© Cameron Slater
The National Theatre has released a major research report titled “Scene Change: Optimising business model innovation in the performing arts.”
The nine-month project, commissioned by the National Theatre and delivered in partnership with the Intelligence Agency and Erskine Analysis, explores how new approaches to traditional business models can enhance the economic and social value of performing arts companies in the UK. It highlighted the vital role of the arts in the economy, saying that the sector turns over £4.38bn and produces an annual GVA (gross value added) of £2.26bn.
The study, which involved over 140 UK arts organisations, found that current business models in the non-profit performing arts sector are no longer viable, with many organisations struggling to survive post-pandemic.
Within the report, the National Theatre’s executive director Kate Varah said: “Many I speak to in the sector feel they are now at a breaking point with limited funds and conflicting demands. Non-profit and for-profit organisations, are responding to the need for social impact programmes which contribute to education, wellbeing and placemaking – but this is supported by limited, patchwork funding. At the same time, they are being asked to find new revenue streams to stimulate national economic growth with reduced core funding and no central, annual capital maintenance fund. Many I speak to in the sector feel they are now at a breaking point with limited funds and conflicting demands.”
The report identifies five prevailing business models in the sector and offers tailored recommendations to address the challenges faced by performing arts organisations. These include boosting technological capacity, creating cost-saving and revenue-generating playbooks, supporting a match fund for sustainability and decarbonisation, and establishing a board bank of experts to assist with tech and financial expertise. Additionally, the report calls on policymakers to save vital cultural infrastructure, introduce an Arts Business Model Innovation Fund, and develop cash flow finance solutions to stabilise finances.
Damon Buffini, chair of the National Theatre board, highlighted the fact that the National Theatre’s business model is “complex”, adding “we have developed and grown our programme and income streams to better achieve our mission, to increase impact for audiences and communities around the UK, and to take advantage of new technologies.
“Given economic headwinds and a challenging fiscal outlook over the coming years, it is more important than ever that policy makers and arts leaders fully understand the effective and sustainable business models available for performing arts organisations and their potential. We commissioned this research to help shape policy that supports performing arts organisations to deliver efficiently and that directs funding where it has the greatest impact.”
The full report is available on the National Theatre’s website.
