Bach to the future: Orchestra Iowa composes innovative, successful business model

Organization has grown to be the state’s largest not-for-profit

By Diana Nollen, The Gazette
Published: May 4 2014 | 12:01 am - Updated: 5 May 2014 | 5:19 pm in Business Rotator,

CEDAR RAPIDS — For Orchestra Iowa, diversification no longer means adding an occasional saxophone to the mix.

The ensemble, which marked its first downbeat on April 13, 1923, is orchestrating a future more broad than its founders could ever have imagined.

The Floods of 2008 not only forced the group out of its home in the ravaged Paramount Theatre but forced its leaders to reinvent a business model so vivace that the 91-year-old organization is balancing its $3.1 million budget while too many orchestras across the country have been floundering.

On March 25, the Milwaukee Symphony announced it had raised $5 million in emergency funds to keep afloat after a budget shortfall from fiscal year 2013 threatened its future.

In Minneapolis, an independent financial review showed that the Minnesota Orchestra had accrued “budget deficits of more than $22 million in the three-year period of fiscal year 2010 through fiscal year 2012,” and “if not corrected, its growing operating budget deficits could ultimately result in the Orchestra completely spending down its endowment.”

The Minnesota Orchestra was dark for an entire season, as it struggled through a 15-month labor dispute and lockout that ended when a new three-year contract was signed in January. Musicians returned to the stage in February and the New York strategy firm tasked with reviewing the organization’s finances deemed its new strategic plan “sound.”

The dispute came at great cost. The orchestra’s conductor quit, a number of musicians sought employment elsewhere and the president and CEO has agreed to step down on Aug. 31.

Orchestra Iowa, however, is succeeding, thanks to a business model unlike any other, according to CEO Robert Massey and Music Director Timothy Hankewich.

“We’re incredibly entrepreneurial,” Massey said, with the end result being stability.

Arts Iowa

Orchestra Iowa has grown to be the state’s largest not-for-profit performing organization in terms of budget and performance schedule. That budget has doubled from a low of $1.6 million right after the flood, and 150 concerts are staged per year in the Corridor, in all Cedar Rapids and Iowa City schools and in venues in such cities as Fairfield, Davenport, Mason City, Ottumwa and Coralville.

It’s also the only Level 3 orchestra in Iowa. On the industry scale of 1 to 8 — with 1 being the nation’s largest orchestras to 8 being very small community-type groups — Massey said Orchestra Iowa has moved up two levels since 2008, surpassing the Level 4 Des Moines Symphony.

“What we’re doing is incredibly revolutionary” in the orchestral industry, Hankewich said. “In essence, it’s diversifying our income portfolio.”

Orchestra Iowa operates under an umbrella best described as Arts Iowa. As a business entity, Orchestra Iowa offers core programming of symphonic concerts, opera and ballet through collaborations with the Cedar Rapids Opera Theatre and Ballet Quad Cities, as well as key presenting partnerships with Hancher, Theatre Cedar Rapids and VenuWorks, which manages the Paramount for the city of Cedar Rapids.

Broadcasting partnerships with Iowa Public Radio and Iowa Public Television take the orchestra’s symphonic and chamber concerts to all 99 counties in the state. The Orchestra Iowa School, founded in 1986, is a separate entity under the orchestra’s umbrella, bringing instruction to 400 students through individual lessons, group programs and choruses.

In addition, Orchestra Iowa:

•Acts as the ticketing and public relations agents for all events at the Paramount Theatre

•Runs the Opus Concert Cafe, showcasing chamber, jazz and cabaret concerts, as well as offering a lounge for receptions and concessions during all Paramount events, providing a new revenue stream for the orchestra and the city

•Produces the Paramount Presents series, contracting world-class performers, most recently featuring William Shatner’s solo Broadway show, the King’s Singers from Great Britain and Pink Martini with the von Trapps.

“It sounds like Orchestra Iowa has taken the steps that need to be taken,” said Rachelle Schlosser, director of media relations for the League of American Orchestras in New York, an advocacy, development and education agency for the nation’s 800 orchestras.

Innovative programming is crucial, she said, citing Orchestra Iowa’s outreach within the community and farther afield in the state, as well as efforts to bring other audiences into the Paramount and non-traditional sites, such as the outdoor Brucemorchestra season opener established after the flood.

Such measures are helping orchestras rebound after taking hard hits during the recession, as well as meeting demand from changing demographics and technology.

“The actual experience of an orchestra has a very primary impact on people,” Schlosser said. “We’re also living in a time of great innovation and experimentation.

“Orchestras are doing a lot to attract younger audiences, using technology. Some are opening up ‘tweet-seat’ areas and having more informal gatherings.”

Using technology within concerts creates a more engaging way to connect with audiences, she added, from doing light shows against buildings during outdoor concerts to using video screens at indoor venues. Orchestra Iowa has done both, using videos and slides during Paramount concerts and most notably, using NASA solar system footage during a 2010 performance of Holst’s “The Planets” on the Brucemore mansion lawn.

"That is the way to really reach out and hit your community,” Schlosser said of the popular Brucemorchestra concerts that have drawn as many as 4,000 audience members for an outdoor artistic experience. If they like what they hear, they just might follow the orchestra indoors.

“It’s just a really good way of developing future audiences,” she said.

That’s the intersection of artistic and business pursuits.

ART AS BUSINESS

“People don’t realize that the arts are a business,” said Maestro Hankewich, who has been at the helm since 2006. “... As an audience member, when the lights dim, you’re getting ready to be swept away by the performance.

“The last thing a person in the audience thinks of is that the people onstage have just clocked in and started work. They’re assuming the motivation for the orchestra onstage is the same motivation for them coming to our program.

“And yes, the musicians love the art, but we have a core of professionals who are paying the rent, trying to make a living like everybody else.”

Hankewich said the ensemble is about $2 million away from being a full-time orchestra. In the meantime, 68 contracted players are paid per service and fall into different tiers — 14 musicians play in all the symphonic, ballet, chamber and education services, earning enough money to justify relocating from a city as large as Cincinnati; and others supplement their income by teaching, playing in various Midwest orchestras or working other day jobs.

Massey said about one-third reside in Cedar Rapids, one-third in Iowa City and the other third come from as far as Chicago, Minneapolis, Kansas City, Lincoln, Omaha, Des Moines and the Quad Cities.

More are added for large-scale productions such as the March 1 Mahler “Resurrection” symphony that required nearly 100 instrumentalists.

Thirteen people work in the orchestra’s administration, handling day-to-day operations. A board of directors provides oversight and hired Hankewich and Massey, a one-time professional trumpet player whose interest turned to business years ago.

He said that, on paper, the music director is responsible for all things artistic, while the CEO is responsible for all things administrative and business. The reality is that they need to work as a team to succeed.

“There is no such thing as a purely artistic decision,” Hankewich said. “Every choice that I make has financial implications — the size of the orchestra, what repertoire we play, what kind of soloists are we going to bring in, what are some of the outreach opportunities to build audiences — everything has an expense to that.

“And so if you have an artistic director that doesn’t understand the business or a CEO that doesn’t understand the art, then you’re not going to get anywhere.”

Comments: (319) 368-8508; diana.nollen@sourcemedia.net


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