The Value Innovation of Symphony Orchestras and the Triggering Effect of Coronavirus

The current coronavirus situation both gives an opportunity to the organizations and forces them to change and rethink fundamentally their business models. The pandemic causes an extremely difficult situation for symphony orchestras, as they have to cancel their performances and redefine how to reach their audience. Either they follow a Red Ocean Strategy and lose significant revenue or develop a Blue Ocean Strategy and prosper. The Blue Ocean Strategy involves a value innovation that can be achieved by four actions (eliminate, reduce, raise, create) and taking advantage of the opportunities offered by digitalization. After briefly reviewing the concept of business model innovation, the article gives an overview of some novel aspirations, attempts and projects selected from international and Hungarian symphonic orchestral life to provide excellent examples of how the value proposition can be redefined and how the expectations of the 21st-century audience can be met.


INTRODUCTION
The economic effects of the coronavirus are immeasurable for the time being, although it is clear that the world is facing a major challenge.It is considered as a "neglected risk", as companies and organizations have considered the challenges caused by an infectious disease quite unlikely (Ramelli & Wagner 2020).Naturally, the medical impacts of the virus are the most urgent however, the economic effects are likely to be as crucial as the medical ones due to the fact that the virus has also affected the economically most important nations (Baldwin & Tomiura 2020).Many companies are temporarily pausing operation worldwide, universities and schools had to change to distance education, organizers had to postpone all kinds of events.Moreover, in many countries it is prohibited to walk on the streets without a good reason.The emergency actions can cause a significant loss of income for the actors involved in the economy.Organizations which can react quickly -or can react at all -to these new circumstances will be able to survive this period and may gain competitive advantage.In the case of those which cannot tailor their operation to the present situation, survival is questionable.The current situation poses especially great difficulties for organizations of the cultural sector which deal with performing arts, as concerts and performances -providing the basis of their operation -have become impossible.In order to gain "immunity" to the virus, business model innovation and digitization are essential.

PROPER MANAGEMENT THINKING: VALUE INNOVATION INSTEAD OF REDUCING COSTS
A manager could easily come up with the following innovative, cost-saving suggestions for symphony orchestras: 1. the presence of the conductor at the concerts is unnecessary, as he has already taught the piece and given instructions to the orchestra during the rehearsals; 2. in some parts of the piece, the four oboists do nothing: it would be advisable to reduce their number and distribute the task evenly, in order to avoid suddenly getting so much work that one person is not enough for it; 3. all violinists play the same thing, which is unnecessary duplication, as one person could play the given parts (and when big band sound is needed, the desired effect could be achieved by electronic sound amplification); 4. there is no point in the horn repeating the part that the strings have already played, and omitting the redundant parts could significantly shorten the piece, which could result in less salaries being paid (Pemberton 2014).
It is obvious that all of the suggestions above would greatly reduce costs, although it is also clear that these are not real alternatives: orchestras have to follow artistic aspects to create quality productions.However, this does not mean that business thinking is incompatible with focusing on cultural values and artistic activity.The question, in fact, is how to simultaneously control or even significantly reduce costs and greatly increase the value provided to the customers.This article highlights the importance of management thinking by presenting some innovative symphonic orchestral solutions, business model innovations that fundamentally change the way orchestras operate: reshape the revenue structure, allow new audiences to be addressed, or redefine value provided to consumers.

CONTINUOUS VALUE INNOVATION
The business model represents the operational logic of the organization -in other words, the system of "business" ("how the organization creates, delivers and captures value," Osterwalder & Pigneur 2010, p. 14)and focuses on the way that value is created.Business modeling tools are not only suitable for reviewing the operation of for-profit companies.They can also be used in the case of non-profit organizations, as every organization must have a business model: in order to survive, revenues must cover the costs of creating and delivering value.
In a rapidly changing world, however, no business model is forever; it needs to be continuously improved in order to survive and operate successfully.Thus, in the case of symphony orchestras, it is not enough to rely on the existing repertoire and follow traditional models.Without innovatively rethinking their operation and "services", orchestras will find it difficult to win against other segments of the entertainment industry (e.g., pop music concerts, cinemas) in the competition for people's leisure time (Radbourne & Arthurs 2007).Business model innovation is therefore needed to ensure the prosperity of orchestras in the 21st century.Business model innovation means that there is a significant change in one or more elements of the organization's business model (Horváth et al. 2018).
Red Ocean means the known "market place" where industry boundaries and the rules of competition are known and organizations want to benefit more from current demand by defeating each other.The more organizations appear on the market, the lower the potential for growth is.In contrast, Blue Ocean is an untouched marketplace that provides opportunities for profitable growth and creating new demand.The way out of the "bloody" struggle and the way to maintain a competitive advantage is to formulate new value propositions and to map new ways of value creation and delivery (Kim and Marbougne 2005;Matthyssens et al. 2006).An essential element of the Blue Ocean strategy is value innovation, which can be defined by answering the following questions: 1. Which elements can be eliminated that were taken for granted before?
2. Which elements can be reduced below the industry average? 3. Which elements can be increased compared to the industry standard?
4. Which elements can be created that the industry has so far not offered to consumers?
By reshaping the value provided for consumers, the organization can achieve a more customer-oriented approach and address potential future customers as well (Lauer 2019).Value innovation can be reached by redefining the business model and the standards of an industry (Berghman et al. 2012).Compared to the traditional orchestral operating model, such innovative solutions can be recognized both on the international scene and in Hungary; examples of these are given below.

STRUCTURE
In the frame of their corporate social responsibility (CSR) activities, companies often happily sponsor classical music organizations, including symphony orchestras, which can be beneficial for them from both a social and a business point of view: it helps to achieve business goals and contributes to the preservation of classical values (Ásványi 2014).Sponsorship is an important part of the revenue structure of symphony orchestras; however, in the current situation affected by the coronavirus, orchestras cannot rely on the support of companies that are also facing difficulties.In order to survive, orchestras have to look for new ways by rethinking either the revenue structure or the value proposition.
Recently, many orchestras have created a "friends of the orchestra" -a group for supporters -in order to build a core audience and have a more personal connection with the concert-visiting audience.By charging membership fees, this also provides a new source of funding.Events and community building programs for members strengthen audience engagement.For young people, several orchestras create a separate group (see, for example, the Young Friends of the Festival Orchestra Budapest or the Junge Freunde der Berliner Philharmoniker) with programs and events that address younger people.This also helps to solve the problem of audience renewal by creating and nurturing the next generation of concert-goers.Keeping in touch with the friends and supporters of the orchestra helps the organization to better understand the opinions and needs of customers and can even be used to channel innovation ideas from outside.As many researchers emphasize, customer orientation and the integration of the "voice of the customer" into business model innovation is essential (Wirtz & Daiser 2018, Pynnönen et al. 2012).
An excellent example of crowdfunding, which is very popular today, is the "sound investment" typically used by English orchestras.It means that the coverage of the costs of the composition and performance of a given contemporary piece is created by breaking down the required amount into smaller units (sound tickets), which are sold among those who are interested.In return, the "investors" are invited to rehearsals, have the opportunity to meet the composer, receive a dedicated score and are kept up to date with the progress of the piece.(ABO, 2010).Similarly to the above mentioned "friends of the orchestra" groups, it also provides an opportunity to get to know the opinion of the audience better, involve them, and nurture public relations.

INNOVATIVE REPERTOIRE -ADDRESSING AND INVOLVING NEW AUDIENCES
We can often hear about the problem of the aging audience of classical music.The average age of visitors to classical music concerts is between 50 and 60 years; classical music is not part of the lives of most young people (Váradi 2010;Figaro 2013).In order to have a music-lover core audience in the future as well, great attention must be paid to reaching out to new segments, especially younger people, and expanding the target market.In this process, it is essential to get to know the target audience of the performances and the special needs, expectations and interests of each customer segment, as this makes it possible to expand the aging audience (Šimic & Pap, 2019).Today's consumers, especially the younger ones, typically appreciate creative, innovative productions, demand active involvement and multi-sensory experiences, and evaluate performances mainly along the functional (quality, price, location) and emotional (productionrelated emotions) dimensions (Ercsey 2014).Having recognized this, many orchestras have come up with innovative repertoires and productions: they integrate different genres and branches of art into their programs, come up with a novel concept, or look for unusual concert venues.
An excellent example for mixing genres is the Cincinnati Symphonic Orchestra (Ohio, USA).The members of the orchestra founded the Cincinnati Pops Orchestra, which draws from a wide range of musical styles and genres and gives highly successful, popular concerts in a symphonic orchestral lineup.They have collaborated with famous artists such as Ella Fitzgerald (jazz), Henry Mancini (film music), Dave Brubeck (jazz) or John Williams (film music).Besides the pieces of Mozart or Beethoven, their repertoire also includes movie soundtracks (such as Star Wars, Harry Potter, Shrek, Madagascar), pieces by famous, deservedly popular pop music singers (such as Whitney Houston), musicals, background music of stunning natural (such as the Wonders of America) or scientific films (One Giant Leap -exploration of outer space) and live concert shows with movie screenings (Cincinnati Symphony 2020).
The repertoire of the Charlotte Symphony (North Carolina, USA) also features novel productions in addition to the classical ones.The "Pops" series offers entertainment from the disco music of the '70s to soul, swing, jazz classics to Broadway hits.The "Movie" concert series features popular movies (such as Star Wars, Jurassic Park, Polar Express) in a unique way: the soundtracks are played by the orchestra while the film can be viewed on a giant projector (Charlotte Symphony 2020).
The Brooklyn Philharmonic has integrated hip-hop into their production: it has given a free concert in one of Brooklyn's neighborhoods with one of the genre's most popular rappers.The basic goal of the orchestra is to tailor the performance to the needs of the current audience.In this case, the integration of hip-hop was the way to the local community (Woolfe 2011).
Such crossover productions can be recognized in the case of Hungarian orchestras as well: many of them have applied the concept in the domestic market.For example, the Dohnányi Orchestra of Budafok has created its Cinemusic series, which focuses on performing movie soundtracks in the same way as the above-mentioned Charlotte Symphony.The orchestra also gives concert shows which integrate other music genres and branches of art as well (BDZ 2020).The Philharmonic Orchestra of Győr is about to premierebesides other movie concerts -its production called Amadeus Live which features the movie "Amadeus" with live orchestral accompaniment (GYFZ 2020).The Danubia Orchestra of Óbuda also regularly performs movie soundtracks, has created its Danubia Pops series with the classics of pop music, and has a musical standup comedy show as well (ÓDZ 2020).
Reaching a new audience is not only possible with an innovative repertoire.Many orchestras try to engage a wider range of consumers with unconventional concerts that adapt to the rhythm of young people's lives.The Midnight Music concert series of the Budapest Festival Orchestra offers an alternative entertainment opportunity for those who prefer latenight programs: the audience can enjoy a concert colored with interesting reviews of the pieces performed while sitting on beanbags or lounging among the musicians -by breaking the conventions and leaving the formalities (BFZ 2019).The "Spicy Classics" series of the South Netherlands Philharmonic reflects a similar concept: classical pieces are performed in a modern way, while the members of the audience can even have a beer if they want (Bijsterveld 2019).The "Night/Light" concerts of the above-mentioned Cincinnati Symphony Orchestra also focus on an unusual concert experience and try to create an informal atmosphere: at the concerts start at 11:30 p.m., the audience can enjoy the music with a glass of wine in hand, by candlelight (Cincinnati Symphony 2020).

EXPLOITING THE OPPORTUNITIES OFFERED BY DIGITIZATION AND ROBOTIZATION
Digitization opens up new ways for the orchestras to rethink their value proposition and also to reach and address audiences in an unusual way.Nowadays, "digital thinking" is essential in the field of cultural management as well (Hunt, 2019).Live concert streaming is no longer a novelty; however, the Berlin Philharmonic's Digital Concert Hall project was the first initiative which used social media to broaden the audience globally by making the orchestra's excellent concert recordings available to consumers around the world via the Internet (Digital Concert Hall 2019).Thus, the audience can access the orchestra's recordings or even live concerts anytime, anywhere.This also provides an opportunity to reach a new audience: the concept can be attractive to those who, while open to classical music, cannot appear in person for any reason (e.g., remote location, schedule, other tasks/programs).Furthermore, it is a great way to reach out to young people who prefer listening to music at home and often consider the traditional concert form uncomfortable (Figaro 2013).Since the concert experience is not the same through the screen as live, no orchestra has to worry about losing current audiences.The application of the concept is more likely to result in the involvement of new audience members, while the existing core audience may "consume" more.Today's online viewers can be tomorrow's ticket buyers.Nowadays, almost all orchestras -both international and Hungarian -make available previous concert recordings and live performances by online streaming, which is currently gaining even more importance in the pandemic situation.
Another interesting example of the exploitation of opportunities offered by digitalization is the San Francisco Symphony's "SoundBox" program, which aims to redefine the concert experience.The venue for the program is one of the orchestra's rehearsal rooms, and the concert hall resembles a cozy bar where guests can enjoy the concert with a cocktail or beer in their hands.Thanks to the modern technological, audiovisual solutions and effects, viewers can feel as if they were in a cathedral or -just a moment later -in an underground club, while the volume and complexity of the music is constantly changing.The musical experience is enriched by video installations projected on the walls, which dynamically adapts to the current environment (SF SoundBox 2020).During the program, the artists also put emphasis on interactions with and involvement of the audience.The innovative performances of SoundBox have great audience success; tickets are usually sold out within a few days.
One of the most innovative projects of the digital age can be linked to the name of the Detroit Symphony Orchestra: in 2008, the orchestra was conducted by a Honda Asimo robot (Ovshinsky 2008).The initiative is not unique: the Tokyo Symphony Orchestra performed Beethoven's 5th Symphony conducted by a robot (Rojas 2004), while the Japanese-developed "Alter" robot debuted in 2018 as conductor (RobotReporters 2020).Of course, it is questionable whether a robot can really replace the conductor, since every movement and facial expression can be significant.However, these novel experiments undoubtedly point out that digital transformation is present in all areas of life and is constantly shaping our everyday lives.

CORONAVIRUS
The importance of digitization has become even more obvious nowadays: due to the worldwide coronavirus epidemic, orchestras and theaters have had to cancel all of their performances.The only way they can share concerts, performances and reach the audience has become the Internet.Many orchestras make their previous recordings available and give online performances -quarantine concerts -without an audience, in most cases for free.The orchestras are also trying to put emphasis on maintaining personal connection with their audience: they are creating behind-the scene-videos which provide an insight into the lives and practice habits of their musicians.The previously reviewed orchestras are taking their part in online education as well by creating listening guides to famous musical pieces, musical coloring books or docuseries about renowned composers (Swed 2020;Voynovskaya 2020).
Some unique and brilliant ideas can be recognized in the case of Hungarian orchestras as well.For example, in the frame of the "Open a window for music" campaign, the MÁV Symphony Orchestra provided access to music to everyone from two cars cruising in Budapest and playing previous recordings of the orchestra (Walker, 2020).Just to give another example, the Danubia Orchestra of Óbuda -after creating its successful video called "Symphony orchestra at home office" featuring a famous Hungarian folk song -has started its project "Musicians working from home -Seriously" ((O)tthonról (D)olgozó (Z)enészek -Komolyra fordítva).In the mini-videos of the project, some musicians perform a pop song in the style of a famous classical composer in chamber music format (ÓDZ 2020).
It is clear that coronavirus is not a few-day-long challenge for which a temporary solution must be sought.Current forecasts suggest that the epidemic will last for several months, and consumer habits are expected to undergo irreversible changes, too as people are becoming financially more vulnerable (Mogaji 2020).Furthermore, similar cases can occur at any time for which orchestras have to be prepared.As a result, orchestras (and in a broader sense all kinds of organizations) need to fundamentally rethink their business models.In the current situation, more "digitally mature" organizations have a significant advantage over those that are just beginning to explore the possibilities; however, it is not too late for those either to innovate their business models.Business model innovation can be implemented efficiently and effectively through the collaboration of artists and economic professionals who are experts of the methodology.As Köves et al. (2020, p. 219) highlight, "art and science can be natural allies of each other" -it is therefore worth exploiting the synergistic opportunities offered by the cooperation.

CONCLUSIONS
To sum up, we have compared the innovative solutions and experimental productions (Blue Ocean Strategy) described in detail above with the "traditional" (Red Ocean Strategy) symphony orchestral performances in terms of the experience and value provided to consumers (Figure 1).

Figure 1. The value innovation of symphony orchestras
Traditional symphony orchestras are repeatedly offering a high quality classical music performance which means low risk (high value) to the customers.Innovative solutions are eliminating the risk reduction value proposition by surprising their customers with something new.The innovative repertoire helps orchestras reach new audiences, including younger people, while leveraging digital opportunities helps to reach audiences in a novel and perfectly convenient way and to redefine the concert experience.
The number of classical music performances is reduced, but innovative performances are more accessible, convenient and customized to the customers.Location is not restricted to concert halls -clubs or other unusual concert venues can be selected, and moreover, digital broadcasts can be listened to anywhere.The pricing of an innovative production is on average at the same level as a traditional production, but the range is different; innovative productions can be more expensive, on the other hand, many are available for free.Newness has many sources, such as integrating classical music with other musical genres and branches of art, or offering a multisensory experience.Of course, innovative approaches and experiments do not guarantee immediate success, but the fact that an initiative is not well received at first does not mean that it cannot become successful in the future.
This article highlights the importance of orchestras being able to respond to the changing needs of consumers and adapt to changes in the world.Such a change is, for example, the current coronavirus epidemic, which affects all sectors and creates challenges for all organizations -including symphony orchestras.
It is important to note that all innovations become standard after a while and are no longer considered as "extras" by consumers.As Lauer (2019) emphasizes, if there is a newcomer on a market with a different operating model and value proposition, the traditional players also start reshaping their strategies towards the new direction, thus a convergence can be observed.This has happened with many of the previously described innovative ideas that are widespread nowadays.If other organizations start applying the same concept, the competitive advantage resulting from it disappears.Thus, new solutions and ideas are always needed: longterm success is not possible without continuous innovation, experimentation and rethinking of the operation.All organizations have to create a value proposition and a business model that is appropriate to their market segment and have to handle the changes of our world.Uncertainty is, of course, a natural feature of innovation -let us recall that most of the composers who are very popular today were pioneers in their age!