In 1824, a performance of Beethoven’s 9th Symphony required over 100 musicians and lasted over an hour. 200 years later, this hasn’t changed.

While industries like finance, information technology, and energy make incredible strides in productivity each year, the same cannot be said for the performing arts. Since an orchestra can’t cut out half its players, and a ballet company cannot expect its dancers to dance twice as fast, their productivity (and hence revenue from ticket sales) remain fairly constant. Yet, wages in the industry are unfazed by static productivity, and increase alongside the broader economy in order to prevent performers from leaving for higher paying jobs elsewhere.

American Economist W.J. Baumol observed that rising costs paired with stagnant revenue is the central economic dilemma of the performing arts. He described this circumstance as ‘Cost Disease,’ since such organizations become increasingly burdened with costs over time.

This shows up clearly today: surging ticket prices, minimal rehearsals, and shortening seasons now define the performing arts climate. We see this in our very own Boston Symphony Orchestra, for which total expenses for the 2023/2024 season exceed $120 million, while concert revenue barely touches $55 million. In the 1950s, income from performances for nearly all performing arts organizations covered roughly two-thirds of costs. Today, it covers only about half.

At first glance, you might expect them to collapse under this constant financial strain: simple economic logic suggests that if revenue cannot keep up with costs, these organizations should downsize or disappear altogether. In reality, the arts are constantly relying on donations, endowments, and special government policies (such as tax exemptions) that make up for the gap between earned income and surging costs. In the case of the BSO, this means an additional $57 million in revenue (4% higher than their revenue from performance).

Still, the performing arts largely operate in deficits. And as concert attendance plummets and halls become increasingly predominated by grey heads, the ticket sales and donations decline. To make up the difference, you might see the organizations such as the New York City Ballet relying on their (often) wealthy audiences by charging up to $400 to see Nutcracker this holiday season.

At the same time, performing arts fall under the category of nonprofits, with a special purpose in society to spread art and make it accessible to all. Finding the balance between contributing to the good of society and trying to cover costs can be tricky. Performing arts organizations, in their aspiration to make art available for all, may choose to sell cheap tickets, and in doing so will go bankrupt very quickly. Alternatively, they might make them expensive and sacrifice their nobler aspirations.

More worryingly, the current US administration has cancelled National Endowment for the Arts (NEA) grants with plans to eliminate the agency, leading to concern of the nation’s commitment to cultural life. An organization which has supported the arts with over 5.5 billion dollars in the last 60 years, its termination could have grave implications on art and culture in the near future.


Works Cited
Baumol, William, and William G. Bowen. Performing Arts: The Economic Dilemma. 1966, https://archivesofthecentury.org/myportfolio/performing-arts-the-economic-dilemma/.
Boston Symphony Orchestra. 2023-2024 Financial Report. https://dgpuo8cwvztoe.cloudfront.net/uploads/PDF-Uploads/DEV_FY24_FinancialHighlights_8.5x11_v2.pdf.
Flanagan, Robert J. “The Economic Environment of American Symphony Orchestras.” REPORT TO ANDREW W. MELLON FOUNDATION, 2008. https://iml.esm.rochester.edu/polyphonic-archive/wp-content/uploads/sites/13/2012/04/Flanagan.pdf.
National Endowment for the Arts. “Impact.” https://www.arts.gov/impact.
Veltman, Chloe. “NEA hit with grant cuts after Trump administration's call for elimination.” NPR, 3 May 2025, https://www.npr.org/2025/05/03/nx-s1-5385888/sweeping-cuts-hit-nea-after-trump-administration-calls-to-eliminate-the-agency.