Covering institutions is only part of the story.

So what are the big animating ideas in our culture right now? I proposed that one way to make cultural coverage more coherent and interesting would be to try to identify those big ideas and make a list. Big ideas: beauty? shock? technology? bio-art? copyright? collaboration? In music it might be the ways genres are breaking down and collaboration is changing. In visual art maybe it's museum deaccessioning. Etc.

Track the ideas that seem most compelling and figure out how stories relate to them. Take them out of the artform ghettos and attach them to the broader culture. That doesn't mean artificially jamming issues on to stories that don't fit. But looking for themes and weaving the strands together would give stories better context.

In practice, this is what good editors, critics and reporters already do. It's called news judgment. But in most newsrooms arts coverage isn't coordinated in this way. If it were, we would tell stories differently. Take copyright. The who-owns-what issue is one of the most important issues in art right now. But pitch a story on copyright, or worse, a series, and watch the eyes glaze over. If the copyright story does get done, it has to do a lot of heavy lifting to explain the issues.

If instead copyright was one of those issues the newsroom was tracking right now, it would be easy to incrementally report it across many stories, and the reader would have a better understanding of the issue.

In the end, the news organization I pitched this idea to didn't go for it. Producers were more focused on the practical job of getting stories out, and the smorgasbord approach seemed easier. Ultimately it wasn't, and the coverage never found its voice.

A few years later, I wonder if maybe blogs haven't evolved into this kind of reporting. Journalistic blogs are a kind of incremental reporting. The best of them cover ideas over many posts. Twitter incrementalizes reporting even more. It doesn't mean there isn't still room for the 3000-word essay. I'd argue what we're seeing is an expansion of journalism, and that the incrementalization of reporting makes the compelling long-form journalism more valuable, not less.

Several new large-format e-readers are about to go on sale. Newspaper execs are excited:

These devices from Amazon and other manufacturers offer an almost irresistible proposition to newspaper and magazine industries. They would allow publishers to save millions on the cost of printing and distributing their publications, at precisely a time when their businesses are under historic levels of pressure...

Perhaps most appealing about this new class of reading gadgets is the opportunity they offer publishers to rethink their strategy in a rapidly evolving digital world. The move by newspapers and magazines to make their material freely available on the Web is now viewed by many as a critical blunder that encouraged readers to stop paying for the print versions. And publishers have found that they were not prepared to deal with the recent rapid decline of print advertising revenue.

Publishers could possibly use these new mobile reading devices to hit the reset button and return in some form to their original business model: selling subscriptions, and supporting their articles with ads.

Maybe. The most popular e-reader right now is the iPhone, and it works pretty well. But will readers pay $9.99 a month for the New York Times? Doubtful, but we'll see. The mobile readers have some challenges:

The screens, which are currently in the Kindle and Sony Reader, display no color or video and update images at a slower rate than traditional computer screens.

They also update only once  a day. And expecting readers to pay for each publication seems naive. "Another hitch is that some makers of reading devices, like Amazon, want to set their own subscription prices for publications and control the relationship with the subscriber -- something media companies like Condé Nast object to."

In short, by most measures the portables offer less than readers can get for free on the internet. The one advantage is portability; we'll see if that's enough of a lure.

Not literally, of course, at least not yet. The ability to edit and fix recordings has long conditioned audiences to expect that the music we hear should be perfect. Has it changed the way performers play in live concert?

The role of recordings in the music business has changed. Once, recordings were primarily a product, a way to make money. But classical music recordings haven't made significant profits in years and most large recording companies have dropped their classical labels. Increasingly, recordings are a marketing tool.

In the pop industry, the ability to share and freely distribute recordings has helped develop careers and propel unknown bands to stardom. So if big labels aren't recording much classical music anymore, perhaps live recordings could help classical musicians?

Take away the not-insignificant issues of union recording contracts, and among musicians there's still resistance to the idea of routinely recording and releasing live recordings. Why? Because performers have been conditioned to believe that when they're being recorded, the performance needs to be perfect. What if you miss that high "a" and you can't fix it in the mixing booth? Many performers have come to believe that they have to play with a different level of caution if they are being recorded live. They won't take as many chances in a live recorded performance.

So a missed marketing opportunity. Okay.

Even without live recording, perhaps the culture of perfect edited recordings has had a negative impact on concerts. From an audience perspective, listeners used to technically-perfect recordings come to performances with an expectation of every note in place. Performers who understand that the bar is set at technical perfection work with that goal in mind. Perhaps artificially-achieved perfection has become a baseline that has led to a homogenization of musical approach.

Maybe that's okay (though a fixation on technical control can erect a wall between performer and audience).

But something else: most people these days encounter artists primarily through speakers or screens. I wonder if audiences aren't getting tired of polished perfection because it's become so corporate and commonplace with widely available cheap professional tools. Perfection is now an aesthetic choice rather than a rarity.

This is an anecdotal observation, but it seems like the vast majority of hit performances on video and audio share services have a significant live raw quality to them.  The video quality can be rough; the audio can be second-rate. But the performance has to have a visceral element of risk. Performances under glass are less attractive in the way that corporate blogs and corporate video are. Not that we're celebrating wrong notes; but maybe the essential element of a performance ought to be performance, not perfection.