Paul Krugman takes a look at top earnings amongst musicians, and the 'superstar' effect - the idea that the vast share of consumer spending on music will go to a very small number of performers, since they can reach very large audiences through recordings and broadcasts (see my previous post here). He writes: What makes this an interesting story for music is that what technology gave, it is now taking away: digital, streamed music is hard to monetize, so that artists are forced back on live performance. So you might expect to see some … [Read more...]

Mixed Blood Theatre of Minneapolis has an interesting pricing model, which they call 'radical hospitality': Radical Hospitality erases economic barriers in pursuit of building a truly inclusive, global audience. Whether a patron is a long-time Mixed Blood attendee, a new immigrant living in Mixed Blood’s Cedar-Riverside neighborhood, a person with low income or disabilities, a college student, or someone who has never been to theater, he or she will be welcomed, free of charge—with radical hospitality. How does it work? There are two ways to … [Read more...]

Borderlands Books, of San Francisco, will be closing its doors. Brick-and-mortar bookstores face a tough market situation, and those that are paying San Francisco-level rents even more so. But according to the owners, the straw that broke this camel's back was the mandated increase in the minimum wage. From Borderlands blog: In November, San Francisco voters overwhelmingly passed a measure that will increase the minimum wage within the city to $15 per hour by 2018.  Although all of us at Borderlands support the concept of a living wage in … [Read more...]

Blog neighbour Lee Rosenbaum writes today about increases in premiums Sotheby's auction house, speculating that Christie's will soon follow suit. She writes: Here are Sotheby’s new charges (with old ones in parentheses), effective Feb. 1: Buyers will be charged 25% of first $200,000 (previously $100,000) of the hammer price; 20% of amount above $200,000 to $3 million (previously above $100,000 to $2 million); 12% of excess over $3 million (previously $2 million). Let’s look at a specific example of how this will work: If your winning bid … [Read more...]

An interesting piece in The Guardian today on the design and pricing of seating in theatres, that the efforts to make all seats 'good' seats has made it more difficult for those on a budget to attend performances. Iain Mackintosh writes: We need to unravel the connection between seat prices and auditorium design. In the first theatre building boom, at the end of the 18th century, hundreds of playhouses were built with a top-to-bottom price ratio of eight to one. In the second, at the end of the 19th century, many more were built, including the … [Read more...]

New research on arts participation and economics has been released by the National Endowment for the Arts. I won't try to summarize everything there, just a few comments: Two of the reports are on participation: one asks about who participates in what, the other asks people about why they participated. The data will be interesting for researchers willing to dig: what relationships are buried in those survey numbers beyond what is on the surface? I see each of these reports as a spark to future studies. For example, although the … [Read more...]

I don't disagree with the assessment by Alec MacGillis at Slate that that rust-belt cities offer fine high culture opportunities at low prices: riches from the turn of the last century provided capital (physical, human, institutional) that created great organizations, that can, at least for the time being, survive on endowment funds and relatively low amounts of 'earned income'. But my reaction is somewhat similar to the one I had reading Christopher Knight's recent piece arguing that museums ought to be 'free' - i.e. that the heavy costs of … [Read more...]

Suppose the costs of putting on a show fall - this could be from falling rental rates for performance spaces, technological changes that reduce costs of lighting or sound, or falling labor costs (perhaps through policy changes that lower the cost of providing health insurance to employees). How will this affect ticket prices? In the short run, not at all. In the long run, ticket prices will fall. Let me define 'short run' as the time period over which the production schedule for the company is set: the performance dates for the rest of the … [Read more...]

Two articles this week on price discrimination by airlines, both written in the context of how crummy the low-priced options are. Slate's Alison Griswold writes: In a paper published last summer on strategic consumer behavior, a pair of researchers found that advance, online purchases of discounted airline tickets were disproportionately made on higher-cost carriers. The finding, they wrote, “suggests that fares at the lowest percentiles are often sufficiently low regardless of the presence of strategic consumers, and that increased … [Read more...]

Diversity - in audiences, employees, and boards of trustees - matters to arts administrators, and to researchers who study organizations and societies. But how do we measure diversity? The diversity index is constructed like this: suppose everybody comes from one of four different population groups: Blue, Green, Purple and Red. Let the fraction of the population that is Blue be given by B, the fraction that is Green be given by G, and so on, where B, G, P and R are all numbers between zero (if nobody comes from that group) and one (if … [Read more...]