Study: Arts industry faces big slump, more competition for money and audiences in last decade

Arts industry faces big slump after much growth

WASHINGTON — The number of U.S. arts organizations grew by thousands over the last decade, but many are now struggling with greater competition for audiences and charity dollars, according to a national study of the industry’s health.

The first National Arts Index released Wednesday by the group Americans for the Arts shows the nation’s arts businesses fell into their biggest slump in more than a decade in 2008. It looks at 76 indicators, including music royalties, Broadway ticket sales, museum visits, philanthropy and the number of college art majors.

The index registered an overall 4.2 percent decline for the arts sector from 2007 to 2008, though researchers say the problems began brewing much earlier.

“The issues that arts organizations are facing right now aren’t simply a function of the economic downturn,” said Robert Lynch, president of the group. “You can really see the arts have been losing market share in areas of private philanthropy fairly steadily for a decade now.”

Some groups have failed to prepare for the lean times or adapt to changing audiences as the nation grew more diverse, he said.

Arthur C. Brooks, an economist and president of the conservative American Enterprise Institute who advised on the study, said corporate arts funding probably won’t rebound, and some arts groups need to go out of business.

“People are voting with their feet, away from paying high ticket prices and more toward doing the arts,” said Brooks, who once played the French horn professionally.

U.S. Rep. Louise Slaughter, a Democrat from New York, said the study shows the need for continued public investment in arts programs. Others said the arts remain critical for economic development in the nation’s cities.

The study is based on government and private sector data covering finances, employment numbers, educational statistics and consumer spending. The index comprises four years of research and will be updated each year in October.

Among the key findings:

— The number of nonprofit arts groups grew from 73,000 to 104,000 since 1998 — at the rate of one every three hours between 2003 to 2008. Still, one out of three failed to break even on their budgets, even in the best economic years.

— The arts follow the nation’s business cycle and depend on billions of dollars in consumer spending. Researchers predict the arts “may not ‘hit bottom’ until 2011″ when a rebound will begin.

— Public participation in the arts is increasing on the Internet, at ethnically and culturally specific organizations and at home as people create their own art. Attendance at mainstream arts organizations is in a steady decline.

— Arts and cultural groups are losing market share of philanthropy to other charitable causes, including international, environmental and disaster relief.

— Demand for arts education is up as more college-bound high school seniors are completing four years of arts and music, and the number of college art degrees conferred annually has grown by 45,000 over the past decade.

The study noted New York’s Metropolitan Opera was a model in building new audiences with its popular simulcasts in movie theaters. In Tennessee, the group ArtsMemphis created an iPhone application to provide instant access to the area’s cultural calendar.

Americans for the Arts, which is celebrating its 50th year with the release of the study, noted there were just a few thousand nonprofit arts groups in the 1960s. Now there are more than 100,000. But other business models, such as arts incubators, shared facilities and partnerships with non-arts groups could guide the future.

“The problem is not that there’s too much arts in this country,” said Randy Cohen, the group’s vice president of local arts advancement and co-author of the study. “But we do need to focus on the new business models.”

On the Net:

Americans for the Arts: www.americansforthearts.org/