From Honolulu to Louisville to Detroit, American orchestras stand at the proverbial crossroads.

Orchestra administrators and musicians alike refer to the “perfect storm” of events creating an impending tidal wave of change, and an uncertain, angst-filled future. The precipitous economic decline of the past few years has eaten away at ticket revenues, audiences and philanthropic funds. Further, the economic model used for decades by orchestras has been shaken to its foundation.

Since last fall, the national spotlight in the ongoing saga of plight of American orchestras has been on contract negotiations at the Detroit Symphony Orchestra. If management and the musicians union cannot reach an agreement in the near future, it’s likely DSO’s entire season will be canceled, and with it, hopes could diminish that the orchestra can further build its audience and increase its annual revenue through ticket sales.

“The situation with the DSO is a flashpoint for the debate,” said Mark Clague, associate director of the American Music Institute and associate professor at the University of Michigan. Musician salaries make up the bulk of orchestra expenses. DSO management initially proposed a 33-percent cut in base pay, from $104,650 to $70,200. The union responded by agreeing to a 22 percent cut. Since then, both sides have reached an impasse.

Coming to terms with a lower salary structure is merely a symptom of a broader problem. The big question facing orchestras: What are the causes of the financial troubles facing American orchestras? According to Clague, there are two views: one, the crisis is the result of the U.S. economic downturn; and, two, the predicament goes beyond the economy and is caused by the wrongful, outdated approach to managing orchestras in the digital age.

With as much as 60-70 percent of an orchestra budget generated through fundraising, grants and philanthropic gifts, the focus for money has been on an increasingly burdened philanthropic sector and corporate givers. To make matters worse, these are the same sources sought by other nonprofits, many in social service and global development.

“Many musicians are saying it’s a cyclical problem, whereas administrators are seeing increasing problems raising money,” said Clague. “The reality is there has has to be a change in the way musicians are compensated and the activities of an orchestra. Musicians and orchestras must both diversify.”

Until now, many musicians resist being contractually obligated to augment their income by teaching, composing, and publishing writing about music. Their rationale is that as professional musicians, they must focus on the quality of performance as their top priority, and when possible, seek other ways to make money.

The future for orchestras is at hand, said Clague, and it will likely mean more outreach and teaching by professional musicians. “There needs to be a way to balance artistic quality with the needs of the community.”

QUICK LINK: League of American Orchestra

NOTE: In January 2009, the University of Michigan hosted the American Orchestra Summit. Administrators, musicians and scholars from around the country traveled to Ann Arbor to discuss the financial and musical challenges facing orchestras. To read the story, please go to REIMAGINING THE AMERICAN ORCHESTRA.