By Jim McCarthy Jan 21, 2011 0 comments

Consolidation? Not So Fast

I’m trying to understand better what the people in support of this idea that the arts are oversupplied are envisioning.

I think what they’re talking about is some kind of organized consolidation among arts groups, and I suspect some of them feel this should be some kind of top-down process of deciding where the resources should be shifted and “guiding” the consolidation.   (In business, this would be called collusion and is usually illegal.)

Most of the time, people advocating this position believe that A. they will be one of the “guiders” of consolidation, and B. that they (or their organization) don’t need to be consolidated out of existence.  Well, of course.

Consolidation is like vertical integration: it’s one of those concepts that for some reason makes sense to people on the surface.  If you group resources into larger buckets of control, they’ll be more successful.  Tell it to AOL-Time Warner.  Tell it to HP-Compaq.  Tell it to Daimler-Chrysler.  Tell it to Yahoo and every property it’s ever acquired.  Consolidation only makes sense if it makes sense.

The more fundamental question about the business some refer to as “the arts” is this: is enough value being produced?  How can these organizations be more fundamentally sound?  Changing the average size of the organizations in the segment doesn’t address that issue, and it feels like a desire for a quick fix to me.

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