$200k pay deal at the NY Phil will impact ticket prices, but that’s no bad thing
OrchestrasLetter from Professor Ira Sohn in this weekend’s Financial Times:
Regarding Tim Harford’s disquisition on the “Baumol effect” and his observation that “it still takes four musicians between 25 and 30 minutes” to play a Haydn string quartet, a few additional comments are in order (Magazine, Life & Arts, September 28).
First, Professors Baumol and Bowen (and your columnist) were correct to argue that as living standards increase those wishing to attend live performances will face higher ticket prices, absent government subsidy. The recently announced agreement increasing the base pay of the New York Philharmonic musicians to above $200,000 a year will certainly result in higher ticket prices in future.
But given the impressive technological changes we have experienced in recording and diffusion of music over the last half-century, most music lovers have no need to attend live performances. They can enjoy concerts on their Sony 85-inch 4K UltraHD TVs through paid subscriptions or “pay-per-view”. Judging by recent Taylor Swift concerts, live music is becoming the 21st century’s version of “Veblen goods”, a luxury product for which demand increases as the price rises.
Second, regarding productivity gains more generally in the vast public-service sectors of rich-country economies, as Harford argues, the Baumol effect, sometimes called “Baumol’s cost disease”, is not — or should not — be operating.
Larger class sizes (either on site or through Zoom-like technologies) at universities, or devolving doctors’ lesser tasks to pharmacists, medical technicians and physician assistants, along with many DIY procedures administered at home, are examples of productivity improvements in the education and healthcare sectors.
If costs continue to increase for these services we should be looking elsewhere for the reasons, such as anti-competitive forces and political considerations. For example, there does not seem to be any justification to have armies of low-skilled labour manually collecting trash or fallen leaves from public spaces in New York City when one person equipped with the right machine can deliver the same result at a fraction of the cost.
Ira Sohn
Emeritus Professor of Economics and Finance, Montclair State University, Upper Montclair, NJ, US
The sanitation workers’ union might take issue with Professor Sohn’s characterization of their membership as low-skilled laborers and invite him to try it sometime.
It may be hard work, but it is not high skill. I can’t do it, but don’t confuse the two.
I person can collect all of the trash in New York City?
This guy is under the impression that larger class sizes equal productivity improvement? Only if improvement measures body count per square foot. How does it measure out in the amount of marking teachers have to do, to say nothing — and this guy is clearly thinking nothing — of the student experience, including one-on-one consultations with their teachers and professors?
And is he arguing that most people have Sony 85-inch 4K UltraHD TVs? And encouraging the luxury goods approach to concert attendance? Is he determined that classical music shall price itself out of the market and become so elite that more and more people will simply shrug and say “not for the likes of me”?
Is he aware that there is a cost-of-living crisis throughout the western world, with the possible exception of the New York Philharmonic? Does he think the majority of New Yorkers make over $200,000 a year?
What a load of tosh. When he says “most music lovers have no need to attend live performances” it is clear indication that he has no concept of what a live theatrical experience of any sort entails. Yes, the advances of technology are a blessed thing. It is great to be able to see performances (me on my laptop, others on their vari-sized screens), or to listen to recordings of music we have loved or never before encountered, but live experience is unique and — in this increasingly screen-ridden age — urgently required if we are to retain any vestiges of humanity.
$200,000 does not go a long way in NY. Maybe world class orchestras should migrate to lower cost areas.
That was their argument for the raise. I do not quarrel with that. I simply wonder what mere mortals, who work in shops and the subway and as messengers and secretaries and waiters and streetcleaners, do. They are not less worthy people simply because they do not play the violin, but if they like music they are expected, as well as managing to survive in New York, to pay premier prices to attend the orchestras…
Prices already went up materially this season.
Sure you can listen and watch at home if you don’t care for Hi-Fi sound quality of a live performance. For myself I prefer hearing musicians in the flesh.
Yes, but perhaps others are not as evolved as you…or have the disposable income to subsidize live concert performances.
That’s not an excuse anymore. Many orchestras and opera companies today have cheap tickets available. Seattle Opera, for example, has a “pay as you wish” date for each of their shows. And SanFran and Santa Fe Opera have $10 standing room.
Boy, that flew way over your head….
I have to presume the professor’s commentary was ironic trolling.
“equipped with the right machine can deliver the same result at a fraction of the cost”
Is the professor trolling musicians in the guise of supporting them?
This is literally what is happening on Broadway, certainly in studios and recordings, where music making machines, in one form or another, have been replacing humans since the last century.
(I remember the first time (in the 1980s) it hit home, when I saw the Bolshoi Ballet touring the US with a recording, instead of a live orchestra.)
I recall a performance given by the wonderful Russian emigre ballerina Natalia Makarova in Hong Kong around 1980. Here again the orchestral sound had been recorded. Worse, it had been recorded previously at a live performance in another country. Even worse, it included the applause from that performance!
Some big “productivity gains” in music are:
a) faster travel enabling musicians to undertake more gigs in a geographically dispersed manner in a shorter space of time (compare a touring itinerary nowadays to, for instance, the LSO’s first trip to the USA in 1912, which entailed a sea voyage and a chartered train, or Mozart’s various tours of Europe, which entailed long journeys by carriage);
b) computer software for music notation enabling scores and parts to be assembled and, crucially, modified far quicker than handwritten or manually engraved materials (although there is also a proliferation of very sloppy music typesetting); and
c) rising standards in sight-reading skills among professional musicians enabling ensembles and orchestras to reduce the amount of rehearsal time.
Let’s not forget: the survival of orchestras and the organizations that support them does not hinge on ticket or merchandise sales. These institutions rely heavily on the donations and endowments of wealthy benefactors, as well as public grants for the arts—often funded through taxes, like those on cigarettes or alcohol. In reality, they are not “in demand” in the way mainstream entertainment figures, such as Taylor Swift, are.
While the orchestral world holds immense artistic value, it occupies a niche that many in the general public don’t engage with regularly. Ironically, the very individuals and organizations that ensure these institutions thrive are often those whom the artists and staff might prefer to distance themselves from, philosophically or socially.
There is no doubt their talent is unparalleled, and the level of skill and dedication involved is staggering. However, the reality is that many musicians within this ecosystem might struggle to find comparable success or stability outside the protective environment of nonprofit organizations, union protections, and philanthropic funding streams. It’s a fascinating paradox—an art form sustained by structures that some of its members might feel ideologically at odds with.
For every economist there are a hundred people to misunderstand them.
The article above did not propose many of the doomsday scenarios commentators here are writing of, he merely made the case that there are some productivity gains in classical music and that the nature demand and costs are changing.
The example he gave concerning access to concerts on media created by technological advancement affecting the nature of demand and pricing is absolutely valid.
By Ira Stone’s logic, pre-recorded lectures and AI could deliver the same results at Montclair University as he does in his position as Emeritus Professor of Economics and Finance — and they would do so at a fraction of the cost…
Does Professor Stone really want to see society take this direction?
Double standards abound throughout the Western world. And most probably elsewhere.
Professor Ira Sohn simply doesn’t know what they are talking about.
Music recordings are a source of little profit, including in the pop music sector.
Taylor Swift may make a lot of money from recordings, notably the movie version of The Eras Tour, but she and other mega popular singers like Beyonce get the bulk of their income from stadium concerts where they can literally sell tens of thousands of tickets a night.
Further, every pop artist will tell you that live performance drive record sales and streaming listens. If they stop performer live, those other sources of revenue drop.
Returning to orchestras, what has become their big money maker are playing sound tracks to movies at outdoor summer venues that hold about 5k people. I mention this because it’s the live element that makes it so popular — anyone can watch the movie at home.
Finally the comment about New York City sanitation workers is insane. While it may not be high-skilled labor, it’s not something that can be easily done by machine and automation because there are so many unpredictable variables, like illegally parked cars. And the jobs pay well because collecting trash in the very early morning hours isn’t exactly a desirable job — most people rather work for less at a fast food restaurant.
tickets are already so expensive already this season vs last
With the revamped Geffen Hall now having around 500 less seats than before, no matter how much better the acoustics, it’s inevitable that average ticket prices have to rise.
Speaking of the NY Phil, I wonder why SD.com didn’t bother to include a post about the recent article in the NY Times regarding the orchestra’s home?
https://www.nytimes.com/2024/10/08/arts/music/geffen-hall-acoustics.html
I emailed Norman with that link the day it came out.
I wonder why he ignored that article? To me it is a more tangible facet of what I assume this vlog is all about. It seems more substantial than a posting about some obscure or esoteric person, or a more tangential aspect that fits “The Classical Music News Site.”
He may not have linked it as it is behind a paywall and is therefore unavailable to the majority of SD readers, who are not NYT subscribers. Fee free to cut and paste it if you feel it is important to this conversation.
This emphasis on productivity reminds me of a well-known article in, I believe, The Economist magazine some decades ago re how orchestras could reap the gains of technological advance. I can only recall some its its amusing suggestions now. One was that it was ridiculous to have 16 first violins all playing the same music. Far better to reduce them to 2 and use amplification. Another was that composers wrote far too much repetition and should be encouraged to cut out many of the notes. This was as silly then (and meant to be) as the contents of the above letter in the FT.
Wasn’t that the complaint seen in ‘Amadeus’? (….”too many notes…”) LOL!
I have an issue with both US Symphony Boards and local 802. Both are unrealistic when it comes to ticket prices and musicians pay. The major orchestras have huge endowments. For instance, as of 2022, Boston was sitting on $456 million, Chicago $393 million, San Francisco $364 million, Los Angeles $344 million, Cincinnati $281 million and New York $241 million. The New York Philharmonic was given an additional $40 million by the Tang family in 2023. In ticket revenue as of 2021, the top 8 orchestras took in per year, Los Angeles Philharmonic: $187M, Philadelphia Orchestra: $99M, Boston Symphony Orchestra: $96M, San Francisco Symphony Orchestra: $94M, New York Philharmonic: $86M, Chicago Symphony Orchestra: $82M, Cleveland Orchestra: $62M
Cincinnati Symphony Orchestra: $43M, the number also includes recording royalties and touring sales. As all of these orchestras are 5013c’s, it would be interesting to see what the front office costs are related to the annual orchestral costs. Also, it would seem based upon orchestral revenue, the cost of concertmasters in 2021 is off, as for instance the cost of the New York Philharmonic concertmaster was $623k, while the LA Philharmonic, the top revenue earner was 4th at $564k. https://adaptistration.com/2021/06/17/2021-orchestra-compensation-reports-concertmasters/
All of these orchestras make considerable money and have huge endowments. Unlike an opera company, the sole function and purpose of the orchestra is to make music and break even on the earnings vs. expenses as they are all not for profit institutions.
Local 802 are not stupid. They know the amount of the endowments, that’s public information, as is the revenue. They therefore push way beyond where they should. Rather than keeping the house full with butts in seats, with new raised pricing for their negotiated salary settlements, the public is going to pay. We learned during covid that these boards were loathe to break into their endowments to pay the musicians, most were either paying portions of salaries with revenues and or laying off their orchestra during that period. The orchestra boards never discuss the fact that their musicians staff various conservatories and higher education institutes as full, assistant, associate, or adjunct professors including, the New York Philharmonic with Juilliard, Mannes, New York Conservatories as well as NYU, Columbia, The New School etc. etc. some who are on multiple faculties. An orchestral musicians job, like teachers is a seasonal job, with in most cases at least 2 months off in the Summer, except occasional gigs, allowing them to perform in Festival orchestras and teach different students as well where they earn additional money.
It would be interesting for someone to do a study of the total take home pay of orchestral musicians in the major orchestras United States. When you factor in their orchestral salary, school year teaching salary(ies), royalties as major U.S. orchestra generally do not agree to buy-out musician contracts in recordings or televised pay per view, Summer orchestral gigs, chamber gigs, solo gigs and summer teaching gigs, I bet you will find that these musicians happen to work hard, but make really impressive salaries.
If my points are fair, the people who end up suffering are the ticket buying public. These top orchestra musicians are not suffering.
Amen!