Abstract

The ability to transform an organization into the digital era is particularly challenging for an organization with an almost 150-year-old history such as the Berlin Philharmonic Orchestra (BPO). Balancing on the one hand the respect for history and tradition with the ambition for renewal and commitment to quality on the other, the orchestra managed to be the first major player in its field to become digital in 2008 with its Digital Concert Hall (DCH). This chapter analyses the antecedents of the BPO’s successful digital transformation. It can be explained through the shared leadership and democratic governance models, as well as adherence to the core values and mission of the organization.

Keywords: Digital transformation, Shared leadership, Berlin Philharmonic Orchestra, Digital Concert Hall.

1. Introduction

It’s a democracy, of course. They choose their own director and take it very seriously. It’s not just a question of likes and dislikes. No, they think very hard about what the future will bring or could bring. That’s very important.

(Sir Roger Norrington, conductor; The Berlin Philharmonic Story)

The Berlin Philharmonic Orchestra is one of the best symphony orchestras in the world (BBC, 2020). It’s also been called the world’s “most democratic musical venture” (Gapper, 2015). The key question is, how is it possible that this democratic orchestra founded in 150 years of tradition succeeded to be the first and most successful in its digital transformation?

In order to understand the success of the Berlin Philharmonic Orchestra’s digital transformation, it is important to understand the interplay between tradition, shared leadership and the quest for quality. As Peter Drucker once said, “culture eats strategy for breakfast”. Consequently, any strategy for digitalization that is not deeply rooted in the culture and tradition of the orchestra will not be successful. It is therefore essential to embed a digital strategy within the prevailing culture in a way that utilises the existing strengths and traditions in the organisation. Furthermore, a major change such as digital transformation needs to push the boundaries of the existing culture.

In the case of the Berlin Philharmonic Orchestra, digital strategy grew out of the orchestra members’ recording tradition, pool of ideas, its ways of working and its deeply held values. At the core of this process, however, is its model of shared leadership and its governance structure of the orchestra. Without them the digital transformation would not necessarily have been successful. This conclusion is supported by recent research, which indicates that “more democratic leadership styles [and] higher levels of coherence towards the firm’s mission” explain advanced levels of digital transformation (Porfírio et al, 2021).

This paper examines the two main building blocks, or rather the preconditions, for the digital transformation of the Berlin Philharmonic Orchestra. The digital transformation in the BPO case is operationalized as the launch and operation of the Digital Concert Hall (DCH), as it is among the very first systematically digitalized symphony orchestra experiences in the world, and a very successful one according to several sources.

2. The Path to Digital Concert Hall

The epitome of the orchestra’s digital transformation, the Digital Concert Hall, was launched in 2008. However, building the foundation for digitalisation started years earlier, mainly due to two major trends. Firstly, at the turn of the millennium, signals of a declining interest and consumption of classical music were clearly visible. This was seen in the decline of classical music broadcasts on both television and radio, drops in audition licences, as well as a major downward trend in sales of classical music recordings. Broadcasters nationally and internationally were moving to popular music, limiting the opportunities for people to enjoy classical music. Secondly, existing technologies and formats for music recordings were under threat. Music streaming services were entering the market. Digital music, including MP3, mobile phone ringtones and streaming services, started growing from early 2000, and surpassed physical media (mainly CDs) finally in 2014 (Smith, 2014). Consequently, the Berlin Philharmonic Orchestra were thinking about their response to these negative trends.

Music recordings have been a long tradition at the Berlin Philharmonic Orchestra, as they entered a partnership with Deutsche Grammophon already in 1913. Entering the turn of the millennium, the orchestra had a media unit headed by Olaf Maninger, the principal cellist. After reviewing the above-mentioned negative trends, the orchestra’s partnerships and own resources, Maninger asked in 2006 “What if it were possible to listen to the music of the Berlin Philharmonic Orchestra when and wherever you want, live and in CD quality?” Making this vision a reality was not easy to achieve back in 2006 from a technical point of view. Internet streaming standards and live recording techniques for classical music were still in their early stages. For example, encoding technology still had open issues, and filming with normal auditorium lighting posed challenges to the video quality. Maninger considered the idea and the various aspects that need to be thought through, with his colleagues in the orchestra meetings. In general, they liked the approach to improve the recording technique and to build a second performance opportunity for the orchestra. From the beginning, the whole project was only conceivable due to the special legal form of the Berlin Philharmonic Orchestra. It had to be coordinated in detail with all involved stakeholders again and again, including the transformation of the media unit of the BPO into an incorporated company, the Berlin Phil Media GmbH.

In 2008, the Berliner Philharmonics made a considerable effort to bring classical music to its audiences and expand its reach with its Trip to Asia tour. The ambition was not only to play a series of concerts, but rather to find out how to better connect with audiences in Asia. Thus, in addition to the concerts, lectures and music workshops were organised at various stations on the tour. These were delivered by individual musicians from the orchestra itself. Through the tour, the Berlin Philharmonic Orchestra became cultural ambassadors for their own tradition performing the music and their strong self-understanding.

The audience resonance to the concerts was overwhelming. In fact, every single concert was sold out and the orchestra started to broadcast the concerts via high resolution screens outside the concert hall. Consequently, thousands of spectators were able to listen to the concert, including people who could not afford to buy tickets. The great response to the concerts in Asia, and especially among young people, was, according to Olaf Maninger, once again a true encouragement and an inspiration for the DCH project.

3. The Governance and Leadership Models of the Orchestra

3.1 Governance

The governance form of the Berlin Philharmonic is a public foundation. The democratic principle that guided the creation of the orchestra is followed in the orchestra’s organization. The musicians form different committees, and these committees are responsible for different areas of functioning of the orchestra.

The orchestra has selected two chairmen and two media chairmen to represent them in the Foundation Board (executive committee). This board comprises, besides the chairmen mentioned above, also the artistic director (i.e., the chief conductor) and the general manager. It is worth noting that the general manager is the only non-musician in this board. The role of the general manager is to focus on the business development and marketing of the orchestra, while leaving all the artistic issues to the members of the orchestra.

The Foundation Board is responsible for the artistic direction and the strategic plans of the orchestra. They report to the orchestra membership full session meetings and to the Board of Trustees.

The Board of Trustees of the Berlin Philharmonic Foundation has ten members and includes the deputy chairman of the Orchestra Academy, the chairman of the Friends of the Berlin Philharmoniker e.V., a member of the Personnel Council, an elected member from the Berlin Philharmonic and four politicians: The Mayor of Berlin, the Minister of Culture and Media and two members of the House of Representatives.

The Orchestra Committee is a sounding board for the two chairmen of the orchestra. It is formed by five musicians. The Personnel Council is formed by seven people and it has no artistic role. It oversees personnel and working-conditions issues, including non-musician staff members. The chief conductor is also the artistic director of the orchestra. He is responsible for his own programs, and whereas he has some influence in the programs of guest conductors, these are always agreed with the Foundation Board.

The members of the orchestra make the decisions concerning recruitment and retention, including the artistic director and general manager. The audition process is made without a curtain and totally inclusive, having each member and the artistic director one vote. There must be a majority vote of at least two thirds of the members for the acceptance of a new member. The chosen member has to pass a two-year trial period. The election of artistic director only needs a majority of votes.

The orchestra has a self-rostering system employed by each section. Tutti-players decide where they wish to sit in the section for a given program freely and often quite spontaneously. However, they do organize themselves, and independently determine their free time, not needing to ask for permission from the artistic director or any other committee. The artistic director is not allowed to determine seatings. This system reinforces creativity among the musicians that can learn from each other and get new ideas. Every member is considered to be of equal quality and therefore, equally capable and interchangeable. (Lehman, 1999)

Decisions in the orchestra are made democratically. All main decisions are taken to the main orchestral meeting. In those meetings, every member of the orchestra has one vote, including the artistic director and the chairmen. Before voting, everyone has a chance to be heard. Then the decision is taken up for a vote. In most decisions, a majority vote is required for a decision. A particular case is the permanent membership in the orchestra, normally after a probation period of a maximum of two years, where a two-thirds majority vote is required.

3.2. Shared Leadership

In the Berlin Philharmonic, leadership is not only associated with the orchestra’s chief conductor such as Herbert von Karajan, Claudio Abbado, Sir Simon Rattle and Kirill Petrenko today. Nor is it the exclusive property of the Chairman of the orchestra or its General Manager. Instead, following the democratic principle and tradition of the orchestra, leadership is spread across the organization. This splitting of leadership responsibility requires a new conceptualization of this specific type of leadership. Attempts at such conceptualizations include shared leadership (e.g. Pearce et al., 2007; Ropo & Sauer, 2003), relational leadership (e.g. Carson et al., 2007; Cunliffe & Eriksen, 2011; Dachler, 1992; Fairhurst & Uhl-Bien, 2012; Koivunen, 2003), aesthetic leadership (e.g. Hansen et al., 2007; Ladkin, 2008), rotating leadership (e.g. Davis & Eisenhardt, 2011), collaborative leadership (e.g. Furu, 2012; Kramer & Crespy, 2011) and leadership as co-creation (Birkinshaw, 2013) to denote the interaction between the appointed leaders and those who are led. In the case of a symphony orchestra the focus has often been on the conductor and the musicians. However, as evidenced by the BPO, leading and managing the organization is fundamentally a shared effort. Different members of the organization, be they artistic or administrative personnel, take on different roles depending on the situation. Thus, shared leadership appears to be a more meaningful concept in explaining the leadership processes that are practiced in the Berlin Philharmonic Orchestra.

In a world of increasing competition and declining recording industry and plunging public funding (Lehman, 1999; Lee, 2012), there is a strong need for novel, creative, and even daring choices in programming and physical and digital offerings. How this change and renewal can be accomplished in an orchestra with strong culture and tradition is the focus in this study. According to the new conceptualizations of leadership, the responsibility for the change and renewal must be shared within the organization.

Some of the recent literature has drawn a more varied picture of leadership in orchestras, where many, if not all, members of the organization carry responsibility for leadership. This is related to some of the new emerging conceptualizations of leadership as the shared activity between the leader and those being led (e.g. Pearce et al, 2007). In this view, leadership is a process and a set of activities, instead of a hierarchical position or even a structured role. What this means is that any member of the organization not only has the right to initiate leadership actions, but it is the responsibility of all members of the organization to do it. In this chapter, we will examine this type of leadership concept in the context of the Berlin Philharmonic as a basis for its digital transformation.

4. Digital Transformation – Digital Concert Hall

The digital transformation of the orchestra has been a collaboration effort. Initiatives have originated from all parts of the organization. The Digital Concert Hall has helped transform the orchestra into the digital era. The idea came from the musicians, not from top management or external consultants. The DCH and the creation of their own recording label is for them a logical step to become independent from the uncertainty and demands of major music records. Musicians consider the creation of the DCH a way to reach new audiences, not only in the sense of reaching people that are not physically present where they play, but also new generations that are used to digital media. There are ideas, that musicians put themselves online in chat rooms periodically to keep in touch and engage their audience. These are not all the new initiatives brought about by musicians in the Rattle era, but they do reflect the musicians’ interest in engaging new audiences, new formats and embracing technology. (Müser, 2015)

In the Berlin Philharmonic Orchestra, the digital is seen as a new business unit within the organization. The Digital Concert Hall and the employees within it seen themselves as a start-up within an established 150-year-old orchestra:

“The Digital Concert Hall is still a huge adventure; we have by no means exploit its full potential. The response from the audience, which was highly gratifying from the very beginning, has increased even more. The technical conditions have also developed in our favour worldwide. Internet technology is becoming easier and easier to use. That suits us very well. Because we don’t only want to address technical experts, but all people interested in classical music who want to visit our virtual concert hall without major hurdles. The artists we work with also support us in the long term. So, the enthusiasm of the start-up phase has by no means dropped”.

(Maninger, 2011)

 5. Organizational Solution – Digital Concert Hall

The Digital Concert Hall is managed by Berlin Phil Media GmbH, which is one of the two fully owned subsidiaries of the Berlin Philharmonic Foundation. In line with the tradition, the culture and the shared leadership model of the organization, the managing director of the company (Berlin Phil Media) is Olaf Maninger, who is a member of the foundation board and, very importantly, also a musician playing in the orchestra.

The key to creating, developing and integrating new ideas for the orchestra is rooted in its democratic decision-making culture. One musician expresses this as: “We are the Berlin Philharmonic. Conductors come and go, but the Berlin Philharmonic remains.” (Dierks et al., 2008) “It is fundamental within the 150 years of tradition”, says another musician. The orchestra runs meetings with all its members on a regular basis. In these meetings, not only can any person suggest an idea, but it is an expectation that orchestra members come up with initiates, ideas and opinions. Only a simple majority is needed to proceed with a suggestion. When it comes to a project like the DCH, the decisions need a number of iterations, such as developing the idea, technical requirements, the clarification of the broadcasting rights, the consent of the musicians to be filmed and a binding legal form for the new format/business venture. These steps are elaborated by the initiators and then again voted on at the orchestra meeting. At times it might happen that an idea fails at the end, rendering all the work that has been done unusable. Fortunately, this was not the case with the DCH, as it became one the orchestra’s greatest success stories.

From the beginning, the strategy of the DCH was clearly oriented towards a business model that offered content for a fee. At the time, the “pay-per-view” trend was starting to grow in popularity on the internet. When the DCH started in 2009, however, such offers were still rare. In the meantime, more and more providers moved towards charging for formats that go beyond a certain basic amount of information. As the BPO saw themselves as the benchmark for the highest standards, customers having to pay for accessing premium content was easier to argue for. Therefore, from the very beginning, the Berlin Phil Media marketed the DCH as a stand-alone offering, where customers would get access to their product which was classical music performances of highest quality.

In the beginning of 2009, however, it was difficult to estimate how many customers could be attracted and converted to subscribers. As more technical hurdles were overcome, the number of visitors of the DCH continued to grow. Tobias Möller, the head of communication and marketing, said: “Subscriber numbers have increased significantly, especially since the beginning of this season. One reason for this is certainly that we have completely revised the DCH and greatly simplified its functionality. Our ticket system has also changed. After the season subscription had proved to be rather cumbersome, the twelve-month ticket has now become our most important offer.” (Möller, 2011).

Today, the DCH is a real technology company (Maninger, 2021). The DCH opened its third TV production studio with the 4K video standard. They have developed their broadcasting resources to accommodate viewing of and listening to the concerts on practically any device. The amount of data at play is enormous. For example, in a Beethoven symphony, broadcasting the music requires 26 playback audio channels, such as iPhone, iPad, Android, Computer and even low range quality such as stereo 5.1. and mono. To accomplish that has required the constant and determined development of the technology since the start of the DCH (Maninger, 2021).

6. Outcomes of the DCH

In addition to providing access to the concerts for audiences all around the globe, the DCH developed several new features throughout the years. For instance, they started a “behind the scenes” series, comprising of interviews with solo artists, members of the orchestra, the conductor or composers who wrote new pieces of work for the orchestra. Therefore, the various formats are a strong communication channel, which provides deep insights into the activities and understanding of the orchestra. Visitors of the DCH can sense both the tradition of the orchestra, represented by the enormous archive – spanning the early recordings of the BPO e.g., of Abbado or Karajan, himself an early adopter of high-quality recordings to modern works – and by how the orchestra renews itself. Expressing the renewal dimension of the BPO, its former Chief Conductor Sir Simon Rattle said “we have to play the new, it’s part of our mission” (Dierks et al, 2008).

The increasing amount of material in the DCH has also another important outcome in the field of music education. The archive is heavily used by music education institutes. Music students, including instrumentalists, conductor students and composers, can study a wide range of classical music and the differences in interpretation in great detail. Therefore, the DCH not only offers the past and the tradition of the orchestra, but it also sets standards for quality and for how the future of classical music can develop. In this respect, the DCH may be the most influential trendsetter worldwide.

Reaching the undisputable market leader position in the field of classical symphony music in the digital sphere is due to the fact that the BPO started early with this project. It has had ample time to develop the technology, the content, the audiences, and the business model. The DCH is currently the benchmark for classical music digital offering. The unique characteristic of the DCH is that it created not only its own streaming service, but in the process, it also became independent from major music labels, such as Sony, by founding their own label “Berliner Philharmoniker Recordings”. Thus, one major outcome of BPO’s digital transformation was the removal of one step in the value chain, i.e., the record companies, and becoming its own producer and distributor. Thus, with the DCH, the Berlin Philharmonic Orchestra has remained true to one of its original principles of retaining the highest possible degree of independence.

 7. Customers

For the DCH, Germany is still the largest market with a share of almost 30 percent of total sales, says Tobias Möller (Hanssen, 2020). However, the remaining over 70 percent of the customers are internationally spread, making the DCH a genuinely international enterprise. The DCH has around 17 percent of customers in Japan, followed closely by the USA and other European countries. Japan is known for the Berliner to be an important market for classical music. There are some stories about time zone challenges. When a concert starts in Berlin at 8:00 p.m., it is 4:00 a.m. in Japan. Despite this challenge, some hard-core music lovers sit down in front of the computer even at that time. For the majority of users in Japan, however, the live experience is not meaningful. Understandably the geography places challenges for a truly global realtime service offering. Therefore, customers are able to access the recorded versions of the concerts through the archive of the DCH, where the number of items grows week by week. Contrary to many other types of services and events that can be accessed by customers after the fact, the recorded concerts and other recordings are valued highly by the customers long after they were recorded.

8. Social Media

Social networks are the most important communication channels for the BPO when acquiring new customers. Their audio-visual material is suitable for the social media channels. In their YouTube channel, DCH places 3-minute video clips that also link to Facebook and Twitter. There is conscious effort in building the social media community for customers and prospects. The head of communication and marketing Möller says: “We often find that we have an incredibly informed audience. For example, there are questions about an unknown horn player who had filled in as a substitute. Or there are intense discussions about Bruckner conductors.” (Hanssen, 2020).

Social media is especially important in reaching out to the new younger audiences. According to Olaf Maninger, the YouTube community is an important target group: “Tech-savvy, young creatives who are also interested in classical music. A virtual orchestra of young people is basically also exactly in line with the objectives we want to convey through our education programme”.

9. The Effect of Corona

Global orchestras like the BPO leave huge carbon footprints due to touring extensively. Since the outbreak of the COVID-19, these trips have been cancelled. Consequently, COVID-19 has become a catalyst for thinking about classical music, digitalisation and environmental protection. Olaf Maninger said: “We said goodbye to city hopping years ago, especially on intercontinental tours. What used to be normal, giving only one concert in each place and then flying on to the next country, sometimes covering several continents on one tour, we don’t do that anymore. But we still want to be live for our fans all over the world. But our goal must also be to leave an artistic footprint. By staying in major cities for several days, playing at least two concerts, realising education projects, making chamber music, opening our rehearsals to local students, teaching at local universities. This is how a trip can have a lasting effect, this is how a real cultural exchange can be started”.

The BPO see their engagement live and digital as a both-and attitude. First of all, they are a live performing orchestra. Nevertheless, the BPO clearly sees the DCH as an additional service and a strong distribution channel. This became obvious when the orchestra had to close the analogue concert hall and opened up the digital one for everyone free of charge for a short period. In the first three weeks of free access, the DCH had over 700,000 new registrations, compared to the usual 10,000 per month. The concert recording is always just a tool for connecting with the audience. “Ultimately, nothing beats the experience in the hall, even I say that as the managing director of the Digital Concert Hall”, says Olaf Maninger.

 10. Conclusions

Looking back, among symphony orchestras globally, the BPO has been a pioneer in the digitisation of concerts. This is clearly demonstrated by the comparable quality with other orchestras that switched to livestreaming in Corona times. The BPO succeeded in establishing their own aesthetic form of documentation and the highest technical standards.

The BPO controls its own media marketing via the DCH. Not because they want to leave the classical media. The classical media are abandoning classical music. Even public broadcasters prefer to show pop songs rather than Mozart. “Symphonic music is no longer the great cultural mission in this world”, says Olaf Maninger.

In conclusion, the BPO has managed a successful digital transformation by overcoming the dilemma of changing itself while sticking to tradition. In fact, it is by managing this very dilemma that have led to their success. The key factors that underlie this success are the following:

• The shared leadership and democratic governance model. The decision-making power lies within the orchestra itself, and initiatives come from all parts of the organization. The orchestra allows initiative-takers be in charge of making sure that those initiatives become reality.
• Deeply held values. The key to resolving the dilemma of tradition and stability vs. renewal and change is to let cherish the strengths and let organizational members take responsibility of carrying it forward.

“The point about a real tradition is to take what is the strongest and vital part and carry it into a new world where all are searching for what that is.”

(Dierks et al, 2008)

• Focus on quality. The Berlin Philharmonic Orchestra is one of the best symphony orchestras in the world. Every member of the organization has a desire to maintain the level of artistry in all aspects of the operations. When it comes to going digital, the orchestra does not want to compromise on quality, because it would not fit its 150-year tradition.