Isabella and Vocalisters:
Repertory opera can exist and has been successful in The USA. Center Opera in the Twin Cities, later renamed Minnesota Opera operated on this principle for many years, especially while they were yet an avant garde company that specialized in organic stagings of works in the common repertoire and the commissioning of new works. A cast of singers was selected, usually at the Opera American auditions in New York and those selected were paid a monthly salary which include housing or housing allowances for a period of 7-9 months. During that time 4-6 operas were performed but not on a revolving basis (that is, each opera was given a series of performances than closed and another was opened).
The casting was based on the operas chosen for the season. This required some careful planning to select a season of shows that could be done with the same basic singers. But, and this is a big but, local singers were also included in these casts and often had leading roles. This greatly expanded the available cast and was a major boon to local singers.
For the first 5 or 6 years all performances were given in the Guthrie Theatre in Minneapolis (seating about 2200) which has a thrust stage and no orchestra pit. The orchestra was positioned back stage, behind the scenery but not amplified. Scenery was specially built to allow the orchestra sound to be projected acoustically but the orchestra could not be seen. Three large monitors were placed such that the singer-actors could seem them from any position on the 180 thrust stage but they were not visible to the audience. The singers saw only the conductor in the monitors. It was an easy stage to act upon because there was no need to "fake out" and one could move through a 180 degree angle while singing. Needless to say, interaction between singers was automatic and natural.
The company during this time was managed by John Ludwig with Wesley Balk as the Artistic Director and Philip Brunelle as Conductor and Music Director. It was opera that was amazingly alive and theatrically oriented without a diminishing of the singing performance. Many of todays successful singer-actors had their beginnings in this company. But it was not star opera. One did not go to the performances to see famous singers. The audience enjoyed the promise of a well rehearsed (usually 6 weeks), collaborative art that is the promise of opera as it was originally intended.
The fact that opera is now longer very interested in this approach is not a denigration of the approach but rather a kind of dumbing down of the potential of the art form. Minnesota Opera has changed its format. It now is little different that many regional companies who aspire to a B level of the star opera approach as is found in many European secondary houses and is a system that has even been exported to South Korea.
There are many ways an opera company can be organized. I do not think the time honored, short rehearsal, imported singer approach is the only method that can work. I know from personal experience that theatre and music theatre and opera can be amazing performing mediums that can become a source of performance energy for everyone in the community.
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