Is the Fringe good or bad for NYC?

Yesterday, within a span of about an hour, I heard two conflicting reports on how the NYC Fringe Festival affects the city's off-off-Broadway and experimental theater scene. NY1's On Stage program had multiple interviews of theater professionals talking about how the Fringe is the only time in NYC when theaters can really put on a show for the love of the theatrical process more than for profit. An hour later, I see a Time Out New York feature which, in dissecting the problems of Manhattan's downtown theater scene, puts the blame squarely on the Fringe:

“Off-Off Broadway is now Philadelphia,” semi-jokes Ron Lasko, the Fringe’s publicist. While he says gentrification has done a lot of the damage, he admits the festival itself is also to blame. “It’s such a great financial bargain that many indie companies are quite content to produce their new work the Fringe [for a $550 fee] instead of seeking out costlier venues at other times,” he says. “When a showcase costs $20,000 to $40,000 to mount, there’s little room for experimentation.”

In reality, I think there's truth to both these statements. While we see more innovation per minute of stage time now than any other time in the New York season, maybe we should be spreading out that innovation more. I know Mike Daisey and Scott Walters would certainly say so, as this is a microcosm of their problems with the larger national scene in their mind. But at the same time, that may not make financial sense, as Don Hall would argue.

I'm a bit conflicted over this, as I feel the products that come out of the Fringe aren't as good as they're made out to be. Yes, the Fringe is more innovative and smaller, but that doesn't always mean better. There hasn't been a real Urinetown-level success in a long time, and I think that's more of a product of talent than of economics. NYC's Fringe pales in comparison to what's going on in Edinburgh right now. But is that the product of a flawed, fixable system or some other factors (creativity gaps, larger cultural trends, the limits of the medium). I don't think I have a firm opinion here. What about you guys?

The Don Hall/Mike Daisey/Scott Walters/Adam Thurman debate

The breakdown:

• Theaterforte calls on Mike Daisey to define his view on how theater exactly fails America more clearly.
• Daisey responds, calling for a culture where the artist is nurtured and not desperate for income.
• Scott Walters gives his take on Daisey's point, advocating to keep it simple and return regional theater to its core values.
• Don Hall calls Daisey and Walters out, arguing that if restructuring American theater was so simple, it would have happened already. Hall makes a parallel to a professional gambler complaining about lacking health insurance-it's his choice, after all.
• Here's when the shit really starts to hit the fan. First, Daisey lashes back at Hall, claiming Hall misrepresented his argument and shoots down the blackjack parallel:

  This is just dumb. I don't know where to start--do I start with how art isn't much like gambling? Or how what society gains from art is wildly different than what it gets from gamblers? Or do we talk about how one form of activity (gambling) is on the ascendency, while theater has been shrinking...oh, I give up. It's just a really facile analogy, and I'm not going to parse it.
  
  The only part of this that is true is that being a working artist *feels* like being a professional gambler. Otherwise, it's worthless.

• Then, out of nowhere, Adam Thurman swoops in. He takes Hall's comparison one step further, drawing a parallel to the World Series of Poker and how nearly 90% of the players are "Dead Money." This is just like the theater world, Thurman argues. A handful of people who have enough skill and have learned to take advantage of the system, and lots of people who have foolishly jumped into the fold and will never make it.
• Daisey goes apeshit on Thurman, arguing that theater is not a zero sum game where the success of one person depends on the failure of another. Theater is not competitive, and one person's success does not entail another man's failure.
  
• Walters give his two cents on the Hall-Thurman analogy, breaking down their artistic Darwinism and noting that there's an element of luck to it. This post is followed by a particularly nasty comment trolling session between Walters, Hall, and others.
• Thurman strikes back with what he claims to be a hard-line economics stance on how Daisey and Walters are unrealistic, with a post entitled "The Power of Scarcity."
• Walters argues that Hall and Thurman disagree with him and Daisey on whether fixing American theater is a normative or descriptive problem. Despite being the only academic in the group, Walters takes the normative side. Hall leaves a nasty comment calling Walters cracked.
• In his Friday roundup, Hall calls Thurman's article the "Best Fucking Theater Post of the Week"

And then they all called it a week and went out and had tea. Sheesh, I guess if you don't want drama in your blogging life, don't blog about drama.

My Take:
For one, I think Hall is right to point out that fluffy, oversimplistic talk accomplishes nothing. I also think Thurman is right to point out that there is an inherent talent gap in all fields, be it theater, poker, or law. That's a side of the starving artist argument that is often ignored. What I will say, however, is that Daisey is right to point out that there's no need for theater to be competitive. Thurman claims to be taking the realist economic stance, but he makes an egregious error in his view of scarciy.

Yes, resources are scarce in the arts economy, just as they are in the world economy. But the economics of art, just like the economics of the world, is not like a poker tournament. There's not a fixed amount of money involved, and there's no fixed pie for each person to acquire a percentage of. One theater professional's success does not need to mean another one starves. Walters is right that Thurman has taken a descriptive stance, but he's overlooked how flawed his descriptive stance is.

If you're going to talk economics, why not use an example from actual economics, instead of a poker tournament? When India developed a tech industry, did America's tech industry crumble? No. Instead, India provided an extended pool of resources that has helped the U.S. and world economy much more than it has hurt. If it wasn't for India's economic development, there would be no Citigroup today.

Contrary to Thurman's assessment of scarcity, more theater would not mean that there is a shortage of pieces of the pie to be had. It would instead mean that the pie gets bigger. The argument is not that a bad theater artist should make as much as good one, but he should be able to make an income that's sustainable. Healthcare should not be dependent on your success. A bad lawyer can still make six figures, while an exceptional one can make eight figures. Theater artists should be able to make a living the same way.

The economic explanation for why most theater artists do starve is that a theater professional is not as heavily demanded as a laywer, and there is an an abundance of theater people over what is demanded. This creates a surplus of theater workers, which means more unemployment. Demand, however, is elastic, and it can increase. If steps can be taken to shift a demand curve to the right, then there will be more theatrical professionals making more money. The demand could increase by creating more lively, cheaper theater. Lively and cheap theater requires artists who can take risks without worrying about starving because their medical bills are so high.

When a basic standard of living is met, theater jumps back into the world like a spring. Theater artists can take more risks and ticket prices go down. People start coming back to the theater, putting money into the system. A theater artist's expected income increases, meaning more people can live that life, and have more of an incentive to do so. The normative goals are met by descriptive economics. Simple as that, people.

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Tax credits on the entertainment industry

No sooner do I take my Intro to Microeconomics final than I find this article on the tax incentives of various locations for the film industry.

Broadway did NOT contribute $5.1 billion to New York economy

Variety had a report up talking about how Broadway contributed $5.1 billion to New York's economy, which is up from $5.09 billion last year. These reports, according to Broadway league's biennial report, are misleading and a gross exaggeration that anyone who's ever taken a basic economics class can counter. The report got that number based on "sums paid out by producers and theater owners as well as ancillary spending -- hotel, restaurant and transportation costs, for instance -- by visitors who reported seeing a Broadway show as their primary reason for visiting New York. Total also figures in the indirect after-effects of this spending as it circulates through the economy."

To be fair, this report is slightly more accurate than most reports of this type, as it focuses on tourists who primarily visited for Broadway. But the number is a still an exaggeration for a number of reasons. For one, it assumes that if Broadway didn't exist, Broadway producers, realtors, and visitors would not contribute to New York for another reason, including what could theoretically be there instead of theater. It adds hotel, restaurant and transportation costs as if the rooms in hotels or the tables at restaurants wouldn't be filled by visitors in New York for other purposes. Secondly, I'm deeply suspicious of what those "indirect after-effects" were, as the report was basically able to make up any figure it wanted for that. It also doesn't consider the costs that hotels, restaurants, and transportation went through. Instead it just considered the costs of Broadway (and the Variety report was unclear if those were figured into its contributions to the economy), which went up by $111 milliuon dollars.

The more telling sign is that even as visitor spending for New York tourism increased overall, Broadway visitor spending was actually down. This basically means that Broadway has actually contributed less to the overall economy than a conceivable substitute—for instance, stores for international shoppers looking to capitalize on the weak dollar—would be able to contribute. So not only is Broadway not contributing $5.1 billion to NYC, it's actually costing the city money through unrealized revenue with conceivable substitutes.

This is not to say that all Broadway theaters should fold and be replaced with more Disney stores. I'm just saying that this report should be taken with about a pound of salt.