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Expectations Feed The Disease

Thai-Klingon cellist Jon (J’onn) Silpayamanant commented today on a post I did on economist Tyler Cowen’s discussion of Baumol’s cost disease as it relates to the arts. He quickly followed up with another comment apologizing because he assumed I was talking about piece Cowen did in 1996 rather than a more recent post on his blog where he makes much the same point.

I started to write a slightly snarky response wondering if Cowen had been more efficient writing the more recent piece because he had better technology and 16 years of thinking about it to back him up or if he was subject to cost disease because it took just as long to write four or five as it did back in 1996, inflation has made his time more expensive and he had to distill down 16 years more experience into a thoughtful entry.

At that point it occurred to me that every time people talk about cost disease related to the arts, they do it in connection with the actual performance. Other parts of creating art has actually benefited from greater efficiencies. Computers aid the design of performance elements as well the transmission and discussion of those designs allowing them to be received and acted upon much quicker than in the past. The marketing and advertising of the performances are likewise aided by technology in terms of design and dissemination. LED lights promise to cut electricity bills by an enormous amount once the ability to control and insure the quality of the light improves.

The quality of the performance itself also has much more potential of benefiting from technology in terms of the amount of research the performers, directors, choreographers, conductors, etc can do in preparation. Every aspect of the performance can be informed by concepts promulgated half the world away. In many respects, the audience is getting a much better product than they were years ago and it is made possible less expensively than in the past.

In fact, they are in a position of being far more informed about a performance they are about to see than a person with the same level of experience with the arts 10 years ago might have. Of course, the whole issue we have is whether the audience values that experience or not.

Had Cowen used this approach in support of his argument that the arts aren’t really impacted by cost disease, I might have been a little more receptive to it.

In some respects, I think that non-profit performing arts have done a great job of employing technology to keep their costs under control, (often to the detriment of the artists, orchestra musicians in particular these days), in comparison with the movie industry where technology has resulted in sky rocketing costs. They employ wide spread distribution options like movie theatres, DVDs and streaming as a substitute for economizing.

It is often said there is a lesson in that for the performing arts but just like the independent film maker, the small arts organization would have to depend on a relationship with a big company with the resources to replicate something on the scale of the Metropolitan Opera and National Theatre broadcasts.

Of course, many times audiences demand the spectacle that technology brings to the movies and some of that carries over to even the solo artists that Silpayamanant mentions. While touring solo might have been a cost cutting measure at one time, that often isn’t the case any more with the huge tours many major acts take on the road.

As an aside, I wonder at the economics of J-Pop groups like AKB48 which has 66 active members spread out across four performing teams. Even though they don’t tour, that is a lot of people to support.

But getting back to the discussion of Baumol’s cost disease, even though people cite the fact it still takes as long to perform a particular work as it did X hundred years ago, it probably really isn’t those two hours of performance that is the costliest part of the process, it is everything else that surrounds it. Because of audience expectations about their experience more preparation precedes the performance, much of which involves salaries and benefits.

As I noted above, technology has brought efficiencies and quality to many parts of the preparatory process. What is it coming down to now is balancing the expectations about the quality of the experience and the cost of delivering it with what people are willing to pay. Right now the focus seems to be on how much of the product can be trimmed back before people notice and become concerned with the drop in what they value.

While this is translating into seeing how many musicians an orchestra can cut before people figure the music is suffering, you see the same thing manifesting in other areas of your life as well. Just try to buy a half gallon of ice cream these days. You will find it is 1.75, maybe 1.5 quarts.

I don’t think that is really a sustainable practice. There should be an corresponding push to shift customer expectations too, and not toward accepting less ice cream and music for the same price, but rather expecting a slightly different sort of experience surrounding a quality performance. I am not sure exactly what it would look like. I know I would like it to be less structured and more educational than what we have now.

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  1. The Cure For The Common Cost Disease | Adaptistration - December 9, 2012

    [...] big hats off to Joe Patti over at Butts In The Seats for posting an absolutely terrific article on 12/3/2012 that casts a pragmatic eye on Baumol’s cost disease. And if there’s ever a [...]

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