Guiding Principles for a New Classical Music Venture in Silicon Valley

1
Guiding Principlesfor a New Classical Music
Venture in Silicon Valley

• Symphonic Music Working Group Meeting
• June 17, 2003

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The following guiding principles

• Establish criteria for a new symphonic music /
  classical music initiative in Silicon Valley
  
• Can test the likelihood of success of any
  proposed venture
  
• Are based on research conducted in Silicon Valley
  and nationally

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• Principle 1
• The new venture must be entrepreneurial and
  visionary, avoiding any pre-determined industry
  model.

4
Rationale

• An organization that is defined narrowly(will
  be) limited in its potential impact on consumers,
  whose tastes are diversifying.
  
• Audience development efforts must reach beyond
  the concert hall into peoples homes, houses of
  worship, schools and automobiles.
  
• An organization that focuses on helping people
  appreciate music is what participants value.
  
• (Audience Insight Focus Group Summary Report
  April, 2003)
  

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• Principle 2
• The new venture must be consumer-centric, not
  product-centric, with offerings shaped by
  community demand.

6
Rationale

• Unless and until orchestras decide their mission
  is to serve audiences in the ways audiences want
  to be served, they will never attract more than
  the current three to four percent. And I would
  argue that as demographics change, they wont
  even be able to retain that.
• Penelope McPhee (John S. and James L. Knight
  Foundation), Orchestra and Community Bridging
  the Gap, Harmony, no. 15, October, 2002, p. 30

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• Principle 3
• The new venture must have maximum flexibility in
  terms of what it offers as well as when, where,
  and how programs are presented.

8
Rationale

• Recent survey indicates consumers want
• programming not limited to standard orchestral
  fare
  
• flexibility of offerings at different venues
  around SV, in a variety of ensemble
  configurations
  
• programs offered in informal and outdoor
  settings
  
• wider range of concert formats and days/times
• programming designed around activities, moods,
  emotions
  
• (Audience Insight On Line Study April, 2003)

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• Principle 4
• The new venture must incorporate education and
  training as part of its mission.

10
Rationale

• 95 of SV residents believe students should
  receive arts education each week.
  
• 25 of respondents would like to learn a musical
  instrument. (Creative Community Index
  Cultural Initiatives/Silicon Valley 2002)
  
• Roughly 75 of symphony attenders nationally have
  played an instrument or sung in a
  choir. (Classical Music Consumer Segmentation
  Study Knight Foundation 2002)
• Among those who never attended the SJS, the
  highest rated investment strategy is a training
  orchestra for young musicians. (Audience Insight
  On Line Study April, 2003)

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• Principle 5
• The new venture must take into account what is
  already available to the Silicon Valley consumer
  and avoid duplication.

12
Rationale

• There are over 50 organizations (including 28
  orchestras) offering approximately 400 classical
  music events annually in SV.
  
• This is a fraction of total classical music and
  orchestra events available in entire Bay area.
  
• The Competitive Marketplace for Classical Music
  in Silicon ValleyWolf, Keens Co March, 2002

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• Principle 6
• The new venture must fit into the larger Bay Area
  classical music picture and make use of
  partnerships with existing, soundly financed
  organizations to realize economies of scale and
  avoid creating unnecessary infrastructure.

14
Rationale

• San Jose-based organizations lose about half of
  total demand for symphony, opera, and ballet to
  organizations outside of San Jose (mostly in San
  Francisco).
• Analysis of Demand for Live Classical Music
  Programs in Silicon Valley Audience Insight
  (2002)
  
• Many organizations will regard any new symphonic
  venture as competitive and could work actively
  against its success unless there are incentives
  for them not to do so.
• The Competitive Marketplace for Classical Music
  in Silicon Valley Wolf, Keens Co. March
  (2002)

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• Principle 7
• The new venture must be supported by a viable
  business plan that includes testing of potential
  programs with consumers.

16
Rationale

• Orchestras operate in a highly dynamic
  consumer-marketing environment and compete with
  well-capitalized entertainment conglomerates like
  Disney and Clear Channel for leisure time and
  consumer mind-share.
• Orchestras are constrained by a financial model
  (where) there is little room to experiment no
  R and D capacity, like other industries and
  even less room to fail.
• (Classical Music Consumer Segmentation Study
  Knight Foundation 2002)
  

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• Principle 8
• The new venture must be launched with sufficient
  initial capitalization to succeed and must have
  the support of key community leaders including
  members of its own board.

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Rationale

• The industry-standard goal for capitalization has
  historically been 1 years operating budget in
  reserve plus 3 times operating budget for
  permanent endowment.
• SV might require more depending on the model.
• SV could require less if sweat equity came from
  musicians as is the case in some cities.
  
• Any financial commitment of community leaders
  will be required in advance.
  
• Models Research for Silicon Valley Classical
  Music Initiative Wolf, Keens Co. June 2003

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• Principle 9
• The new venture must not rely on a first-class
  orchestral venue.

20
Rationale

• No first-rate (acoustic and physical conditions)
  halls exist for symphonic music in Silicon
  Valley. AMS facility study January, 2003
  
• The top three most disliked venues in SV are the
  ones currently used for orchestra
  concerts. (Audience Insight On Line Study
  April, 2003)

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• Principle 10
• The new venture must be sensitive to the changing
  realities of classical music in the 21st century
  including the diversity of consumer tastes and
  the increasing use of electronic media and
  technology by classical music consumers.

22
Rationale

• For all classical music participators, preference
  for other genres of music is very high.
  
• Even classical music listeners who never attended
  a SJ Symphony concert own an average of 82
  classical CDs.
  
• More than a third of all listeners to classical
  music experience it several times a week through
  electronic media, even if they do not enter a
  concert hall.
• (Audience Insight On Line Study April, 2003)