Museum Challenges

The Washington Post just published an interesting article on museums and some of the challenges they face in raising money and attracting attendance. One of the interesting points is the difference between more traditional museums, such as the Met and contemporary art museums.  The Met outdraws most, but is struggling with deficits and laying off employees while modern museums are thriving and getting large donations and endowments.

The author of the article believes there is a new economic reality for museums and is preparing a book to be published in 2017 called The Economics of American Art: Art, Artists and Market Institutions.

The block quote below is only a small portion of the Washington Post article.  Click on the source link below for the full article.

The Washington Post reports

Americans clearly love their museums, particularly in the summer months. In fact, museum attendance is estimated at about 850 million visits a year, significantly more than all the major league sporting and theme parks combined (about 483 million in 2011).

That’s in part because they have a lot of choices. If you include zoos, historical societies, botanical gardens and similar historical or cultural sites, the number of museums in the United States surpassed 35,000 in 2014, more than double the tally in the 1990s.

Art museums, which I would argue make some of the most important contributions to contemporary culture, number about 1,575 and are also very popular. One of the most famous, New York’s Metropolitan Museum of Art (“the Met”), for example, saw a record 6.5 million visitors in 2015, making it the world’s third most popular museum.

But record attendance doesn’t necessarily translate into record revenue. Just last month, the Met said it is laying off more than 100 of its employees as it tries to erase a $10 million budget deficit, just a few months after it announced a hiring freeze and voluntary buyouts.

Meanwhile, one of its rivals down the street, the Museum of Modern Art (MoMA), is flush with cash and just received another $100 million for an expansion and renovation. Yet only about three million people stopped by to see its art in 2015, ranking it 15th in the world.

What explains the different trajectories? Why do some museums flourish while others flounder?

Lately I’ve been exploring the new economics of culture and art markets for a book to be published in 2017 called “The Economics of American Art: Art, Artists and Market Institutions.” My research leads me to believe there are three reasons why different museums have different fates: fashion, demographics and billionaires.

MoMA and the Met are two of the top museums in the U.S., making them excellent illustrations of some of the financing problems facing museums today.

The Met, one of the most comprehensive museums in the world except for a dearth of holdings in modern contemporary art, has an annual budget of about $300 million. The museum, however, is  facing a deficit of about $10 million that would have ballooned to $40 million if it hadn’t begun laying off personnel. It also put a hold on its expansion of modern contemporary art exhibition space.

The competition for patrons willing to fork over large amounts money has become fierce in the contemporary art field. Besides MoMA, the Met must compete locally with the Whitney (which just opened a new downtown location) and the Guggenheim and with dozens of museums such as The Broad, a new contemporary museum in downtown Los Angeles.

Source: The Washington Post