February 12, 1998 | Read Time: 4 minutes
More and more non-profit arts groups are exploring new ways to generate revenue. But few organizations have taken the steep path toward independence blazed by the Modus Ensemble in San Francisco.
Five years ago, the founders of the experimental theater troupe simultaneously started the Content Group, a for-profit information-technology company, to help subsidize the theater.
Initially, the business was intended to operate as a seasonal venture so that the principal employees would have ample time to work on their stagecraft. But the company has been so successful — growing to more than $1-million in revenue and 20 employees — that it can no longer be shut down to allow its employees to prepare for theatrical productions.
The decision to form the technology company stemmed from the theater group’s desire to take financial matters into its own hands, rather than wait for foundations or wealthy individuals to back its artistic vision.
“Normally, if you go to a meeting of arts groups to talk about funding, you hear a lot of whining,” says Timothy O’Brien, artistic director of Modus and president of the Content Group. “Frankly, we just didn’t take that approach.”
Instead, Mr. O’Brien and his peers simultaneously created both organizations in 1993, with the profits of one being used to sustain the other. Last year, the Content Group’s subsidy to Modus amounted to nearly $40,000 — representing about two-thirds of the theater group’s total budget. Most of the remaining income is earned through ticket sales.
The benefits of the two organizations’ working hand-in-glove go far beyond the financial subsidy paid out by the Content Group. Since four members of Modus work for the Content Group, the theater company does not have to raise money for their salaries. What’s more, Modus has access to state-of-the-art computer and video equipment in the Content Group’s sophisticated media laboratory, which the theater group uses in designing its productions.
The Content Group also benefits from the relationship, by drawing on the creative talent at Modus. Christine Okon, a product-marketing manager at Informix Software, a computer company based in Menlo Park, Cal., says that the Content Group was particularly effective in helping her company present its wares at the annual meeting of the National Association of Broadcasters. The Content Group arranged for actors to perform a skit at the Informix booth that conveyed how Informix products could help broadcasters manage information more effectively.
“The Content Group is unusual in the way they traverse between the corporate world and the theater world,” says Ms. Okon. “By coordinating the look and feel of our booth, they underscored what our message was.”
Often, the work of the Content Group is less directly related to the theater. Last summer, for example, the company provided a variety of high-tech services for the Bank of the West Tennis Classic, a professional tournament held at Stanford University. The company put together a huge “video wall” where fans could watch player interviews and keep track of the action away from the courts, and it created a World-Wide Web site that provided up-to-the-minute scores and tournament standings.
The major drawback of running a rapidly expanding company alongside a non-profit theater company, say members of the organizations, is that there are not enough hours in the day to manage both concerns. Mr. O’Brien would prefer not to have to run a for-profit company just to sustain his theater activities. He believes that government grants and private contributions ought to be adequate to support artistic endeavors. “But I am a pragmatist,” he says.
Mr. O’Brien hopes to sell the Content Group within a few years to another information-technology company for a hefty profit. His goal is to create an endowment large enough to provide roughly $500,000 in annual operating income to cover the theater’s costs.
Although that may sound ambitious, Mr. O’Brien has already built and sold a business. In 1984, he founded the Account Data Group in Washington, D.C., which grew to $10-million per year in revenue before he sold it.
Mr. O’Brien regards his prospects with a sort of weary optimism, confident that he will achieve his goals but exhausted from the path he has chosen. “We may eventually have our independence,” he says, “but in the interim, we can look longingly at our peers who spend all of their time focused on their art.”
