Symphony Orchestras and Market Segmentation

*This is an older entry that I wrote while I was still working on the thesis (still feels weird talking about thesis in past tense). The subject didn't really pertain to my thesis topic, but I felt it was important enough to warrant discussion.

---

In the past few weeks, I've spoken with several symphony orchestra CFOs and Vice Presidents about their strategies on hiring guest soloists - musicians who symphonies contract to perform virtuosic works like concertos or arias on a per-concert basis. As it turns out, many orchestras base these policies on a commonly-referenced statistic: classical music audiences are driven by composition, not performance. What this means is that people who attend symphony concerts go primarily because they want to hear a particular piece rather than a particular soloist.

Audiences of pop music, on the other hand, are different. They attend concerts based on who the performer is; the work performed is secondary.

How does this factoid drive policy? Basically, symphonies will skimp on spending for the best soloists and instead pick up "emerging talents" to perform more popular works. In fact, this policy has some advantages. First of all, it's cost-cutting: many symphonies are already running budget deficits, and spending on more expensive soloists may not be the most sensible decision in the short-run. The strategy also allows symphonies to “incubate” young performers; a constant influx of new performers may raise standards and challenge the status quo.

My doubts lie with the actual meaning of the statistic. When these surveys were conducted, only those who currently attended classical concerts were polled. So the only definitive conclusion is that current classical audiences are driven by composition. The studies ignore potential classical audiences and assume that all music audiences are the same. Why adopt this static viewpoint?

In fact, current classical audiences belong to different market segments than pops audiences. The average age of a symphony audience, for one, is much higher. Occupation, income, and race are also vastly different. It is not safe to say, therefore, that classical audiences who are not currently attending many symphony performances are composition-driven. If there are performer-driven classical audiences, then they might only show up to symphony concerts with esteemed soloists. Through my experience, I’ve met both kinds of classical audiences, composition and performance aficionados alike. My best guess is that younger audiences tend to be more performance-driven than older ones – this hypothesis would in fact explain the results of the aforementioned studies.

From an academic standpoint, further research needs to be conducted. Ideally, we would want to know the general characteristics and tastes of everybody who would be interested in attending a symphony concert. Managers should be interested in knowing the market segments of both current audiences and potential audiences – this knowledge would help them conduct targeted marketing. When they only study their existing audiences, many symphony orchestras are ignoring the big picture and catering to only a fraction of their potential patrons.

It is crucial to understand the preferences of both existing and new audiences. The classics face deficits not only due to rising costs of living but also to decreased revenue growth. This knowledge could expand symphonies’ audience bases and increase not only ticket revenue but patronage as well, currently orchestras’ largest source of income.

I’m not necessarily recommending for symphonies to spend more for good soloists. The strategy might only work on a case-by-case basis. However, symphonies could take a longer-term approach by exploring new market segments rather than limiting its research to existing segments. The latter approach might alienate an entire generation of classical patrons and hurt orchestras’ long term sustainability.