Both the Sydney Symphony Orchestra and the Melbourne Symphony Orchestra have posted unexpectedly healthy surpluses, their 2020 annual reports show. The pair of positive reports come as something of a surprise, given the enormous issues faced by arts organisations throughout the COVID-19 pandemic in 2020. Due to the pandemic, both organisations had severely curtailed their live performances, and hence much of their incoming revenue, for the majority of 2020. The SSO posted a $7.8 million surplus, and the MSO $1.5 million, both significantly larger than previous years.
Chief Conductor Designate Simone Young conducts the Sydney Symphony Orchestra in February 2021. Photograph © Nic Walker
In April last year, MSO made the decision to “hibernate” its musicians. While the orchestra had had several years of surplus, MSO Managing Director Sophie Galaise said at the time that “. . . we don’t have enormous reserves so we are not in the position to sustain [the orchestra] without any earned revenues coming in for a long time”. Likewise, last May the SSO also negotiated salaries and working arrangements with both musicians and administration staff, amid predictions of dire potential revenue losses of up to $25 million by the end of 2021.
The surprising financial success of both organisations in a challenging year comes from a number of factors. A swift pivot to online performances attracted eager audiences; MSO’s chairman Michael Ullmer notes that they had “closed the year having delivered only 18 live performances (versus 172 the previous year), yet reached more than 2.8 million people in 56 countries through our Keep the Music Going program of online concerts and events”. While the MSO saw a handful of increases to the number of their followers on social media platforms (such as Facebook and Twitter) from 2019, their YouTube subscribers increased by a remarkable 1,124% to a total of 16,706, confirming the substantial impact of their rapid shift to streamed performances. Ullmer summarises by stating that for the MSO, 2020 allowed the acceleration of their digital strategy; their recently launched MSO.LIVE service offers audiences streamable recordings of performances on-demand.
Likewise, the SSO’s 2020 Impact Report gives an average of 18,000 online viewers of their digital recordings each month and an average of 1.8 million viewers each month, incorporating their Sydney Symphony at Home performances, collaborations with the Sydney Dance Company, and performances of new music by contemporary Australian composers. For the SSO in particular, the shift to online performance would come as some relief – while the Sydney Opera House Concert Hall is being renovated, SSO performances were intended to be held in the smaller Sydney Town Hall, but each performance given in the Town Hall loses money due to smaller audience numbers. Lowered costs of performance make a considerable difference, as well; the SSO’s chairman Terrey Arcus pointed out that while they had a 92% decline in revenue from live performance (from $19.5 million to $1.6 million), this was “partially offset by a 73% reduction in direct performance costs from $15.1m to $4.1m”. Emma Dunch, the CEO of the SSO, says that they are considering the future of digital streaming carefully, but also notes the necessity of fundraising or corporate partnership to maintain a high level of quality in the content produced. She concludes by stating that “this year we know that audiences want to return to the live concert hall experience and that’s the Sydney Symphony’s immediate priority. Later this year we will devise digital content to serve the educational market”.
Both orchestras also highlight the Australian Government’s assistance as being especially helpful. The SSO received $4.8 million in COVID-19 and JobKeeper subsidies, allowing them to “preserve the Orchestra intact and support our musicians and administrators”, albeit, they state, “on reduced compensation”. Arcus states that, by having JobKeeper available, “we avoided adding to job losses in the cultural sector and remained poised to resume operations as soon as restrictions were lifted”. Ullmer describes JobKeeper as being “a welcome relief” for the MSO, which likewise received more than $5 million in subsidies, also necessitating the reduction of both salaries and hours worked.
Both organisations were the recipients of generous donations from patrons. Ullmer states that the MSO “took a whole of organisation approach to fundraising efforts, with musicians and staff working together to re-engage past donors and sustain crucial partnerships”. For the MSO, these donations and partnerships came to a total of nearly $4.3 million in 2020, although this was a fall from a total of $6.8 million in 2019. Arcus likewise states that the SSO is “deeply grateful to the thousands of patrons who purchased subscriptions for our 2020 Sydney Town Hall season and then generously donated these back to us in our hour of need”. The SSO also received $3 million in bequests, a 57% increase from previous years.
While these financial results are certainly a positive step forward, both orchestras are operating with an eye towards the future; independent auditor Ernst and Young commented on the MSO’s report by stating that “the Company continues to face operational challenges in 2021, including limited sellable capacity due to ongoing health restrictions, postponement of concerts on short notice, and increased travel related costs due to travel restrictions”. The SSO’s Terrey Arcus also struck a cautious note, stating that “[SSO’s] 2022 expectations for returning to the Concert Hall are modest and we anticipate that it will take some time to rebuild our audiences to their previous levels”.
For both the MSO and the SSO, the challenge of running a large-scale arts organisation during a global pandemic has required careful thought, flexibility, and tenacity to ensure that these important cultural institutions are kept afloat. While their current financial situation is positive, theirs is a precarious position. Dunch concludes that, for the SSO, “the financial journey to 2022 will be complex. It’s a very uncertain environment and we are also managing the considerable costs associated with the Orchestra’s displacement from the Sydney Opera House. We’re working with the government and other stakeholders to contain the continuing impact on the Orchestra before entering into a period of financial recovery, commencing with our return to the Sydney Opera House”.