“Netflix” by flickr user Jenny Cestnik.

This month, Netflix moved one step closer to media domination, launching its streaming service in 130 countries, bringing the total number of countries-where-one-can-watch-Netflix to 190, including India and Russia. (Notably missing: Indonesia, which banned the service because of its “unfiltered content.”) With some 70 million users and dozens of award-winning original series, the streaming giant is causing some in Hollywood to freak out. (Cable, meanwhile, is already in full-fledged panic mode with cord-cutting numbers rising dramatically.) But Netflix is only part of the story: Amazon, which closed 2015 with more US subscribers than Netflix, and earned serious accolades for its original series Mozart in the Jungle, Transparent, and Man In The High Castle, is now elbowing its way into film distribution. At Sundance this month, Amazon outbid Sony Pictures Classics, Universal, Fox Searchlight and Lionsgate to nab the Matt Damon-produced drama Manchester by the Sea. This is part of a larger trend of streaming services outbidding traditional theatrical distributors and is a major reversal from last year, when both Amazon and Netflix were shut out of the Sundance bidding, indicating streaming services are gaining ground not just with the casual watcher at home, but with directors, producers and actors on the international stage.

Canada Council commits to diversity regulations with teeth. Last June, the Canada Council for the Arts announced a major restructuring of its grant making programs, with plans to reduce its 147 separate programs–each with its own guidelines, deadlines and reporting–to six. The model will go live in April 2017, in honor of the Council’s 60th anniversary. Details of the plan emerged this past month, and the most interesting–and perhaps even radical–of them is the fact that the Council has decided to include diversity among the list of criteria considered when making recommendations of grants and grant amounts. For institutions with revenue of more than $2 million, the diversity of the arts “on stage” as well as that of the team “behind the curtain” will be judged. If your institution does not demonstrate a “commitment to reflecting the diversity of your organization’s geographic community or region,” this will now affect the size of grant received from the federal arts council. If the liberal government keeps its campaign promise, the Council’s annual budget will grow to $360 million over the next two years–enough for the Council to have a real impact on the diversity of the country’s arts organizations. The Council’s decision follows that of Arts Council England, which made a similar shift to towards increasing diversity in December 2014 (though organizations there have until 2018 to get in line.) The United States is not quite there yet, but the nation’s two largest cities seem to be laying groundwork in place: in New York, a survey by the Department of Cultural Affairs released this month indicated that by and large the city’s arts organizations do not reflect the city’s diversity, and Los Angeles County recently formed an advisory committee to examine “proposals that would lead to more diverse arts boards, staff, audience members, and programming at appropriate arts institutions.”

#OscarsStillSoWhite…but not for long? In what the LA Times described as “another embarrassing Hollywood sequel,” the Academy of Motion Picture Arts and Sciences announced for the second year in a row a roster of all-white acting nominees (and no best picture nominations for films focusing on minority populations despite various viable options). This prompted a resurgence of the 2015 hashtag #OscarsSoWhite (and the birth of its offspring #OscarsStillSoWhite), with actors such as Will Smith pledging to boycott the February 28 awards ceremony or calling for host Chris Rock to step aside. The Academy’s board and President Cheryl Boone Isaacs responded with an emergency meeting that resulted in a unanimous vote for “radical changes” with the goal of doubling the number of female and minority members by 2020. These include plans for reviewing and possibly revoking the voting status of the (94% white) lifelong members who are less active in the motion picture industry to make way for more diverse voters; an “ambitious, global” recruitment campaign (as opposed to the old small group nomination system); and the addition of three new board seats (to hopefully be filled by members of color). Though this year’s still-so-white Oscars announcement, and the Academy’s sweeping response, provoked a flurry of media attention (even a statement by President Obama), as we documented in our 2015 annual news roundup, Hollywood has been slowly waking up to the need to do something about its diversity problem over the past year. Despite grumbles from some established Academy members, the overall 2016 public and institutional reaction is in sharp contrast to Jesse Jackson’s failed 1996 protest against a similarly homogenous Oscars lineup. While the effectiveness of the Academy’s latest measures remains to be seen, one can be sure that the organization’s diversity efforts will receive some red-carpet-worthy scrutiny.

Philadelphia Media Network donated to the Philadelphia Foundation. In October, as part of a larger story on alt-weeklies and their perhaps dubious future, we noted that Philadelphia’s beloved City Paper had published its last edition. Philadelphia journalism captures our attention once again this month, but for much better reason. In a surprise move, H.F. “Gerry” Lenfest, the sole owner of the Philadelphia Media Network, gifted the PMN, which runs The Inquirer, Daily News and Philly.com website, to the Institute for Journalism in New Media, a subsidiary of the Philadelphia Foundation. It’s the first time a major local newspaper has gone “nonprofit” since the advent of the internet, and the structure is certainly complicated. While unique and untested, the new alignment has the promise to preserve and enhance public-interest reporting while new electronic distribution methods are developed. The nonprofit status is not yet a done deal (the IRS has yet to weigh in), and the new format won’t necessarily solve outright the newspapers’ varied struggles. However, with newspapers continuing to struggle across the board, if this unusual structure is successful, it’s possible other papers will follow suit.

New directions at the Irvine Foundation. For the past year, James Irvine Foundation president Don Howard has been leading his staff in an deep exploration of what the foundation might change or do better. (You can read many of the responses to this question here and here, and Diane Ragsdale’s response, which pushes back against the foundation’s perspective that arts engagement is the most important issue facing the arts, here.) The foundation, which is the largest funder of the arts in California, has in recent years focused its resources on three areas, (1) engaging in the arts; (2) advancing democracy in California; and (3) preparing youth for success. Now, the foundation has announced an evolving focus: “expanding economic and political opportunity for families and young adults who are working but struggling with poverty.” This new direction seems squarely focused on two of those three areas, with the arts notably absent. The foundation has made assurances that it will remain committed to current grantees for the time being, and work continues apace on several existing programs, including the Arts Regional Initiative which just published a new report. In the long term, however, the arts’ role seems much murkier; a response to an inquiry about continuing arts support promises only that the foundation is “excited to explore how new initiatives focused on creative expression and the arts can be part of new initiatives aligned with our evolving focus.”

MUSICAL CHAIRS / COOL JOBS

• Bruce W. Davis has been named President and CEO of ArtsKC, Kansas City’s regional arts council.
• Charles Thomas, an experienced social entrepreneur and civic innovator, will join the John S. and James L. Knight Foundation as a program director based in Charlotte.
• The School of Public and Environmental Affairs at Indiana University, Bloomington, invites applications for a full-time lecturer faculty position in the area of arts management. Posted January 23; no closing date.
• The Pew Center for Arts & Heritage hiring a Senior Visual Arts Specialist. Posted January 26; no closing date.
• ArtsKC is hiring a Director of Programs and Grants to replace the retiring Paul Tyler. Closing date February 26.

NEW RESEARCH OF NOTE

• A research article published in AERA Open this month lends new evidence to argument for the benefits of arts engagement at an early age.
• Ingenuity’s third State of the Arts in Chicago Public Schools released this month details the arts assets available to CPS students in the 2014-15 school year.
• A longitudinal study of over 700 U.S. companies released this month suggests implementing diversity training programs does not actually increase diversity. On the flip side, a report published by Stanford Graduate School of Education found that at-risk high school students benefit from taking ethnic studies classes, which introduce a diversity of perspectives and may better align with personal cultural experience.
• New York attorney general Eric T. Schneiderman’s office sheds light on widespread abuses in ticketing industry in New York.
• A white paper from the National Center for Arts Research at Southern Methodist University examines the distinguishing characteristics of arts organizations that primarily serve communities of color, in a response to the widely discussed (and criticized) report from the DeVos Institute on the same topic last year.
• Move over TV: Repucom, which researches sports and entertainment markets, surveyed adults between 13 and 34 in Britain, France, Germany, Japan and the United States and found that music is the top leisure interest for the millennial generation.
• Linguists Carmen Fought and Karen Eisenhauer analyzed all the dialogue from the Disney princess franchise and found that even in movies where the princess is the protagonist, male roles speak more than female roles.
• A few studies this month looked at art through a city lens. One, published in the academic journal Economic Development Quarterly, looks at the links between big performing arts organizations (those with budgets over $2 million) and the change in what Richard Florida defines at the ‘creative class’. A report commissioned by the Boston Foundation shows Boston trails other cities in institutional arts funding, and the Three-City Arts Study, released by Partners for Sacred Spaces, provides a scalable, replicable model for matching small to mid-size dance and theater companies having space needs with historic sacred places that have available space.
• Two reports this month looked at the contemporary art market. One, released by economics professors at the University of Luxembourg suggests that the international art market is overheating, creating the potential for a “severe correction” in the postwar and contemporary and American segments. Another looks at what kind of person who opens a private contemporary art museum.
• And finally, looking to the international stage, UNESCO released a report on the impact of the “Convention on Protection & Promotion of Diversity of Cultural Expressions,” and the 2016 Global NGO Online Technology Report provided insight into the global NGO sector and its use of online technology.

• Glenn Beck is at it again: the right-wing broadcaster recently attacked the U.S. Department of Arts and Culture along with the Imagining America initiative on his Internet show, The Blaze. Far from a government agency, the USDAC is a “citizen-powered” art project that hasn’t received any public funding to date. Not one to be deterred by facts, Beck claims the two groups are “America’s newest propaganda machine” attempting to “rewrite our history.”
• The Metropolitan Museum of Art has signed a new lease with the city of New York that clarifies the museum is allowed to charge a suggested admissions fee, and added fees for special exhibitions. A lawsuit filed earlier this year alleged that the Met’s previous lease with the city required the museum to be free to the public five days a week.
• Cultural policy researchers in England are crying foul over Arts Council England’s “long-standing bias” toward organizations based in London, which receive a whopping 82% of funding, and asking it be redistributed proportionally to the population across the country.
• A number of theaters in upstate New York are concerned about the possible opening of several casinos in the area and the potential impact on booking major performers and retaining audiences. The advocacy group Upstate Theaters for a Fair Game is seeking protections from the state to “‘establish a fair and reasonable partnership” between the casinos and the local market.

IN THE FIELD

• The Museum of Modern Art sure is committed to staying on top of digital trends in education: it jumped on the MOOC train early, and now has a new partnership with Khan Academy.
• Two Latino theater companies in New York, Pregones Theater and the Puerto Rican Traveling Theater, are getting set to merge with the help of Time Warner and the Ford Foundation. The two performing ensembles will retain their original names under the new organization, but will share resources.
• The Theater for a New Audience has moved into its first permanent home after spending the last 34 years producing shows in a variety of rented spaces around Manhattan. City planners view the completion of the newly constructed theater as “the capstone” to a downtown Brooklyn cultural district long in the making.
• What’s going on with the Brooklyn Philharmonic? The NYC-area orchestra made a splash back in 2011 with a daring programming strategy focused on marrying classical music with other more widely popular genres as well as local composers and artists. But all the positive press and attention the new direction received apparently wasn’t enough to stanch the organization’s financial bleeding.
• While the debate rages on over whether Spotify is good or bad for musicians, YouTube muscles in on its territory by planning a subscription service that would give users on-demand, ad-free access to music videos on their mobile phones.
• Musicians of the Charleston Symphony Orchestra recently voted to break from their local union chapter of the American Federation of Musicians in an unprecedented industry move. The decision was reportedly motivated in part by the “understanding that to be successful as an orchestra in the future, [they] need more flexibility, they need to be nimble, and…unions sometimes get in the way of that.”

ALL ABOUT THE BENJAMINS

• With 71 percent of projects getting funded (compared to the 43 percent average), the dance community boasts the highest proportion of successful Kickstarter campaigns. Theater clocks in at second place with a 64 percent success rate.  Is this evidence that arts orgs are reaching new supporters – or just swapping money back and forth between their friends?
• Pop quiz: which nonprofit group has successfully  “reduc[ed] its reliance on foundation funding, buil[t] new revenue sources” and is “constantly experimenting and challenging assumptions around who their audience is and what they care about”? Nope, not the arts — nonprofit news outlets.

BIG IDEAS

• Barry Hessenius’s Arts Dinner-vention has wrapped, and the edited video has been posted in seven installments; GIA collects them all on one convenient page. The conversation among some of the leading lights of arts administration explores ideas for the future across three areas: the role of the community, new format and delivery mechanisms, and the artist’s role and artist ecosystems.
• Say you didn’t require a project budget as part of that RFP. What’s the worst that could happen? Michelle Williams calls for grantmakers to trust the artists we work with, and she catalogues some innovative ideas from the GIA 2013 conference.
• Scott Walters has a new blog series examining the history of the regional theater movement by riffing on Todd London’s An Ideal Theater: Founding Visions of a New American Art. London, incidentally, delivered what reads like a doozy of a talk on innovation at the recent National Innovation Summit for Arts + Culture.
• Michael Kaiser’s latest book, The Cycle: A Practical Approach to Managing Arts Organizations takes an optimistic look at the difficult and delicate task of building an arts organization that is effective and strong enough to last.

RESEARCH CORNER

• The National Endowment for the Arts is offering a $30,000 prize for an interactive application that will “make the rich content of the 2012 [Survey of Public Participation in the Arts] more accessible to the public through a series of interactive, visually appealing, and easy-to-use data visualization tools.” Submissions are due February 3.
• A new study by On the Move examines how European cities support “cultural mobility” – the ease with which artists and cultural professionals engage outside their home region.
• In an effort to increase both convenience and access to data on the nonprofit sector, major players Guidestar and the Foundation Center have entered into a strategic partnership meant to “support the field in new and innovative ways.”
• The Whole Schools Initiative in Mississippi reports that 5,000+ students participating in an arts integration program performed significantly better on fourth and fifth grade state assessments than their peers.
• For its Arts, Culture and Audiences week, the American Evaluation Association highlighted assessment practices in arts education with a series of blog posts stressing that assessments can be “hands-on, active learning experiences for students.”
• York University and the National Ballet School in Toronto are partnering to conduct a pilot study with the hopes of providing scientific evidence of the positive mental and physical effects of dance on people with Parkinson’s disease.
• Grantmakers in the Arts’s ongoing research into support for individual artists has generated a crop of admirably detailed case studies of how a nonprofit grantmaker, state agency, private foundation, and family foundation select recipients for their awards to individuals.

Posting has been light around here lately because I am in the midst of another move. I am coming to the end of my official residence in Rhode Island, where I have been plying my trade and generally causing trouble for the last year or so. I’m moving back to New York to join the rest of my Fractured Atlas colleagues in the West 35th St office, and have been subletting a place this month in Harlem/Morningside to provide a home base for apartment searching (which thankfully looks to be over) and unpacking. I really enjoyed my time in Providence – it’s a very cool small city that has a lot going on for its size and very much “gets” the value of the arts and creative industries in a way that many places don’t.

• Much has been made of the NEA’s new investment in urban revitalization, but since the agency’s budget looks like it will be the same or a little less compared to last year, this is all something of a zero-sum game. In this case, looks like Dana Gioia’s “The Big Read” program is the big loser in Rocco’s reorganization of agency priorities. (As an aside, I came across this old-ish articlecatching up with former NEA Communications Director Yosi Sergant this weekend and noticed the following observation: “in Sergant’s department of 14 people, four were dedicated to making books-on-tape.” Another legacy of Gioia’s literary-centric worldview, perhaps?)
• By the way, did you know the NEA has a YouTube channel? Here’s Design Director Jason Schupbach talking about “creative placemaking.” There’s much more here.
• Meanwhile, right wingers are hot on the trail of arts funding again, though so far it seems less organized than it was for the Sergant incident. The same “arts jobs are not real jobs” lie that we heard during the stimulus fight is once again front and center. (Michael Rushton patiently explains why it’s not true.) Senators Coburn and McCain have continued to identify arts projects supported by the federal government as “wasteful” for no other reason than that they are arts-related, offending Gary Steuer in the process. Perhaps more troubling is the newfound focus by conservatives on state and local funding for the arts, led predictably by Glenn Beck.
• Looks like Bill Gates’s and Warren Buffet’s efforts have had some impact: 10% of the world’s billionaires have now adopted the Giving Pledge to donate at least half of their wealth to charity before or at death. Notable arts supporters among the list include Gerry and Margaret Lenfest, Eli Broad, Michael Bloomberg, Paul Allen, Joan and Irwin Jacobs, Bernard and Barbro Osher, and Sanford and Joan Weill. Hopefully they’ll listen to Kathleen Enright’s advice for them.
• Grantmakers in the Arts is ramping up an interesting-looking series of guest blogs, and the latest is a grantmaker-grantee conversation between Ute Zimmerman and Theaster Gates.
• Retrospective: Michael Kaiser looks back on the Arts in Crisis tour, and Conni of Conni’s Avant-Garde Restaurant takes stock of inventory after a year of support from the Economic Revitalization for Performing Artists program.
• Delinquent nonprofit form filers are getting one last chance from the IRS to prove they still exist: file the 990-N “postcard” form online by October 15. Otherwise, it’s lights-out.
• Newsweek may be considering going nonprofit.
• Massachusetts has signed a law empowering local communities across the state to define their own cultural districts and identify incentives for their development. The Massachusetts Cultural Council will manage the program. Earlier this summer, the MCC had been in danger of getting moved under the aegis of a new quasi-public agency called the Massachusetts Marketing Partnership, but it looks like that proposal is off the table.
• So in addition to seven-figure salaries, we need to be giving top culture executives seven-figure tax-free housing as well? I want to see Dan Pallotta‘s defense of this. It’s not all fun and games, though – sometimes you get a full-fledged performance review from your colleagues in the New York Times. If you too want to be a culture executive, Laura Zabel explains how did she get that job.
• I was totally going to give Devon Smith a rest after linking to her blog a bunch of times over the last few months, but dammit, she keeps coming up with fantastic new stuff that can’t be ignored. Her “Social Media Measurement Plan” is perhaps her most ambitious post yet, chock-full of tips and tricks to track your online footprint. It’s seriously a must-read. I’m starting to think maybe we should try to keep Devon from getting a job after all because then she’ll keep giving this stuff away for free. (Just kidding, D.) Devon has a panel proposal in the mix for South by Southwest Interactive; and Fractured Atlas has two, one for Interactive and one in Film.
• By the way, you can vote for those SxSW panels, thus helping to choose the content of the event you’re going to. Ever since I wrote that article on crowdsourced philanthropy platforms, I’m always coming across new systems that I wish I could have discussed as part of it. Case in point: IDEO’s new collective design hub for the good of the world, OpenIDEO. Meanwhile, Lucy Bernholz declares “Curator” to be the philanthropy buzzword du jour.
• Iranian leader declares music incompatible with Islamic values.
• Are affluent Westerners psychologically different from the rest of the world?
• So, this is…unexpected: Paul Miller, aka DJ Spooky, “is setting up a foundation dealing with contemporary art in the South Pacific [specifically Vanuatu], he’s got 400 acres of land on the island, and will be inviting artists, writers, film makers, composers etc from all over the world to do small residencies of several weeks each. They’re going to have artist residencies starting mid next year, and the whole venue will be based on bamboo.”

• Philanthropy News Digest highlights a few examples of non-profit newspaper models around the country.
• Cool story about Lower Manhattan arts organizations banding together to improve their joint situation, to the point of actually sharing audience and financial figures with each other. Well done, and hope it yields results.
• Leonard Jacobs (proprietor of the Clyde Fitch Report) responds to my rant from the other week. I must have made an impression on him, because he says he’s a loyal reader now. (Thanks!)
• Liz Lerman proposes a “job swap to save American capitalism” — have the artists run Wall Street.
• Great story about a new minority-led orchestra in DC aiming for a much more diverse audience than the usual classical music crowd, and from all appearances so far, succeeding.
• A propos of my Disney post from the other day, did you know that the economically optimal term of copyright is 14 years?
• Former New York City Cultural Affairs Commissioner and general arts bigwig Schyler Chapin passed away over the weekend.
• Andy Horwitz of Culturebot posts a manifesto of sorts on arts policy. It’s mainly very good stuff, though I have to disagree with this:
  

  No more M.F.A.s! There is nothing more useless than a Master’s degree in arts administration or an arts administrator who possesses one. Not only does the “book learning” rarely have anything to do with the real world, it creates a peculiar breed of person who feels entitled to respect (and a senior position) without possessing any prior actual experience. Cultural institutions don’t need more MBA-style administrators who are constantly looking for the next best opportunity. Cultural institutions need administrators who are hands-on and capable. More importantly, because of the extraordinarily ephemeral nature of arts + culture, the institutions need the knowledge management which comes from long-term employee retention.

Ignoring for a moment that he seems to conflate MFAs and MBAs (for a second I thought he was advocating getting rid of conservatory drama and painting programs, which is another matter entirely), I will say in defense of my education that I’ve learned a tremendous amount about the world in my two years here at the Yale School of Management, a perspective that would have been, if not impossible, at least very difficult to acquire if I had stayed inside the industry this whole time. I do agree that prior arts experience is something of a prerequisite for senior management jobs in the arts; on that he’ll get no argument from me.

Up on Capitol Hill, the Obama stimulus package has passed both the House and the Senate — but there’s just one problem: the Senate version doesn’t include the $50 million for the NEA that was in the original design of the bill (and that made it through the House). Americans for the Arts has set up another trusty tool to email your Congresscritters here. If you have any time at all, I strongly urge you to use it — few would debate that what the arts need most right now is cold, hard cash, and $50 million is less than one ten-thousandth of the package that Congress is about to dump on America.

Here are some other news and notes from around the web:

• Veteran staffer and Yale Drama School grad Patrice Walker Powell has been named Acting Chairwoman of the NEA.
• Matthew Guerrieri calculates how much of a bailout the arts really deserve in the stimulus package, using the assistance afforded to the auto industry late last year as a benchmark. How does 12.4 billion smackers sound to you, America?
• Robin Pogrebin in the NY Times has a round-up of recent arts-related developments on Capitol Hill and names some other possibilities for NEA Chair, including Wynton Marsalis, Agnes Gund, Richard J. Cohen, and Bill Ivey. Musical America’s Susan Elliott gives the inside story of the meeting between the arts service organization lobby and the Obama transition team earlier this month.
• That pesky Secretary for the Arts business gets some more bad press. Isaac rebuts.
• Andrew Taylor talks about perverse incentives in the arts.
• Mayor Mike was the leading individual donor in the US last year, handing out $235 million to recipients including a ton of arts organizations in NYC. Not all of the top donations by individuals last year took the form of money, however. According to the Slate 60, the Harvard Art Museum received a gift of $45 million from Emily Rauh Pulitzer along with 31 works of art that, according to the museum, were worth four times as much as the cash, bringing the total value of the gift into the $225 million range.
• Via Tactical Philanthropy, the Chronicle of Philanthropy has a new Innovations column highlighting new and interesting funding models for nonprofits. It’s normally available by subscription only, but the first one is free. Also, Bill Gates on the role of foundations.
• Lucy Bernholz is the latest blogger to get on the twitter bandwagon.
  

  I’ve been invited to comment on people’s books, slide shows, and discussions, been offered condolences by people I’ve never met, had poems sent to me from friends in other countries, songs recommended to me, and conferences brought to my attention. I’ve been asked to participate in a radio program and a speakers bureau, invited to judge a business plan competition, and discovered that communicating with direct messages in twitter beats email hands-down for some conversations. I’ve also found that folks too hesitant about their writing to comment on blogs will opine away in twitter – being confined to 140 characters puts the Ralph Ellisons among us on the same footing as those who find pain in writing grocery lists. Because twitter feeds into my facebook page I’ve also reconnected with three friends from high school.

  I haven’t joined yet…I’m kind of scared. Anyone out there have experiences to share?

• The guru of the aforementioned Yale Ivestments Office, David Swensen, co-wrote an op-ed in the Times this week arguing that it’s time for newspapers to move to a nonprofit model. It’s almost like he’s been reading my blog:
  

  If we can agree that journalism does provide an indispensable public good, in the form of in-depth, factual information not available anywhere else, I can’t help but see it gravitating toward a contributed income model in the coming years. No matter what steps the current industry giants take to shore up revenue streams, whether it be the Washington Post buying Kaplan or the New York Times Co. grabbing a piece of New England Sports Ventures, their core journalism operations will remain loss leaders, and thus vulnerable to cost-cutting pressures. Absent a significant change in industry dynamics, I would not be surprised if nonprofit journalism models become more common in coming years.

  Seriously, though, I do think that nonprofit status represents the most plausible, if not the only, path to salvation for our nation’s most respected news operations. (To be clear, this is not about saving the newspaper as a form, as if that were any more important than saving microfiche. This is about saving the concept of a news-gathering institution with the infrastructure to conduct the kind of original investigative and large-scale journalism that blogs and citizen reporters, even the best of them, can’t replicate on anything like a consistent basis.) Of course, this is still a very controversial idea, provoking responses like this one from Allison Fine: “Times Editorial = Downright Stupid.” I’ll let you be the judge:

  So, newspapers are a sacred trust that now require tax exempt status to survive according to the authors, David Swensen and Michael Schmidt, neither of whom are journalists or nonprofit professionals. Instead one manages the financial portfolio at Yale that lost nearly 30% of it’s value last year and the other is a “financial analyst” whatever that means. [….] I am not a journalist or an expert on that subject

  Aside from pot calling kettle black, Swensen and Schmidt are in fact nonprofit professionals, given that they work for Yale University, which last I checked is a nonprofit organization. Furthermore, it’s hard to see the endowment losing 30% of its value as some kind of indictment when the rest of the market has lost 40% over the same period. Fine does have a point that raising money to support a $5 billion endowment is probably a pipe dream, but I think Swensen’s point was more that we have endowments that are bigger than that already, so it’s not like the idea is completely absurd.

• Sometimes the intersection of politics and the creative industries can be unintentionally hilarious. (see pic at the top of this post)
• Other times, intentionally so (and poignant, too). Well done, Bronx Zoo.

The Flanagan report confirms that labor costs at the nation’s top symphony orchestras have, indeed, risen faster than earned income, and this has some people upset. They seem to think that the report is a Chicken Little doomsday speech pushed by a cadre of orchestra managers in a conspiracy to build a public case for breaking the musicians’ union. While I can’t speak for the motivations behind the report’s origin, the report itself doesn’t say anything of the sort. On the contrary, it states on page 87 that,

The trend in total performance plus nonperformance revenue (regression 8) is modestly higher than the trend in total expenses (regression 9), so the overall financial balance improves slightly over time, after controlling for the effect of general economic conditions.

So orchestras (or at least the 63 relatively wealthy ones that were a part of the study) have successfully compensated for their increased labor costs by a combination of raising prices and seeking more donations—exactly what Baumol and Bowen’s model predicts. Now, there is nothing inherently wrong with raised prices and more donations, assuming the market can bear it. And when combined with increased price discrimination, such as in the case of college financial aid programs, the social effects can be quite positive as access is increased rather than limited. However, an increasing reliance on contributed rather than earned income still feels scary, because contributed income just seems less stable. How can we count on people to just keep giving money away, against all rational instinct? Although orchestras have managed to stay afloat these past few decades, with some experiencing genuine financial success, I don’t see these issues going away anytime soon. The entire model is extremely dependent on the orchestra’s ability to find new donors and convince existing donors to give more and more for essentially the same experience. If the bottom were to suddenly drop out of that revenue stream, orchestras would find themselves incredibly exposed.

Now, what does this have to do with newspapers? Well, in addition to my Nonprofits class I’ve also been taking a course called Media Economics and Financing Journalism, taught by a member of the family that used to own the Boston Globe. As the semester has progressed, I’ve slowly become convinced that newspapers are in almost the exact same boat as symphony orchestras. They also face a Baumol effect in that technology advances have had limited benefits for the efficiency of quality original reporting. Furthermore, the most profitable sections of the newspaper (the sports, travel, and health pages) and the section that provides the most public good (the news division) are not the same. Our guest speaker in class yesterday even remarked that the demographics of his newspaper subscribers and subscribers to the local orchestra are virtually identical: aging, upper-income, and mostly white. However, unlike orchestras, most newspapers have had to rely solely on earned income to compensate for their rising labor costs—and so far, it’s not working. As a result, staff positions are being cut at print publications all around the country, with critics (music, dance, theater, and now even film) some of the first to go. After all, why should a paper pay someone to go see a movie and write about it when so many are willing to do just that for free? Even the educational environment in the two fields invite parallels, with both conservatories and journalism schools churning out new graduates at record rates, giving them the highest quality training for jobs that simply don’t exist.

If we can agree that journalism does provide an indispensable public good, in the form of in-depth, factual information not available anywhere else, I can’t help but see it gravitating toward a contributed income model in the coming years. No matter what steps the current industry giants take to shore up revenue streams, whether it be the Washington Post buying Kaplan or the New York Times Co. grabbing a piece of New England Sports Ventures, their core journalism operations will remain loss leaders, and thus vulnerable to cost-cutting pressures. Absent a significant change in industry dynamics, I would not be surprised if nonprofit journalism models become more common in coming years.