Study finds revenues, employment took big hits

A newly released report from the New Hampshire Small Business Development Center spells it out: the arts and entertainment industry has been among the hardest hit by the pandemic.

The NHSBDC, in partnership with the UNH Survey Center, developed the NHSBDC Business Resiliency Survey to help economic development partners better understand the impact of Covid-19 on small businesses throughout the state.

The survey of 1,549 small businesses in New Hampshire found more than half had seen their revenue decrease by 50% or more, especially those with few employees and those in the arts and entertainment industry. The survey was conducted between June 10 and 24, and the results were released in July.

A subsequent arts affiliate report focuses on 126 respondents in 57 cities and towns who say that their business is affiliated with at least one of the following three arts organization: the New Hampshire State Council on the Arts, the League of New Hampshire Craftsmen and Arts Alive!

Arts organization affiliates are more likely than affiliates of nearly all other organizations to report decreased monthly revenue, and they most frequently cite a decline in sales, being required to close (having been deemed nonessential businesses), and reduced hours of operation as the primary factors that have impacted their business’s finances.

While the survey was being conducted, the state was transitioning from the Stay at Home 2.0 order to the Safer-at-Home order, and several federal and state relief programs were still offering assistance.

However, the survey found that respondents affiliated with an arts organization generally applied for or utilized relief programs at a far lower rate than other businesses (four in 10). Nearly half of arts organization affiliates said they did not apply for or utilize any federal program at all, nearly twice the rate of other businesses.

Performance venues hit hard

Jessica Gelter, executive director of Arts Alive!, a Monadnock Region arts advocacy organization, said the report’s biggest gut punch was the average reported number of employees at arts organizations — the number was less than half of what had been reported pre-pandemic in mid-February.

“Retaining expertise and community connections — the people that hold those things — the loss of those people is going to definitely have an impact on our organization,” she said. “We just don’t know how yet.”

Arts Alive! collected surveys from 36 arts and cultural organizations across the Monadnock region three years ago for Arts and Economic Prosperity 5, the fifth such study by the national organization Americans For the Arts. That study determined the arts’ collective economic impact on the region totals $18.6 million and $120 million statewide. There were 2,700 people in the Monadnock Region alone employed in the creative economy, according to the study.

Within the creative economy, performance venues have struggled the most as part of the first business sector that had to shut down in response to the governor’s executive order.

Keith Stevens, Peterborough Players’ managing director, said the theater instantly lost nearly 60% of its revenue — the bulk is from earned income, mainly ticket sales followed by concessions and advertising.

Since live performances ceased and the annual summer season canceled, the theater has relied on relief funding — Stevens applied for a grant through the state’s recently launched $12 million Live Venue Relief Program.

Contributions have made up the rest of what the 87-year-old theater has used to stay afloat this year.

“A lot who had purchased subscriptions did so through contributions or allowed us to hold on to the cash and deferred ticketing until next year,” said Stevens. “We did similar things with advertisers and sponsors — it’s enabled us to keep going.”

The theater also used PPP funds to keep staff on the payroll and bring back those who had been furloughed to work on different projects such as building maintenance.

Another venue that has a significant impact on the local economy, the 1,300-seat Capitol Center for the Arts in Concord, went dark in March.

“Seventy percent of our revenue comes from live performance,” said executive director, Nicolette Clarke.

Adding insult to injury, its Bank of New Hampshire Stage, which opened in 2019, was shut down at the same time.

Funding from the PPP and New Hampshire Employment Security’s WorkShare program helped the organization keep part- and full-time permanent staff working remotely for the first six weeks.

“After that, we couldn’t keep that level of staffing,” said Clarke. The organization’s staff was reduced from 42 to nine.

Innovations and modifications

Another finding from the survey: only one in eight respondents affiliated with an arts organization said their business had a resiliency or continuity plan prior to the pandemic. At the same time, nearly two-thirds of arts organizations believe resiliency planning will be very important or somewhat important to their business in the future.

Liz Gray, executive director of the NHSB-DC, said the organization, along with UNH Cooperative Extension, created the first Small Business & Community Resiliency Academy in response to the pandemic.

“We knew a lot of businesses were struggling,” said Gray. “The survey data helped us quantify major concerns.”

The NHSBDC has begun hosting webinars to introduce the meaning of business resiliency and how communities can work together to create a more vibrant small business ecosystem. The first such webinar the organization hosted in April had more than 3,000 viewers, Gray said.

“We’ll be talking about what we’re doing at the academy in the spring,” said Gray of this month’s webinars. “We’ll be providing businesses with tool kits to develop their plans and work with SBDC business advisors.”

The NHSBDC is planning a second round of surveys in February.

“It will be interesting to look at the original data set and then look again in six months and ask how people are feeling and what additional changes we are able to make,” Gray said. “Are revenues and customers and sales coming back? Are they feeling more comfortable in the recovery of their business? The great thing that came out of (the resiliency survey) is being able to look forward and see hope in the form of unique innovations and partnerships that came out of (the pandemic).”

Arts affiliates that responded to the resiliency survey also reported innovations and modifications that their business has implemented due to Covid-19.

Nearly half of arts organization affiliates reported that they are engaging in e-commerce, and about one-third are offering new products or services or have employees working from home. Arts organization affiliates also are slightly more likely than other businesses to report having implemented at least one innovation or modification as a result of the Covid-19 pandemic.

When asked about one successful thing their business has done in response to Covid-19, more than a quarter of arts organization affiliates mentioned that they changed how they deliver or produce their products, while others mention how they implemented remote or virtual work, practiced better external communication or advertising, or added new products or services.

“I think it’s really important to communicate to audiences they can still access the arts and still support organizations and businesses they love but in ways new to them,” said Gelter.

‘A lifesaver’

For the Peterborough Players, those new ways to connect with audiences include virtual messages of encouragement from people who have been part of the company, an online cabaret production, virtual gala and video readings of a book about the playhouse’s history.

This summer, the Capitol Center hosted outdoor concerts in partnership with Concord Community Music School and a weekend arts festival with League of NH Craftsmen featuring six regional bands. The main theater, which has reopened but is limited to selling 300 tickets for socially distanced seating, has also begun hosting comedy performances featuring such regional comics as Bob Marley and Juston Mckinney.

Some of the theater’s staff has returned to work, both remotely and at the arts center a couple of days a week. Another plan is to offer ticketed live-streamed performances.

Right now, it’s a waiting game for live performance venues, especially given the recent announcement that Broadway will remain dark until at least May of 2021.

In the meantime, the Capitol Center’s Clarke will apply for any federal and state funding available, and she is asking members and patrons to support the theater through donations of any size.

“We have a mission to try to serve the public,” she said.

New Hampshire/Massachusetts concert producer and promoter Seth McNally, founder of Stoddard-based M.E. Productions, pivoted his business model in March once he had to cancel his Peterborough Concert Series.

“We were lucky that we didn’t have a brick-and-mortar venue to maintain with high overhead, as we were more in the programming and consulting side of things for half a dozen venues, so we were able to scale down quickly,” he wrote in an email.

He created the Drive-In Live series, which is exactly what it sounds like: live concerts on a stage patrons can drive up to and park.

McNally called the series “a lifesaver,” considering his revenue went to zero in mid-April.

While the season, which ended this month, was successful, he believes his work has only just begun.

“Our only avenue to support all of our employees and ourselves will effectively shut down until we can start back up in late May 2021,” he wrote.

In addition to serving as a conduit of information about funding sources and helping artists through the application process, Arts Alive’s plan is to continue to hold meetups and conversations on how artists can innovate during the pandemic, as well as collect and share stories of how organizations are navigating through this unparalleled time, finding hope and inspiration and ways to fulfill their mission. Those stories will be published in the organization’s blog in the coming weeks.

Over the long term, Gelter said Arts Alive! may be helping to train replacements for arts organization employees that may have moved on or relocated. Right now, the organization is also working with Antioch University New England on a study to determine the barriers to accessing the arts with the hope of sharing that data with arts organizations this winter.

In the meantime, Peterborough Players is committed to a summer 2021 live performance season.

“If we get second, third and fourth waves (of Covid-19 outbreaks) and things get out of control, we are doing the work we need to do to be in a position to have a season in 2021,” said Stevens.

The theater, which is affiliated with the Actors’ Equity Association, is in the midst of improving ventilation systems, for one, and instilling protocols for cleaning and sanitation.

“The union has guidelines we have to fulfill,” he said. “We won’t know what the guidelines are three months from now but we know where we are now and what benchmarks we have to hit.”

To Stevens, waiting out a pandemic to Stevens has meant more time to take stock and be prepared for whatever the future may bring.

“When we come back, we should be doing things better,” he said, “and that relates to Covid and that relates to diversity, inclusion and equity — it relates to how we communicate.”