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Architects of Air - Exxopolis. Image: Daniel Boud

Challenges & opportunities

Our strategy and priorities emerge from the cultural and broader social landscape in which we operate. The direction, success and longevity of our artistic strategy and program over the next three years will be affected by a range of key factors in our external and internal environments.

The next generation will demand to be heard

The profile of our actual and potential audience is shifting rapidly as the make-up of the Australian community changes. As our city’s population and visitors continue to increase in number and diversity, there will be a growing demand for art that is not only accessible to all but reflects that diversity in all its forms.

According to the 2016 Census, more than 28% of Australia’s population was born overseas. Over the past 10 years migration to Australia from India and China has doubled and rapid growth in the tourism sector is fuelled by China. Chinese tourism is set to more than triple to 3.3 million visitors annually by 2026. The Opera House attracted 2.9 million international tourists in 2017.

The influence of generational change will also be dramatic, as the rise of Generation Y (or Millennials) continues. This is the most ethnically and racially diverse generation in Australian history and is on track to be the most formally educated. Those from Gen Y are predicted to earn an estimated two out of every three dollars by 2030.

Understanding the evolving perceptions and expectations of the Opera House, locally, nationally and internationally, is crucial.  This will help ensure that we continue to engage and connect with the community through the breadth and depth of our offer.

Experience is everything

Australians want to engage with the arts and do so in large numbers. The Australia Council’s 2017 National Arts Participation Survey found that:

  • More than 14 million Australians aged 15 years and over attended arts events or festivals in person in 2016 (72%);
  • 98% of Australians engage with the arts and more people than ever recognise the positive impacts of the arts;
  • Both online and live arts experiences are important to Australians;
  • The arts have an increasingly powerful role to play in promoting social cohesion;
  • Seven million Australians experienced First Nations arts in 2016 – double the 2009 number;
  • Music is the most popular art form, with younger Australians (aged 15-24) creating and experiencing the arts at the highest rates; and
  • One in four Australians give time or money to the arts, reflecting their value in our lives.

Audiences are turning towards experiences over products as a way to enrich their lives and find identity in a rapidly changing society. They want us to take into consideration the whole customer journey, their safety and security, and their expectation that we reflect society’s pace of change. To thrive in an increasingly competitive marketplace, arts organisations must develop strategies that engage, grow and monetise their most valuable customers, well beyond a simple transaction.

The challenges in renewing a World Heritage-listed building for future generations are manifold. The Opera House’s Decade of Renewal will upgrade venues, replace theatre technology and machinery, open more of the building to the public and allow more people to gather, experience and engage with all the Opera House has to offer. Renewal will also allow us to better meet the needs and expectations of artists and audiences, with new opportunities for programming and activations within the refurbished venues and areas.

Dollars and sense

The uptake of consumer technology and a concurrent thirst for free quality content poses legal and financial challenges. Large organisations are also being challenged to connect with communities differently. The continued rise of the sharing economy and scepticism towards big business, government and institutions are changing audience expectations. As a result, many organisations are emphasising community engagement to grow audiences, share knowledge and increase long-term market relevance.

Funding models for arts organisations differ significantly across the globe as the proportion of government subsidies decreases, especially for smaller companies. This trend has led to increased reliance on private funding such as philanthropy and sponsorship as a source of income, and a more competitive market for it. Private funding will necessarily continue to be a key growth area for funding arts product and is dependent on the cultivation and maintenance of key relationships.

The rise of ticket resale sites and an increase in scalping are contributing to financial uncertainty for venues and affecting the underlying market dynamics. While legislation is being developed in NSW to address these issues, scalping is likely to be a challenge for venues and presenters into the foreseeable future.

Sydney’s cultural landscape is evolving in step with the city’s development in infrastructure and population growth and make-up. Sydneysiders have a healthy mix of performing arts venues, resulting in a highly competitive market. A clear understanding of the Opera House’s market position will support effective strategic decision-making over the next three to five years.

Although the Opera House is often the first choice for artists because of its international renown, we cannot be complacent. We must work hard to ensure artists choose to work with us over other existing and newly established venues in Sydney.

Connecting the digital and physical worlds

For generations, performing arts organisations and tourist destinations have devised their business models primarily for operation in and around the physical world. The rapid expansion of consumer technology and social applications, however, has altered audience behaviours and expectations forever. Our challenge is to expand digital capability and increase audience outreach as part of a new integrated business model which doesn’t simply add cost without revenue growth.

Technology and digitisation have been fundamental in driving accessible art and culture nationally and internationally. Platforms like Netflix have accelerated a revolution already under way – capitalising on the way people engage with entertainment in the digital world. Mobile devices, the spread of Wi-Fi, decreasing data prices, the emergence of social platforms and availability of short-form content has meant individuals can be entertained anywhere at any time. Just as digital technology has disrupted “appointment” television viewing, so has it disrupted the notion of “place”.

Customers expect to be able to access, plan for and engage in any outing or experience in a similar “on demand” manner. The worlds of virtual and augmented reality are also creating new opportunities and threats to organisations and their brands.

The rise in digitally tailored technology is not reserved for audiences. In business, advances in digital technology are leading to reductions in high labour components and costs, safety culture enhancement, and sustainability and environmental considerations. This environment changes how performing arts products are developed and delivered. It also demands a clear focus on how technology may be used to maximise efficiency and remain competitive.