Financial Dilemma And The Reform Path About The State-owned Troupes

Those state-owned performing arts troupes bearing the traditional cultural resources, whose development without considering demand for many years, not only increase the burden on the government but also cannot inherit and spread Chinese culture and art. So, promoting development through reform and building organizations suit to both the law of market and cultural products’ characteristics in production and consumption, is an important premise and foundation, which is also the key. But, the results of the reform are local and limited, it has not been able to find a suitable development path. Thus, how to deepen the reform so as to build the long-term mechanism to adapt to the performing arts is an important problem.Foreign researches show that the rising cost of the labor expenditure and the lack of young consumer groups caused by the lagging productivity are two major obstacles that restrict the development of the performing art. Therefore, seeking external donations and cultivating audience actively have become important topics in the development of the performing art organizations. This determines that the performing arts organizations need form and purpose different form the general production enterprise. International practices show that the non-profit organization is the basic form, in order to accept external donation, enjoy preferential tax, and bear some public performances and art education service at the same time.Under the constraint of the history and the system, China’s performing arts organizations are facing more severe financial difficulties, whose degree of financial distress is more serious. It has not been able to find a suitable development path since the exploring of the reform for more than 30 years. Over the past two years, with "turning into enterprises"as the core, the reform has not made substantial progress. It’s difficult for those State-owned art troupes turning into enterprises with which more serious loss of the talent also has been caused. So, is it right to push them to the market completely and turn into profit-making enterprises who are responsible for their own profits or losses? What kind of development system is compatible?Then, with the financial dilemma as the basic problem and the fundamental obstacle of turning into enterprises, exploring the formation and response as well as considering the reality of our country is the key to find the path about how to deepen the reform.This paper analyzes the formation of the financial dilemma of the performing arts organization from the perspective of supply and demand respectively. In the side of supply, the inward oriented incentive mechanism of production, the failure of the income distribution mechanism within the original institution and the existing dual system issues are reasons about the low supply efficiency of the troupes. But, the inherent lagging productivity and the negative effects followed is the internal reason for the cost problem, which results the high cost of supply compared with the general cultural products. In the side of demand, changing preferences, deficient consumption capacity and addictive consumption characteristics make the performing arts’demand price lower, which is inconsistent with the supply.Appling the 4C’s theory, theoretical hypothesis are put forward. Using panel data model and comparing with the folk occupation groups further, we get some conclusions. First of all, the costs especially those personnel costs caused by productivity lags are direct reasons behind the financial dilemma of performing arts groups. Second, we do not support the new stadiums. Third, the lack of effective market demand in a long time restricts the development of the performing arts at the root, which becomes the bottleneck of the development. Fourth, compared to the government-affiliated institutions, enterprise system can stimulate the internal vitality, increase their profitability and then improve their economic status. Fifth, whether from the subsidy or from the consumer perspective, the development of the performing arts depends on other industries’development and is influenced by the size of the local opera cultural resources. In these circumstances, turning into profit oriented enterprise organization thoroughly and completely is not a good way to choose now. It defines that the state-owned troupes’reform needs a different way from those Industrial and commercial classes, considering the performing arts’production and consumption features, current situations and the reality of reform problems as well as the requirements. Performing arts organization’s development needs of others except itself, especially the government and the social forces. The paper gives two suggestions, push forward the reform steadily based on demand cultivation and take non-profit organization model to further deepen the reform in the niche areas.Comprehensive consideration of the human capital accumulation’s characteristics and the demand status, it is found that the large number of non-profit organizations is the result of the adaptation to the development. Especially in environment of less demand, the non-profit organization and the profit organization make an effective division both in the labor market and in the product market and jointly support the development of performing arts. Through the comparison of the performing arts’development model of United States and Western Europe, it is found that perfect funding system, relatively loose management environment, demand oriented art supply organization and perfect corresponding laws and regulations are the basic environment to ensure the healthy development of the performing arts. It also shows that the non-profit organization has advantages compared with the public organization.With comprehensive analysis of the non-profit organization’s advantages and our country existing system’s dilemma in performing arts, it is considered that as a special organization of modern enterprises, the non-profit organization attracts physical capital and human capital into those production areas which have large social value but small economic value and then completes the non-profit products’ supply through the market. Having outward oriented incentive mechanism of production, good autonomy and modern contractual relation between organization and employees, the NPOs can solve the problems within the old ones, which help to improve the efficiency of supply, cultivate the demand and improve the talent incentive mechanism, so as to solve the problems after turning into enterprises.So far, the reasons for financial dilemma of performing arts have been summarized systematically. Considering the characteristics of human capital accumulation of the performing arts, market demand conditions and international experiences, the non-profit organizations between public and private sector are consistent with those limits. With understanding of Chinese existing art organization model, reference to non-profit organization and unify the standard of supporting system are put forward so as to deepen the troupes’ reform.