Monday, March 29, 2010

Keep the Change (Coming)

Crocuses are stabbing through the winter detritus in our yard. Mud is on the roads. Maple steam is escaping from small rustic buildings dottling the landscape. The Legislature plans to finish by the end of April (wow!).

Change is in the air.

Although I continue to come across artists and administrators who are angry or scared about their current economic condition, by far the majority of them have taken the current crisis as a starting point for exploring how to accomplish their work differently, more efficiently, and/or with greater impact. For example, I have had conversations with cultural representatives from three Vermont communities who are in various stages of consolidating a significant segment of their local cultural efforts to achieve administrative, marketing, and promotional synergies and savings.

This is the kind of change we need.

At our advocacy day on March 17th (huge thanks to all of you who came!) we heard from a variety of people about new ways to capture and use data, or better ways to position Vermont artistic products and services to broaden and deepen Vermont's audience as well as its brand identity.

Again, more change to consider.

Perhaps the most important thing artists and arts administrators could change, however, is how they approach marketing and promotion. In a very quick and totally unscientific, recent sampling of a few Vermont arts organizations I discovered two things: 1) many arts administrators don't really know what percentage of their annual operating budget they allocate to marketing and promotion. They could all form an estimate by calculating the number of events times the rough expenditures on advertising per event, but no one would commit to a firm figure without equivocating; and 2) most administrators having completed the calculation, guesstimated that they spent less than 3% of their total operating expenditures on marketing and promotion.

Here's a new way to look at marketing and promotion. Take an average of your total operating income for the last three years. Multiply that by 10%. There. That's your new budget line-item for marketing and promotion for your organization next year. That's what you are going to spend on a well-considered plan to fill your seats, to engage your audiences in new ways, to invite your legislators to come and speak at your opening night events, to showcase your organization as the center of community life that you know it to be.

"But that's too much! We've never spent more than 2% (it turns out, having now done the math). We need to spend that extra XX thousand dollars on artist fees/travel/dressing the hall/insurance/mindless debates about marketing/etc...."


What if you presented one or two fewer performances and took the money you would have spent up front on artist fees and really developed a marketing and promotional campaign that was designed to fill every seat in the house so full that you had to add an extra show? Wouldn't your board be happy? Wouldn't the artists be happy?

Our state department of Tourism and Marketing (VDTM) has a long history of marketing and promoting the Vermont Brand almost exclusively out of state. They also have a long history of partnering with private-sector partners and splitting the costs of out-of-state promotional campaigns to lure visitors here from Montreal, Boston, Albany (Capital District), New York, and Philadelphia.

We believe this is a huge opportunity to improve our own financial conditions as well as that of Vermont, which is dependent on tourism for 15% of its revenue.

Let's take aim at a realistic goal: let's get our boards to commit to spending 5% on marketing/promotion within the next two years, and 10% within five years. While you are doing that, we (the Arts Council) will:

  • Develop out-of-state marketing campaigns with VDTM that showcase the multiple reasons to visit Vermont for its art (Vermont is a pretty wide open source for great copy!)
  • Develop in-state marketing campaigns with our arts organizations, local chambers of commerce and others to reach not only the large number of Vermonters who only know what's going on in their own communities, but the large number of out-of-state visitors who stay with family and friends.
  • Encourage arts organizations all over the state to join forces with each other and with us and mimic the very successful brand-oriented campaigns that the likes of the Ski Areas Association and Cabot Cheese have done with VDTM.
In addition to many of the other ideas we have put forward at Advocacy Day about information-gathering, accountability, and application-streamlining, putting a new focus on marketing and promotion may be turn out to be the most significant change for the Arts Council in a generation.

Like I said, change is in the air, and these are all big.

Breathe deeply.

Monday, March 15, 2010

The Emerald Mountain State

Even though The Wizard of Oz was not the first color motion picture, it made one heckuva colorful statement. Compared to the browns and grays of the sepia-toned Kansas that Dorothy left behind, Oz’s magic was made palpable by the rich tapestry of color that greeted her as she stepped out to meet the Munchkins for the first time. And oh my, who can forget that first glimpse of the Emerald City off in the distance...?

A few weeks ago the Douglas Administration recommended zeroing out the state's support for the Vermont Film Commission because (according to a well-placed administration official) "Tiger Team Analysis" showed that the "operational footprint of the Commission was negligible."

While some might wish to question the validity of this analysis and its conclusion, I would like to focus instead on why Vermont desperately needs a Film Commission—one that is properly funded and offers incentives to film-makers:

First, someone knowledgeable about film production issues needs to be available to answer the hundreds of inquiries that come into Vermont looking for locations, looking for artisans or trades-people (including writers, actors, sound engineers, costumers, designers, gaffers, best boys, etc.), or looking for on-site or post-production facilities they can use without trekking back and forth to New York or L.A.

Second, someone knowledgeable about film finance needs to be available to the Vermont legislature, the state economist, and the Governor to explain exactly how a film incentive, properly structured, can not only attract major productions to film in our state, but not necessarily cost the state a dime. Even more important, this person could also explain how to build an incredibly lucrative economic sector that has very little negative "footprint" on our proud, environmentally-conscious state.

Third, someone knowledgeable about film and new media needs to be available to link our robust cartoon sector (thank you White River Junction!) to the burgeoning industries of new media, technology, and video-gaming (thank you Marlboro and Champlain College!) which share so many of the same post-production people and technologies with the film industry.

The Administration thinks that someone in the tourism office (VDTM) can answer inquiries from the field. That may be true to a limited degree, but should VDTM's already vastly overworked staff be responsible for servicing a different industry when it is fully engaged in servicing its own? Seems like a too-tall order. Film, television, and media producers don't have a lot of time to spend and will happily hang up the phone and call Connecticut or Massachusetts or Canada if it will save them even five minutes.

As for the Incentives issue, the problem is quite simple. What is it worth to the State of Vermont to have, say, a Steven Spielberg film shot here? Rhode Island, Connecticut, Massachusetts and Canada offer a 25% incentive. Some economists say this is too much.

Only one state has determined that the direct income it receives from a film shoot is 16% of its tax incentive investment, based on a detailed analysis of all the direct salary, meals, sales and use tax revenue streams a production generates. (Thank you, Massachusetts, for doing this incredibly boring but necessary analysis--see page 17 where it says Mass. gets $.16 back on every dollar of tax incentive money it "spends.")

In Massachusetts, thus, a $6 million production shoot with the standard 25% incentive program will result in it"owing" foregone taxes worth $1.5 million, but reaping about $.24 million (.16 x $1.5 million). In this scenario, Massachusetts “loses” $1.26 million.

Or does it?

First of all, what value does Massachusetts place on the employment of all these people and organizations who work the shoot? What would the cost of their "un(der)employment" have been during that same period if the film hadn't been shot? What would have happened if someone from Connecticut had been hired to be a key grip on the shoot because no one knew where all the Massachusetts-based key grips could be found?

Even more important, media moguls are always pointing out the incredible value of "unpaid advertising" that happens when locations in the state are shown around the world on film or on television. (Related to this, did anyone stop to think that maybe the fact that Cider House Rules was shot partly in White River Junction might have something to do with that town's reputation as an art-friendly town--one whose creative economy is more than robust? What is the value the state places on that?)

How valuable would a Spielberg film shot in Vermont be to the long-term health of our state? I have no idea, but it has to be considerable. Heck, people still come to Vermont looking to meet Darryl...or was it his brother...?

As the Film Commission's own materials proclaim proudly:

"Film uses established resources and infrastructure without straining our school systems, highways, and community resources or putting development pressure on our cities and towns. It employs local artisans and local businesses, offering wages that are often higher than average for the state. It promotes the Vermont Brand to broad, worldwide audiences, a factor that contributes to our economy many times over in the form of tourism and related industries. Film, video, and new media are the clean, green industries of the future. The Film Commission's mission is to grow this new and vital industry, creating the kinds of jobs that will be critical to the state's economic success in the 21st Century."

It's not that the Film Commission has a "negligible footprint." It simply has been starved to death these past ten years.

So let’s try this. Let Vermont offer a 15% incentive (1% less than its expected return, based on the Massachusetts data). We might not compete with our neighbors, but we might get some who currently AREN’T coming to Vermont because we offer nothing at all.

If film is going to ever gain more than a sporadic toe-hold in Vermont; if it ever is going to make the effort to connect up to the video-gaming industry, and be at the vanguard of a new media and technology sector; it needs a magician or two right now to pull some levers (Sen. Illuzzi and Rep. Botzow, there is your cue!).

Far from being eliminated, the Film Commission should be empowered to help pull Vermont out of its sepia-toned economic tornado and restore it to its original Emerald-Mountain-State hues.