Every Arts Organization Must Become a Media Company

Erik Gensler: Matías, thank you so much for joining me.

Matías Tarnopolsky: A great pleasure to be here. Thanks for having me, Erik.

Erik Gensler: On March 12th, when cities were really beginning to shut down in the US, you presented a livestream concert of BeethovenNOW that you played to an empty hall and many organizations followed but you all were one of the first movers to do this and you received a ton of press and, I understand, half a million people watched. I’d love to dig into the decisions to do this from an administrative perspective. Moving first in this industry is hard. I understand The Philadelphia Orchestra has a lot of firsts, but I’d love you to talk about how this idea came into being and how you moved quickly to get that live stream up in this crazy moment

Matías Tarnopolsky: On Wednesday, the 11th, that evening—if you can think back to that evening—the country was in a state of utter confusion about what was next. There had been locked downs in other countries. The COVID-19 virus was spreading. The idea of community spread was clear, which meant that was now difficult to trace, sort of, your … the sort of first people who had it here. And so, it was out there and the whole idea of public assembly, which we’d been keeping a very close eye on, was up for grabs. What happened during the course of that evening was, I think, the NBA decided to stop playing and various other things and I was at a meeting in New York that evening—already socially distancing, but not like we are today—and on the journey home, everything changed and we knew that we would have to not perform the next night and for the foreseeable future, at least not in front of the public. The next morning, however, that decision still had not been publicly announced and the guidelines then were, “No gatherings of more than 250 people,” and I sat with our music director, Yannick Nézet-Séguin, and a couple of musicians from the orchestra and we decided that what we can do is play. And even if there’s no audience there, let’s give the concert and we need to record it for radio. We’ll do a live broadcast on the radio and I thought to myself, then, “This is just too important a moment. Let’s try and televise it,” and we managed to get a two-camera crew, at no time, to come in and set up for what was going to be a Facebook Live stream. I also called my colleague at the local PBS station, Bill Marrazzo at WHYY, who realized the import of this moment, immediately, as well, and sent a four-camera crew to record the concert, as well. The moment of transformation was during that conversation, which was in the rehearsal break around noon that day, and we realized we were turning from a classical music-producing organization, you know, creating concerts and education and community programs … we were turning from that to a media organization in the space of a minute. And that totally changed the way we were thinking about everything we were going to do from then on. So, with the help of WHYY, we recorded the concert, put it on our Facebook Live stream that night. So, we had to set up all the infrastructure for Facebook Live, get the word out to our public that there would to be no public concert tonight, but they could join us online. And there we were. Be broadcast that concert live in front of an empty concert hall. It was one of the most moving and momentous musical experiences I’ve been party to, if not the most. It began with a world premiere of a piece by Iman Habibi, called, “Jeder Baum spricht,”which is German for “Every Tree Speaks,” and it was his introduction to Beethoven’s Fifth Symphony and it’s very powerful because there isn’t a break between the two pieces. Iman’s piece finishes and Beethoven starts. They attack it without a break. And so, you have his beautiful music and then suddenly into—almost without noticing, though it’s hard not to notice the start of Beethoven 5, Beethoven’s Fifth Symphony—and then after the intermissions, Beethoven’s Pastoral Symphony and the … I mean, it’s really hard to describe the power of that evening. It was a group of musicians, there, and Yannick, the music director, knowing that they weren’t going to be … this was their last time together for a while. And when the Patoral Symphony finished and there was utter silence in the hall and then the orchestra stood. They were in concert dress—I mean, these were all conscious decisions—in concert dress, the orchestra stood, turned to face the empty house in silence. I mean, the power of that moment really was what this was all about. It’s the silence after the music that lets you understand the import and impact of the music. I realized then, “This is what we have to do and we have to do it more.” And then, there were the comments on the Facebook Live stream, which, you know, the 5,500 people that watched on Facebook Live and then the over … you know, the hundreds of thousands that have watched since. But if you read those comments on Facebook Live, if you have any doubt about the meaning to people of music at this moment, read a sampling of those comments.

Erik Gensler: Thank you for that. It’s really powerful and I can imagine what standing there and experiencing that firsthand must have felt like. I want to talk about this idea that you mentioned that I think is incredibly powerful and it’s the transition to a media company, how arts organizations have to now make that transition. Although, I’ve been saying for years, we should have been making that transition all along. I think every company in the 21st century needs to be a media company and Anthony Tommasini in The New York Times, talking about the livestream that you offered and some other orchestras offered, he said, “And when the immediate crisis passes, we may well have taken a new step in acclimating to the idea that streaming is not just an alternative to the right way of appreciating classical music, but also a viable performance medium in its own right.”

Matías Tarnopolsky: I think Tony Tommasini is absolutely right there and let me say two things. The live concert experience is what we’re all about and the gifts of the online virtual interactive experience are incredibly powerful and there is a level of creativity that has been unleashed because of this moment that we need to celebrate and use it to connect with our hundreds of thousands of fans in Philadelphia and nationally around the world. Millions of fans, actually, millions of fans around the world that we can connect with and be present with and have exchanges with in ways that we never have been able to before. That’s the gift of this moment. We launched the Virtual Philadelphia Orchestra last week and this is what is going to be the vehicle for our immediate future connections with our audiences. You know, we need to do what we do, which is to make music, share music, and the work that we’ve done with the staff, with the musicians of the orchestra since and in the last two weeks is just remarkable in that regard. And the work that you’re seeing from orchestras and ensembles and individual artists around the world, these are all great, great gifts. So I’m, in this regard, excited for the future of our art form because it has propelled the power of online media in a way that was a little slow before. But to Tony Tommasini’s point, he was clearly overwhelmed by the beauty of that concert and it made a big statement. You mentioned before the importance of that we were first. I think, what’s important is that we were there. We were there and it was magnificent. And we were there live as well. You know, the live concert experience on Facebook Live and on our website was so important and there was a viscerality to it. And that is captured on the on-demand stream that lives on our website, still, so …

Erik Gensler: Yeah, it’s this fascinating time. I mean, just looking back at the history of The Philadelphia Orchestra in preparing for this interview, I believe The Philadelphia orchestra was founded in 1900, so you really were founded and lived through the 20th century. And I think this crisis we are in right now is the defining moment of the 21st century and I think our arts institutions and so many types of institutions are just being forced to let go of so many of the things we brought along and rethink how we can reinvent ourselves into the 21st century and it’s a crisis and an opportunity. And I’m curious how you think about, sort of, that balance between holding onto what makes going to an arts experience great and the very real challenges of having to let a lot of things go in order to move forward.

Matías Tarnopolsky: We need to focus on activities and ideas that bring us together. Music gives voice to thoughts and ideas that words alone cannot. It’s a shared experience. Music, making music, experiencing music is a shared experience. It’s a democratizing, equalizing experience. We need to hang onto those essential values as we plan for the future of our organizations and our businesses. And if you keep those values as core, then the other things begin to fall into place. You know, how do you translate that into the, sort of, granularity, more, of keeping thinking six months from now, when we’re hopefully back performing and things are more back to normal. The decisions we take today can make this a slope to a changed business and that’s what we’re doing on an everyday basis. We immediately created the Virtual Philadelphia Orchestra in that, sort of, one-minute moment when we realized we’re turning into a media organization for the foreseeable future and well beyond, I hope, as well. And that gave us, the musicians, board, staff, something to hang onto and this is what we’re going to do. And so, you know, our artistic department is planning the Virtual Philadelphia Orchestra the way that they’d have planned concerts. Yannick is the artistic oversight as Music Director. The musicians of the orchestra are coming up with sensational ideas for video chamber music, for continuing to deliver our education and community programs, but in an online way. In a strange way, the organization actually continues, but in this virtual space and there’s creativity being unleashed. How do we take this moment to motivate philanthropy if we’re not selling tickets? How can we use the Virtual Philadelphia Orchestra to … as a pillar of our business, maybe not immediately, but in the medium- and the long-term to generate revenues? What are the best models out there? All these things on the revenue side of the business can be very powerful. We launched our 20-21 season on Tuesday, March 24th, and our sales for that day with 30% ahead of the sales for our first day of season launch last year. It’s a season that’s about the future. It’s called, “Our World Now.” It’s about humans’ interaction with technology, about the role of women on the stages of classical music. It’s about identity and it’s about the natural world and we have programming that really is designed to engage our audiences and, sort of, have us all think a little differently about how we engage with the world around us. It’s a really powerful statement and, of course, full of beautiful music and all the things we need to do. But we said we have to continue. We have to look ahead. We need beacons for the future. Our conversations with our musicians, board, and staff have not been around a sense of panic and apprehension about the future, but we have a present to hang onto with the Virtual Philadelphia Orchestra and a future with the new season and so we can respond rather than react to the present situation. We are making some incredibly difficult decisions and painful decisions because, at the same time as we’re looking to drive philanthropic revenues and any earned revenues we can do in this situation, we also need to cut expenses. You cannot be in a situation where you’re cash-poor. When you run short of cash, then every decision becomes about cashflow and we cannot afford to be in that situation. We have taken significant steps to reduce the outgoing of cash, which has not been easy.

Erik Gensler: That’s really inspirational to hear that you’re focusing everyone’s efforts on the virtual orchestra and also that the season on-sale was 30% up. I think if we can stay focused on what the recovery … you know, obviously focusing on what we can do now, but then I think there is going to be this tremendous surge and desire for people to gather and celebrate and come together in such a meaningful way. And that that 30% year-over-year growth gives me a lot of hope.

Matías Tarnopolsky: Well that’s on one day, but yes, I mean, let’s hope it’s a harbinger for the future, but that was just day one. But you know, celebrate every bit of good news you can do. You know, we go back to the comments on the Facebook Live stream. You need to hang onto these things. You know, who knows what tomorrow is to bring? Things are changing so fast and so, we really do celebrate the bits of good news as they come in. Very important to do that.

Erik Gensler: So, I don’t know if you’re familiar with SMU Data Arts. They do research studies on the field and they did a study called the “Bottom Line Study,” where they looked at, essentially, earned income and costs and found that, on average, orchestras have only 14 days of working capital because of the, just, high costs to maintain an orchestra. The average arts institution, more broadly, has two months of working capital. So, the orchestras were among the most financially fragile of arts institutions. And I’m curious, how are orchestras going to survive this?

Matías Tarnopolsky: It’s going to be very difficult. Many of us are in preservation mindset for the future. So, for many organizations, it’s going to be very difficult. They, we, will survive by making the kind of decisions today that will allow us to be able to thrive in the future. The Philadelphia Orchestra’s cash situation isn’t the way you just described it. You know, we have a longer runway than that, but we’re taking immediate measures to make it as long as possible. And that’s what all, certainly, the colleagues I’ve talked to, are involved with. You know, it’s the burn rate of cash that you need to be aware of and what assets that you have that are liquid enough that if you need, that are liquid or can be liquidated quickly enough? What expenses can you reduce or stop right away in order to preserve the long-term viability of the business? At the same time, come up with ideas to stay in front of your people, communicate meaningfully, personally, and solicit the ideas from everybody within the organization and around the organization. But getting into a situation of low cash flow is … it’s very hard to think about anything else. So, avoid that if possible. But that was a sobering statistic you shared. I wasn’t aware of it.

Erik Gensler: Yeah, it’s amazing research they have. And then, I think the other category that was … you know, it’s challenging because a lot of the organizations, when you look at earned income minus expenses, it is sort of right on the margin of zero. And then, it gets even really tricky for organizations that have a lot of assets that depreciate. So, it’s also very tricky for museums because the depreciation expense put puts a lot of them into the red, so …

Matías Tarnopolsky: We need to ask questions about our society at large. I mean, what you describe in the cultural sector is true in most of the American economy and when you see millions of people laid off, all of a sudden, businesses shuttering, so much of the economy is geared this way. And so, Philadelphia Orchestra, we have limited cash reserve, which meant that we didn’t just fall off a cliff here, but look how much of the country doesn’t have any cushion. And then, suddenly, people are … their lives are upended. I mean, beyond just the crisis, right? They … not only do they not have a place to go to work, they no longer have their paychecks. I mean, these are monumental changes for individuals, for families. These are traumatic events, right? So, we need to be asking much larger questions of our societies. And it’s happening … it’s happening everywhere. It’s happening to people you know, people you know well, and there’s something really not right about that, that so much of … so many institutions in the country, are institutions and businesses—I mean, when I talk about an institution, I mean small businesses, too—are in a situation where they’re so vulnerable that, you know, within days of this shock they had to shutter.

Erik Gensler: I mean, we’re teetering on the edge. I own a small business and we don’t have the cash reserves like a big business and the big businesses will be fine. And the big businesses … and I like how you’re talking about the bigger societal questions, where so much of the economy is living on the edge and that is dictated by legislation and it does make us ask these big, ethical questions around the priorities of our world and the priorities of humanity, that so many people and organizations are teetering on the edge. I hope this is a moment for some mass reinvention.

Matías Tarnopolsky: I think it’s essential because I think we shouldn’t be accepting a society where there’s so much suffering around so many people, even before this crisis. Let’s not forget that. Okay, let’s not forget the questions of societal inequality. Let’s not forget the questions of distribution of wealth, et cetera. I’m not espousing a political point of view, here; this is values, right?

Erik Gensler: Sure.

Matías Tarnopolsky: This is about values and it is really important that we have a reckoning in the United States about this and if this crisis can not only help us have a reckoning, but also become a society where more of the vulnerable can be protected in a normal situation and in a crisis, then we will be better for it. Protecting institutions of art and culture and education is fundamental to that.

Erik Gensler: So, we’re in this new reality of working remotely and I know for a lot of arts institutions that don’t typically have a ton of experience with remote work … what that experience was like. How did you handle that? How did you go from a completely in-person workforce to one working remotely? What has been the challenges and what have you learned?

Matías Tarnopolsky: Well, we all switched to Zoom platform and Microsoft Teams. I mean, we were using Microsoft Teams in the office before and then, the video conferencing platform we’re using is Zoom. It’s been remarkable, actually. I mean, the … It’s also the most intense possible time. And so, the nice side of it is that, you know, you’ll be having a meeting with somebody or a group of people and somebody cat will just jump in front of the computer-

Erik Gensler: (laughs) Yeah!

Matías Tarnopolsky: … which is always very cute. Look, people have adapted very quickly. We’ve got a job to do. You’re missing some of the nuance of in-person communication, but there’s also an efficiency to it and, for us, it’s working very well. There’s a little bit of adjustment, but we’re getting things done. We’re blasting through an awful lot of information and an awful lot of work and in short order. And we don’t have telephone calls anymore. We have Zoom calls, so …

Erik Gensler: So, are you wearing sweatpants?

Matías Tarnopolsky: Actually, no. I’m wearing … I’m wearing actual pants today.

Erik Gensler: (laughs)

Matías Tarnopolsky: But the funny thing was yesterday was our on-sale and our VP of Marketing, Charlie Wade, showed up on our 9:30—we have a daily senior leadership call, which used to be a weekly thing, it’s now daily—Zoom call and he showed up in a tux, so …

Erik Gensler: (laughs) I’m office on the top, casual below, so … (laughs)

Matías Tarnopolsky: Oh, right. Yeah, no, I’m wearing a fleecy on top, jeans below, so …

Erik Gensler: One of the things we talk about a lot on the podcast is leadership and personal development. The responsibilities of leading an organization of your size are huge, so I’d love for our listeners just to hear you talk about your personal development as a leader. I wonder, as a leader, what do you think you’re really good at and, on the other side, what is something you’re working on?

Matías Tarnopolsky: That whole question is a podcast in and of itself (laughs).

Erik Gensler: (laughs) Oh, for sure.

Matías Tarnopolsky: Look, what we’re doing now is a team effort, right? None of us can do any of this alone and what’s getting me and others through this really searing crisis is the fact that we are working together as a team on the senior leadership level, but also collectively, throughout the whole organization, the board and the musicians. And that is the most important thing at this moment. Leadership is about knowing that you’re learning every day and that you’re contributing every day and hoping that those things are in equal balance. And at different phases in your life and development, sometimes, you’ll be learning more and contributing less. Other times you’ll be contributing more and learning less. You know, understanding that at this moment many people are really in a lot of pain and experiencing uncertainty and anxiety, right? Anxiety that doesn’t go away is really important. Understanding that you’re also in that space, as well, is really important and being very empathetic to friends and colleagues. So, the need to communicate now in, sort of, very sincere ways is very, very important. And then, keeping an eye on the future, keep the ideas coming. I mean, it’s very easy to close down. It’s very easy just to become what you’re hearing in the world and don’t. I mean, look at your own situation, if you can. Give yourself that sort of space to do so because you may need to make different decisions to your peer institutions and colleagues. So, if you can find a way of getting into a responsive space rather than a reactive space, if you can find a way of delving into a generative way of thinking, creative way of thinking, that’s what’s going to get you through because you all have to be advocates for the future. You will have to be responsible for imagining the very best we are organization. So, look, it’s really hard to know what I’m good or not good at right now. Maybe, looking back it’ll be easier. I can tell you that throughout the leadership roles I’ve had, I’ve really drawn on every moment good and bad in the last two weeks to really help my colleagues, the organization, allow myself to be helped, as well, but also to give a sense of a future.

Erik Gensler: Absolutely. I’m going to ask you your final question, which is what we call your “CI to Eye moment,” and the question is, if you can broadcast to the executive directors, leadership teams, staff, and boards of thousands of arts organizations, what advice can you provide right now to help them through this incredibly challenging time?

Matías Tarnopolsky: So, no pressure in that question.

Erik Gensler: (laughing) None.

Matías Tarnopolsky: (laughs) The most important day is tomorrow and the day after. This is a marathon, not a sprint, and make the decisions that you need to make for your organization and your people based on the priorities that you, your boards, your colleagues, your audiences have articulated. Keep the music alive. Think about the people that you touch through the work that you do. Your audiences locally, nationally, internationally, stay in touch with them. Communicate frequently and sincerely.

Erik Gensler: That’s wonderful. Thank you so, so much.

Matías Tarnopolsky: Thanks for having me, Erik.