Policies for boosting arts demand

Demand expansion hand drawnPolicies that encourage arts demand can return balance to an oversupplied Australian arts sector and fix many of the ills of Australian cultural policy.

Policies for boosting arts demand, the second of my articles for Culture360[1], expands on my ideas for rebalancing an Australian arts sector that is showing the classic signs of oversupply.

As evidence of oversupply, I present data showing increasing levels of creative arts practice and declining relative incomes of professional artists. The policies that dominate Australia’s cultural policy system tend to work to boost supply, so they are likely to aggravate problems associated with oversupply, such as declining relative incomes. Policies aimed at boosting arts demand – ‘demand-side policies’ – can work to alleviate the problems.

The figure below illustrates the difference between ‘demand-side’ and ‘supply-side’ policies. Demand-side policies act on the audience-consumer side of the cultural ‘value chian’, whereas supply-side policies act on the creation, production, and distribution side. (This side also includes services to these actors, such as membership organisations, peak agencies and artist representatives and agents)

Model of supply and demand side policies culture value chain

The article provides examples of such policies and compares their impacts with supply-side policies.

I’m really arguing for two things in the article – more policies aimed at expanding arts demand and more demand-side policies. These are not one and the same: many ‘audience development’ policies are in fact supply-side policies. For example, most of the Australia Council’s audience and market development initiatives are not demand-side policies, they are supply-side policies -– they provide incentives to producers and marketers, not to consumers.

Just because a policy aims to expand audiences doesn’t mean it’s a demand-side policy. A policy that subsidises theatres to improve disabled access is a supply-side policy: even though it has expanding audiences as its ultimate objective, it funds producers, not audience members. Similarly, assistance to arts marketers ‘incentivises’ the supply-side of the arts sector, not the demand-side, even though the ultimate goal is to increase arts audiences. Marketing assistance provided to arts organisations is a supply-side intervention.

I thought this was a bit too complicated to flesh out in an online article aimed at a broad audience, so glossed over the distinction. In hindsight, perhaps this was a mistake. Some comments received reveal scepticism about the efficacy of audience development programs. Perhaps this is because most of them are supply-side rather than demand-side policies. I would expect that demand-side policies would work much better than supply-side policies at expanding audiences.

The article argues that demand-side policies have a number of benefits over supply-side policies:

  • They ensure that art is experienced, that it has an audience. Under supply-side policies, art may be produced but not experienced by an audience
  • They can be designed to leverage private expenditure
  • They can have a multiplier effect on arts consumption
  • They have a democratising effect on who gets funding, because decisions are taken by a wider group of people

The democratising brings a number of additional benefits:

  • It improves the equity of arts funding
  • It reduces the power of ‘vested interests’ in arts funding
  • It lets arts funding flow to newer artistic forms, thereby allowing policy to move more easily with the times.

Many of the pros and cons of each type of policy result from economic modelling of cultural policies detailed in my post Modelling the economic impacts of cultural policies.

Arguments for more demand-side policies in Australian cultural policy are not new. But, with the government still promising to develop a national cultural policy, it does seem a particularly critical time to argue for a better policy mix. More of the same will only make artists’ lives more difficult.

Read the full article:
Policies for boosting arts demand>
Culture360, 12 July 2011


[1]The earlier Culture360 article is An introduction to Australian cultural policy, 5 July.
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