Arts: Dance for your dinner

Jeff Melanson says the old arts business model is broken. He plans to fix it.

At the Eaton Centre, Toronto’s downtown shopping mega–complex, the 29th of April was a regular business day, except for the dancing. At noon, a group of 300 people in street clothes gathered in one of the building’s multilevel atriums, and as a sound system came alive with a pop hit by Feist and astonished shoppers watched, the staff and students of the National Ballet School of Canada turned the shopping mall into a performance space, announcing International Dance Day in a choreographed whirl.

A public–space ambush performance, the production was a very 21st–century way to celebrate a very old art form. The crowd that day concealed six professional cameramen, filming what was substantially a made–for–the–Internet experiment. Months later, a video of the Eaton Centre flash mob still makes Jeff Melanson smile. He warns that in one brief shot, you can see among the dancers a “really awkward–looking old guy in a suit.” It’s Melanson, the six–foot–six, 37–year–old executive director of the NBS, himself an adult student in the school.

The video’s viewers so far number in the tens of thousands, a modest amount in a world where Lady Gaga has just cracked the one billion mark on YouTube. But it’s enough to satisfy Melanson, for now. He promises that the school will produce more of these videos as it expands its digital media brand. As he sits in the school director’s office, with its dark wallpaper and heavy wooden furniture, he talks easily about profit centres and global markets and disruptive technologies. He hardly fulfils the image of a patrician arts leader. That’s because he isn’t.

This year, Melanson became the first arts executive ever named among Canada’s Top 40 Under 40, the annual list of young movers and shakers in business, government and the non–profit sector. He was recognized not just for his role in turning around the internationally acclaimed school’s finances during his four years at its helm, but as one of the foremost proponents of a more ambitious approach to this country’s arts organizations and their market potential. The old non–profit model of begging for government grants and endless private–sector handouts is no longer a stable or responsible approach, he argues. Instead, Melanson wants the next generation of Canadian artists to know how to start their own dance companies and record labels and galleries. By giving them a business education along with an artistic one, Melanson wants to show students how to repeat the successes of companies like Cirque du Soleil or Arts & Crafts Records. He wants to teach them to be entrepreneurs.

When you’re trained as an artist, you are trained to believe that the arts, in a way, are the antidote to business,” Melanson says one day, after a tour of the award–winning midtown Toronto facility that hosts the ballet school’s 210 professional students and its extensive community programs. “When you work for an opera company or a ballet company, you know what you get paid and that’s about it. You don’t really know how it works. We’re trained with a sense of entitlement: an organization is going to take care of us and pay our salaries. We’re not aware what it costs to run an institution, or how we drive these things forward.” Despite his imposing height and athletic build — not to mention the torrent of ideas that pour out every time he speaks — Melanson’s is an oddly calming presence, his rich baritone even and unhurried. “I’ve seen many examples where phenomenal artists who did not have those skill sets are barely surviving, and so–so artists who understood the business side are thriving financially, and I would hate for the sole differentiating factor to be one’s economic ability. Artists need to understand the economics that underpin their activities.”

Melanson speaks from experience, as both artist and red–ink–stained administrator. In 2006, the National Ballet School’s balance sheets were an ugly sight. Its new home had opened its doors, but despite the board’s careful planning, the school ran a nearly $3–million deficit for the 2005–06 fiscal year, and faced the same for 2006–07. With Robert Sirman moving after a 15–year tenure at the school to head the Canada Council for the Arts, it also needed a new executive director.

As dean of the Royal Conservatory of Music’s Community School, Melanson earned plaudits by expanding its purview into world music, jazz, and hip hop, and broadening the scope of the school’s outreach programs. He had grown up in Winnipeg, a jock who played football and hockey. At a young age, he “self–discovered” an interest in the arts, eventually enrolling for an undergrad degree in music at the University of Winnipeg and training as an opera singer.

After spending a portion of his twenties on the stage, being exposed to the vagaries of the arts business from a performer’s perspective, Melanson went back to school, earning an MBA from Wilfrid Laurier University and moving into administration, first with Opera Ontario and then with the Conservatory, where he attracted the attention of the NBS board.

“First of all, he’s an artist,” says Judith Gelber. The outgoing chair of the school’s board, she also chaired the board’s search committee. “Second of all, he’s an artist who wanted to get into management and leadership and who took the time and went back to school, realizing that would be a necessity in terms of developing arts organizations for the future.”

Melanson quarterbacked the ballet school’s remarkable turnaround. Under his watch, revenues have increased from $13 million to $20 million. The deficit has been erased, the reserve fund that the school raided in its financial dire straits is being replenished, and its endowment has gone from $8 million to $32 million — all in the face of the sternest recession in memory.

The basic model for this country’s arts institutions relied on government funding and fundraising from the private sector, marginally bolstered by actually selling tickets or merchandise or the like. So far, the school has largely increased its revenues the old fashioned way, by improving its approach to those first two revenue streams.

At one time, perhaps, that model seemed stable and sustainable; but partly because of ever–increasing competition for the public dollar, and partly because arts funding has increasingly become a partisan political issue, revenue from government is under constant pressure. Meanwhile, there’s a squeeze on the other side of the balance sheet, as human costs, representing the biggest chunk of most arts organizations’ expenses, rise inexorably every year.

“Government funding might go up, gross, but it’s not going up as a percentage of your total budget,” Melanson says. “Government funding at best as a percentage of total budget is going to stay the same, and at worst it’s probably going to diminish. So the other two categories — earned revenue and fundraising — have got to grow. You’re talking 5% to 9% growth rates, just to keep pace with the expense–side growth. And if you say that to most arts organizations, they’re horrified: the notion of growing at that pace is kind of scary, because we aim at zero every year and it’s the subsistence model. But to really become a more dynamic, more present organization in society, that’s the kind of growth trajectory you’re going to be on, and the only way to be on that growth trajectory is to take aggressive positions.”

This is the kind of thinking in which Melanson was steeped during his years at the Royal Conservatory of Music under president Dr. Peter Simon, a philosophical fellow traveller. “At the conservatory, we are not inclined to just put up our walls and continue to do what we do,” Simon says. “We’re very concerned with shaping society, and you have to create actual means by which you can do that.” Of an annual $40 million budget, the conservatory receives only $2 million from government. To support its array of education and outreach programs, the conservatory has nurtured its profit centres, like its system of music examinations and certifications, which Simon says brings in some $13 million in revenue annually. “I think there’s a growing awareness that if you restrict yourself to [traditional] forms of revenue, you’re pretty vulnerable.” Simon cites the growing trend of “venture philanthropy” that’s emerged south of the border. The New York–based organization Creative Capital is one of the most high–profile American vehicles for this kind of gift, focusing on making artists professionally self–sustaining. To that end, artists received support for specific projects alongside training in areas like fundraising, public relations and marketing. Having distributed more than US$20 million among more than 400 artists in the past decade, Creative Capital has seen the artists it’s invested in establish careers that have netted them Oscars, Emmys, premières on Broadway and openings at the Museum of Modern Art. Simon thinks the model an ideal fit for helping Canadian arts organizations transition away from the ups and downs of government dependency.

The trick is in identifying and cultivating potential profit centres, a task at which the NBS is now hard at work. This fall, the ballet school’s offices are home to a cell of MBA students who have augmented the school’s business development team. There is a cluster of six from Ivey, another from McGill, and one from Melanson’s alma mater, Laurier, all beavering away on mobile and online projects and new product and partnership development. Digital media is a priority, both entertaining, like the Eaton Centre flash mob video, and educational, and to look for ways to monetize it through content–hungry partners. The flash mob represented a trial balloon, an experiment in virality and brand–building. Future videos will be instructional. The Laurier student, Leah Milne — who studied and practised ballet for 18 years — is working to expand the e–commerce component of the Shoe Room, the school’s dance equipment store, through the hundreds of smaller dance studios across the country. “Right now, a lot of the studios sell their own inventory, and it’s not good for the bottom line when that’s just sitting around at your studio,” she says. “They’re interested in getting rid of that inventory and having us handle it, and making whatever amount, 5% or 10% [of the sale].” The popularity of a range of dance forms beyond ballet, driven by the likes of TV’s So You Think You Can Dance?, has the Shoe Room looking at expanding the range of its stock.

The Ivey group, meanwhile, is focusing on international market opportunities. Graduates of the school are currently working in more than 60 dance companies worldwide; just as Canada’s a global leader in training our own artists, Melanson sees no reason why the country can’t also be a global leader in providing arts education and leadership. “There are parts of China where they have built large performance venues that aren’t being used, really, because they don’t know what to put in them, and they don’t have the expertise to run them,” says Melanson. “Culture really is a priority there. And if we can help them spend some of that cash, I’m also happy to do that.” The school is investigating partnerships with mainland Chinese arts institutions, and breaking into the retail marketplace in that country. If it’s strange to think of a Canadian arts group acting like a multinational corporation, Melanson shrugs it off. “I think anyone running an arts organization today who is just looking at the regional market is probably missing the boat.”

Beyond the “aggressive positions” that the ballet school is taking toward its own growth, fundamental to Melanson’s vision is to teach entrepreneurial skills to his students, and beyond. “It started from the idea that students need a complete education,” Gelber says. “Not just academic, not just dance, but how to work in the world of today.

“Twenty years ago when a student graduated, they would think they were going to have a career in a stable company that’s been around for a long time. And that’s just not the way it is today. So, many of our students choose to go it alone. They become part of a startup company, they may become choreographers — there’s any number of routes. They need to understand what being an entrepreneur might be like.”

To this end, the school has begun introducing a business education component into the professional students’ curriculum that Melanson hopes will move toward a case–study model, focusing on the likes of Cirque du Soleil and Arts & Crafts Records. Just over the horizon, he imagines a Centre for Cultural Entrepreneurship, bringing together students from across artistic disciplines to learn the basics of business, and a venture capital pool that brings investors together with artistic enterprises.

It’s a dramatic reimagining of the way the country’s arts sector works. Melanson, though, sees it as a return to first principles. “All the large arts institutions around us today, at some point not that long ago, were founded by very entrepreneurially driven people,” he says. “The people who founded the ballet school, these were entrepreneurs. These were people that were able to bring together an artistic vision with a strong business sensibility. So it’s almost, in a way, recapturing some of that spirit, rather than trying to rely on the legacy of what’s been built.”