In today’s Wall Street Journal “Sightings” column I discuss the Metropolitan Opera’s current travails at the box office, and speculate on whether they’re soluble. Here’s an excerpt.
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The Metropolitan Opera, America’s biggest opera company, sold a lot of tickets last season—660,500, to be exact. But, then, it had no alternative, for it had a lot of tickets to sell. The Metropolitan Opera House is a 3,800-seat monster of an auditorium, vastly bigger than it needs to be. Bayreuth, by contrast, seats 1,925, La Scala 2,030 and the Vienna State Opera 2,200. To keep its doors open, the Met must fill those extra seats, and it’s no longer doing so. Two decades ago, the company earned 90% of its potential box-office revenue. That figure has been declining steadily in recent years and dropped to 66% last season, an all-time low that’s been the talk of the opera world ever since it was disclosed in May. As a result, Peter Gelb, the Met’s general manager, has been forced to hike ticket prices to an average of $158.50 per head. On Broadway, the average price is $103.86.
So what’s wrong at the Met? Mr. Gelb argued in 2014 that “the question is not whether I think I’m doing a good job or not in trying to keep the [Metropolitan Opera] alive. It’s whether I’m doing a good job or not in the face of a cultural and social rejection of opera as an art form.” He has a point: The National Endowment for the Arts reports that the percentage of U.S. adults who attend at least one operatic performance each year declined to 2.1% in 2012 from 3.2% in 2002. Yet many observers fiercely argue back that the real trouble with the Met is not the culture but Mr. Gelb himself….
You can wrangle on and on about what the Met should do to cut costs and sell more tickets, but you may be wasting your time and breath. For if you know anything at all about economics, you’ve probably already got a pretty good idea of what’s happening there. It sounds like a raging case of cost disease—one that could be fatal.
Cost disease is the term used by economists to describe the condition of a business in which wages go up without a corresponding increase in productivity, not because the workers are lazy but because the business itself is constituted in such a way as to preclude greater productivity….
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Read the whole thing here.