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The Met's Untapped Gold Mine

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In September of 2006, The Metropolitan Opera issued a press release, announcing that unions representing The Met Orchestra, soloists, chorus, ballet and stagehands had reached agreements, granting The Met (in the words of General Manager, Peter Gelb) "control over the creation and distribution of our electronic content." Mr. Gelb went on to say that "In the past, media activities have required substantial upfront payments to all parties involved in the performances, rendering flexible and wide-ranging plans effectively impossible." He described the new agreements as involving "a new revenue-sharing model."

In part, Mr. Gelb understands that The Met is sitting on an untapped gold mine. It has made and retained a vast audio archive from its Saturday afternoon broadcasts. Once broadcast live, the audio recordings of the performances went into the vault and were quite literally never heard again, since commercial exploitation rights were never granted. A rare exception was made for archival recordings that were sent as "thank you gifts" to high-dollar donors, but that, technically, was not a commercial use. If a record company located outside the USA sought to release an off-the-air recording of a Saturday afternoon broadcast to an American audience, The Met was never hesitant about swinging the full weight of its lawyers into position to enjoin its distribution. One reason given for this was "union agreements demand it." The Met has now begun to broadcast these archival recordings on its own channel on Sirius satellite radio. Terms of the deal were not -- of course -- divulged.

Neither The Met nor the unions involved have disclosed the terms of the global "new revenue-sharing model," but it is clear that the agreements are the lynchpin of The Met's venture into the Digital Age... or as the less-charitable among us would say, they are the lynchpin of The Met's transformation from opera house to electronic content provider.

It is utterly unclear what the goal of The Met's foray into electronic production really is. It is unlikely to be the oft-repeated goal of building an opera audience in general and a Met audience in particular, the ultimate aim of which is to increase ticket sales. It is more likely to be the creation of The Met as the Wal-Mart of Opera in the DVD era and beyond, in which The Met will cater to the customer's every operatic need, from CDs to videos to satellite radio to podcasts to theater simulcasts and, for all I know, video games. If actual ticket sales are part of the goal, it seems to be a well masked element of it.

The early indication is that The Met's simulcast ventures have generated roughly three million dollars in revenue for the company (The Met keeps $9.00 of the $18.00 ticket price). No word has been received as to the terms under which The Met's vast audio archive has been or will be made available for commercial exploitation. The terms of the Sirius satellite radio deal are likewise unknown.

All of this is a slightly different way of saying that The Met has bet the farm on the continued cooperation of the unions, and on their reasonableness going forward. If the unions balk, all of this electronic content becomes just so much static. Continued union cooperation is by no means a safe bet. The safe bet, rather, is to assume that a union, when viewing a pot of money, is going to look for a substantial -- and ever increasing -- piece of it. It is unlikely to take long for the "new revenue- sharing model" to be subverted by greed, which is pretty much the way things have always operated in a market economy.