AADM Y535 – Arts Administration and the Cultural Sector

Fall 2009

Instructor: Michael Rushton

Office: SPEA 201A
Office hours: Tues. & Thurs. 9:30 – 11:00 or by appointment or if my door is open.
Email: mirushto@indiana.edu

Course Description

In this introductory course to the Arts Administration program we will study the market
environment in which arts administrators work, in particular looking at the relationships,
formal and informal, between artists, ‘humdrum’ workers, administrators, and consumers.
From small art galleries to major feature films, arts administrators face the task of
coordinating the work of creative talent and other professionals to bring the work to the
consumer, and we will examine how this coordination is carried out.

Of course, administrators in the newsprint or shipping industries also need to work with
complex relationships, and so we will want to consider the many ways in which the arts,
in all their variety, are different from other sectors, and the implications of these
differences for how works of art are produced and brought to market.

Readings

There is no text to purchase for this course. In the past I have relied upon Richard E.
Caves, Creative Industries: Contracts Between Art and Commerce (Harvard University
Press, 2000), and so there are many used copies of it around – it remains a very
interesting text, and worth browsing on the various topics we cover. But it is not required.

Each week I will post some lecture notes on OnCourse, and there are typically additional
readings. In the outline below, links are provided, except for cases where the reading is a
journal article for which IU has an online subscription. You access those articles as
follows:

Go to the IU homepage, then:

• Click “Libraries”
• Click “Resource Gateway”
• Click “Online Full-Text Journals”
• Type the “Journal Title” in the space provided, and click “Search”
• Often a few possible links are given – choose one that includes the year you are
looking for.
If you have any troubles, let me know!
 Schedule and Readings

This is the plan, although amendments are possible due to unforeseen events, interesting
topics that become especially newsworthy, new publications, etc.

Sept. 4: Some very useful economics: supply and demand and setting prices.

MR, “September 4 notes” [On OnCourse].

Sept. 11: Some more very useful economics: costs and rents.

MR, “September 11 notes” [On OnCourse].

Cost disease in the arts:

In Agatha Christie's autobiography, she mentioned how she never thought she would ever
be wealthy enough to own a car - nor so poor that she wouldn't have servants...

W. J. Baumol and W. G. Bowen, ‘On the performing arts: the anatomy of their economic
problems’ American Economic Review, Papers and Proceedings 55(1/2) (1965):
495-502.

William J. Baumol, ‘Children of Performing Arts, The Economic Dilemma: The climbing
costs of health care and education’ Journal of Cultural Economics 20(3) (1996):
183-206.

Tyler Cowen, ‘Why I do not believe in cost disease’ Journal of Cultural Economics 20(3)
(1996): 207-214.

Sept. 18: What makes the cultural sector different?

Richard E. Caves, Creative Industries (Harvard University Press, 2000), “Introduction:

economic properties of creative activities” [OnCourse] (A fascinating book on
contracts and organization in the arts and entertainment – worth buying a copy
(there are lots of used ones around)).

Sept. 25: Nonprofit firms in the arts

Why nonprofits?

Henry B. Hansmann, “The role of nonprofit enterprise” Yale Law Journal 89(5) (April
1980): 835-901. [note this is online in the JSTOR Arts and Sciences IV
Collection].
Paul DiMaggio, “Nonprofit organizations and the intersectoral division of labor in the
arts” in Walter W. Powell and Richard Steinberg (eds.) The Nonprofit Sector: A
Research Handbook, 2nd edition (Yale University Press).
[http://www.princeton.edu/~artspol/workpap/WP30-DiMaggio.pdf].

How do we measure success in nonprofits?

Steven Kerr, “On the Folly of Rewarding A, While Hoping for B” Academy of
Management Journal 18(4) (1975): 769-783.

Stephen E. Weil, “Performance indicators for museums: progress report from

Wintergreen” Journal of Arts Management, Law & Society 23(4) (Winter 1994):
341-51.

Robert S. Kaplan, “Strategic performance measurement and management in nonprofit

organizations” Nonprofit Management and Leadership 11(3) (Spring 2001): 353-
370.

Larry Weinstein and David Bukovinsky, “Use of the balanced scorecard and performance
metrics to achieve operational and strategic alignment in arts and culture not-for-
profits” International Journal of Arts Management 11(2) (Winter 2009): 42-55.

Nonprofit pricing:

Richard Steinberg and Burton A. Weisbrod, “Pricing and rationing by nonprofit

organizations with distributional objectives” In B. Weisbrod (ed.) To Profit or Not
to Profit (Cambridge University Press, 1998). [OnCourse].

Dennis R. Young and Taehyun Jung, “Mission-market tensions and nonprofit pricing”
Andrew Young School of Policy Studies, Georgia State University, Working
Paper 08-03 (2008). [Free download here:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1083806].

Oct. 2: Class does not meet – Arts Administration Symposium (details to follow).

Oct. 9: Arts consumers

The state of high art consumption:

National Endowment for the Arts, Arts Participation 2008: Highlights from a National
Survey (2009) [http://www.nea.gov/research/NEA-SPPA-brochure.pdf].

Where do arts consumers come from?

Richard A. Peterson, “Changing arts audiences: Capitalizing on omnivorousness”
Cultural Policy Center, University of Chicago, Workshop Paper:
http://culturalpolicy.uchicago.edu/pdfs/peterson1005.pdf

François Colbert, “Entrepreneurship and leadership in marketing the arts” International

Journal of Arts Management 6(1) (Fall 2003): 30-39.

Tak Wing Chan and John H. Goldthorpe, “The social stratification of cultural
consumption: Some policy implications of a research project” Cultural Trends
16(4) (December 2007): 373-384.

Will free tickets help?

The Times (London) “Boys and girls come out to plays” (December 1, 2008)
[http://entertainment.timesonline.co.uk/tol/arts_and_entertainment/stage/theatre/article52
52870.ece].

New York Times “Pondering free access to French museums” (July 19, 2007)
[http://www.nytimes.com/2007/07/18/arts/18iht-museums.1.6714068.html?_r=1].

Oct. 16: The lives of artists: careers and earnings.

National Endowment for the Arts “Artists in the Workforce 1990-2005” Report #48.
Executive Summary
[http://www.arts.gov/research/ArtistsInWorkforce_ExecSum.pdf].

National endowment for the Arts, “Artists in a year of recession: Impact on jobs in 2008”
(2009): [http://www.nea.gov/research/Notes/97.pdf].

Women in the arts:

Cowen, Tyler “Why women succeed, and fail, in the arts” Journal of Cultural Economics
20(2) (1996): 93-113.

Claudia Goldin and Cecilia Rouse “Orchestrating Impartiality: The Impact of "Blind"
Auditions on Female Musicians” American Economic Review 90(4) (September
2000): 715-41.

Oct. 23 & 30: Visual arts: artists, galleries, collectors, auctions, museums.

In general:

Kevin F. McCarthy et al, A Portrait of the Visual Arts (RAND, 2005)

[http://www.rand.org/pubs/monographs/2005/RAND_MG290.pdf].

Auctions:
Orley Ashenfelter and Kathryn Graddy “Auctions and the Price of Art” Journal of
Economic Literature 41(3) (September 2003): 763-787.

Sarah Thornton, Seven Days in the Art World (Norton, 2008): Chapter 1, “The Auction”
[OnCourse] (The book is worth buying; a very informative tour of the world of
visual art).

Museums:

Victoria D. Alexander, “Pictures at an exhibition: Conflicting pressures in museums and

the display of art” American Journal of Sociology 101(4) (January 1996): 797-
839.

Helmut K. Anheier and Stefan Toepler, “Commerce and the muse: Are art museums
becoming commercial?” in Burton A. Weisbrod (ed.) To Profit or Not to Profit
(Cambridge University Press, 1998) [OnCourse].

Museums and the Public Trust:

Roberta Smith, “Memo to art museums: Don’t give up on art” New York Times
(December 3, 2000).

Michael Kimmelman, “Museums in a quandary: where are the ideals?” New York Times
(August 26, 2001).

Glenn D. Lowry, “A deontological approach to art museums and the public trust” in
James Cuno (ed.) Whose Muse? Art Museums and the Public Trust (Princeton
University Press, 2004) [OnCourse] (A must-buy for students thinking of a career
in the museum world).

Museum pricing:

Ben Cowell, “Measuring the impact of free admission” Cultural Trends 16(3) (September
2007): 203-224.

David Maddison and Terry Foster, “Valuing congestion costs in the British Museum”
Oxford Economic Papers 55 (2003): 173-190. (Don’t worry about when the math
gets heavy-going…).

Tyler Green, “Cezanne may be great, but who can afford him?” Philadelphia Inquirer
(April 21, 2009):
[http://www.philly.com/inquirer/opinion/20090421_Cezanne_may_be_great__but_who_
can_afford_him_.html].
MR, “Are museums too expensive?” [http://mirushto.blogspot.com/2009/04/are-
museums-too-expensive.html], and “Just buy a membership”
[http://mirushto.blogspot.com/2009/05/just-buy-membership.html].

Nov. 6: Publishing and recorded music.

Publishing: The changing world

Shira Ross, ‘The greatest mystery: making a best seller’ New York Times May 13, 2007.
[http://www.nytimes.com/2007/05/13/business/yourmoney/13book.html?_r=2&or
ef=slogin].

Holt Uncensored: http://www.holtuncensored.com/hu/three-things-id-like-to-see-3/ and

http://www.holtuncensored.com/hu/an-editor-responds/.

Reuters, “Borders to drop ‘sale or return’ for HarperStudio Books” (Dec. 16, 2008):
http://www.reuters.com/article/rbssTechMediaTelecomNews/idUSBNG35703020
081216.

Wall Street Journal, “Blockbuster or Bust” (January 3, 2009)

[http://online.wsj.com/article/SB123093737793850127.html].

New York Times, “A new world: scheduling e-books” (July 14, 2009)
[http://www.nytimes.com/2009/07/15/books/15ebooks.html?_r=1&ref=arts].

Jack Shafer, “Does the book industry want to get Napstered?” Slate (July 15, 2009):
[http://www.slate.com/id/2222941/].

Classical music:

Bill Stensrud: http://businessofclassicalmusic.blogspot.com/2008/12/classical-music-

after-cd.html.

Popular music:

Elijah Wald, “Mitch Miller’s part in pop history” Financial Times (August 21, 2009)
[http://www.ft.com/cms/s/2/eeca345e-8de1-11de-93df-00144feabdc0.html].

A long tail?

Anderson, Chris “The long tail” Wired 12.10 (2004)

[http://www.wired.com/wired/archive/12.10/tail.html].
Duncan J. Watts, ‘Is Justin Timberlake a product of cumulative advantage?’ New York
Times April 15, 2007.
[http://www.nytimes.com/2007/04/15/magazine/15wwlnidealab.t.html].

Whimsley, “Online monoculture and the end of the niche” (March 15, 2009)
[http://whimsley.typepad.com/whimsley/2009/03/online-monoculture-and-the-
end-of-the-niche.html].

Nov. 13: Live performance.

The state-of-play:

Kevin F. McCarthy et al, The Performing Arts in a New Era (RAND, 2001)
[http://www.rand.org/pubs/monograph_reports/2007/MR1367.pdf].

Robert J. Flanagan, “The economic environment of American symphony orchestras”

Stanford University (2008)
[http://www.gsb.stanford.edu/news/packages/pdf/Flanagan.pdf].

Greg Sandow, “Why ticket sales matter” (July 13, 2009)

[http://www.artsjournal.com/sandow/2009/07/why_ticket_sales_matter.html].

Philippe Ravanas, “Hitting a high note: The Chicago Symphony Orchestra reverses a
decade of decline with new programs, new services and new prices” International
Journal of Arts Management 10(2) (Winter 2008): 68-87.

Why have tickets prices for star performers risen so fast?

Alan B. Krueger, “The economics of real superstars: the market for rock concerts in the
material world” Princeton University (2004)
[http://www.irs.princeton.edu/pubs/pdfs/484.pdf].

The changing contractual structure:

Robert Sandall, ‘Off the record’ Prospect, issue 137, August 2007. [link].

‘A change of tune’ The Economist, July 5, 2007. [link].

Jeff Leeds, ‘The new deal; band as brand’ New York Times, November 11, 2007. [link].

Ticket re-sale:

Pascal Courty, “Some economics of ticket re-sale” Journal of Economic Perspectives

17(2) (Spring 2003): 85-97.
Offsetting Behavior, “Economics of scalping: Trent Reznor edition” (March 18, 2009):
[http://offsettingbehaviour.blogspot.com/2009/03/economics-of-scalping-trent-
reznor.html].

Seabrook, John. "The Price of the Ticket." The New Yorker. (10 Aug. 2009): p34
[http://go.galegroup.com/ps/i.do?action=interpret&id=GALE%7CA206012708&v=2.1&
u=iuclassb&it=r&p=LitRC&sw=w&authCount=1].

Nov. 20: Film

Edward Jay Epstein, The Big Picture: The New Logic of Money and Power in Hollywood
(Random House, 2005). You can read the prologue, which captures the
differences between the studio system and contemporary Hollywood here:
[http://www.edwardjayepstein.com/prologue.htm]. [Note there are four parts to
the prologue].

Arthur DeVany, “The movies” in Victor A. Ginsburgh and David Throsby (eds.)
Handbook of the Economics of Arts and Culture (North-Holland, 2006): 615-665
[OnCourse].

Dec. 4: On Strategy

Michael E. Porter, “How competitive forces shape strategy” Harvard Business Review
(March/April 1979): 137-145.

Dec. 11: What now?

Chris Anderson, “Free: Why $0.00 is the future of business’ Wired (February 25, 2008):
[http://www.wired.com/techbiz/it/magazine/16-03/ff_free?currentPage=all].

McKinsey Quarterly, “Interview with Hal Varian” (January 2009)

[http://www.mckinseyquarterly.com/Hal_Varian_on_how_the_Web_challenges_
managers_2286].

Tyler Cowen, “Why everything has changed: the recent revolution in cultural economics”
Journal of Cultural Economics 32(4) (2008): 261-74.

December 14 (Monday) 8:00 – 10:00 a.m. Final Exam

Evaluation

There will be five, short written assignments, each worth 15% of the final grade, and a
final exam worth 25% of the final grade.

The grading scale is as follows:

97-100% = A+ 87-89% = B+ 77-79% = C+ 67-69% = D+
93-96% = A 83-86% = B 73-76% = C 63-66% = D
90-92% = A- 80-82% = B- 70-72% = C- 60-62% = D-
Below 60% = F

SPEA Academic Policies - Academic Dishonesty

SPEA faculty do not tolerate cheating, plagiarism, or any other form of academic
dishonesty. If you have not done so, you should read the IUB Code of Student Rights,
Responsibilities, and Conduct, which can be accessed at http://dsa.indiana.edu/Code/ so
you will be sure to understand what these terms mean and what penalties can be issued
for academic dishonesty. Academic dishonesty can result in a grade of F for the class (an
F for academic dishonesty cannot be removed from the transcript). Significant violations
of the Code can result in expulsion from the University.

Plagiarism is using another person's words, ideas, artistic creations, or other intellectual
property without giving proper credit. According to the Code of Student Rights,
Responsibilities, and Conduct, a student must give credit to the work of another person
when he does any of the following:

a. Quotes another person's actual words, either oral or written;

b. Paraphrases another person's words, either oral or written;
c. Uses another person's idea, opinion, or theory; or
d. Borrows facts, statistics, or other illustrative material, unless the information is
common knowledge.

AMERICANS WITH DISABLITIES ACT STATEMENT:

I will make accommodations for students registered with Adaptive Educational Services
(AES) on the Indianapolis campus (Phone: 317-274-3241 or e-mail AES@iupui.edu) or
the Disability Services for Students Office in Franklin Hall on the Bloomington campus
(Phone: 812-855-7578).