Digital Economy and Baumol’s Cost Disease of Performing Arts: An Empirical Research in China

Abstract

In the past decade, the Chinese government’s financial subsidies for performing arts troupes accounted for an average of 50.57% of their total income. By the end of 2021, China has 18,370 performing arts troupes and 3,093 performing arts venues. The research conclusions of this paper include the following four points: (1) Digital live-streaming theater(DLT) is an “innovation” for traditional Stage Theater(ST) performance, and its changes in creation mechanism, audience-actors relationship, technical esthetics and business model are worthy of further study. (2) Data from 2011 to 2021 show that Baumol’s cost disease also exists in Chinese performing arts. (3) The Chinese government has been reducing its direct management and control of arts troupes, trying to move toward “arm’s length” governance. (4) During the COVID-19 epidemic, performance case data from China show that DLT can indeed reduce the marginal cost, attract more young audiences, and increase performance revenue. However, considering the high technical cost input, whether digital technology can alleviate the cost disease of performing arts still needs more annual industry data analysis.