No business like show business: An MBA culture elective is producing innovative ideas for the arts sector

The NT Live screenings of Rory Kinnear's Hamlet in November and Derek Jacobi as King Lear on 3 February at a cinema near you trace their origins to the MBA programme at Cambridge Judge Business School.

David Sabel, an actor from the US, was working as a chef in Paris when he decided an MBA was the route to take back into the theatre. "I wanted to get into the production and management side but knew that I would need some basic business skills," he says. "Judge's MBA programme is almost the only one with a focus on culture and the arts. I was immediately attracted by their open attitude to my rather oddball CV. They said 'That looks interesting' instead of querying why on earth I would want to do an MBA. The atmosphere was creative, and the students were diverse – there was a former television producer and other media industry people but also doctors, lawyers and journalists, which made a stimulating mix."

Dr Allegre Hadida has run a culture, arts and media management elective at Cambridge Judge Business School since 2000, attracting partners including Channel 4 and the Britten Sinfonia. She says: "Our students get a lot out of working with arts and cultural organisations, which are very different from the usual case studies, and our partners also benefit. Developing a case study about your own organisation forces you to think about what is going on, which can sometimes be painful."

Bringing together the business and arts worlds removes misconceptions says Hadida. "A certain classical musician took part in a workshop here and was terrified that the business students would be like participants in the television series The Apprentice, so he was delighted to find that they were humans and not caricatures."

A popular part of the arts and management elective is a creative workshop run by Richard Hytner, deputy director of Saatchi & Saatchi. When Sabel attended in 2008, he discussed the New York Met's live opera broadcasts with Hytner. Afterwards, he was asked by Nicholas Hytner, who is artistic director of the National Theatre and Richard's brother, to do a feasibility study for his MBA project on broadcasting theatre performances live into cinemas across the UK.

As a result, Sabel was offered a one-year contract to set up NT Live, and he launched the most innovative use of theatre technology so far this century. He is now head of digital media at the National Theatre, and the project is creating remarkable records – a single audience of 50,000 worldwide for the screenings of Phedre and History of Art, performances screened at 360 venues in 20 countries, with current audience figures of 250,000.

Despite its worldwide success, NT Live and Sabel haven't abandoned their connections to Cambridge Judge Business School. Becky Schutt, a Judge MBA graduate and lecturer in the culture and arts management elective, designed an NT Live case study together with Jeremy Newton, chief executive at The Princes' Trust. The Judge MBA students did a presentation to Sabel and his colleague Emma Keith in 2010. "It was very useful to get the business students' perspective" he says. "NT Live was at a critical point; we knew it was a huge success but still losing money, though we'd budgeted for that. I had to explain some of the issues in the arts world to the students like the complicated areas of copyright and artists' arrangements with the unions. Given this insight, the students looked at how to maximise value when you don't have flexibility in negotiations."

Sabel found the mix of experience and backgrounds in the class brought interesting and innovative ideas to the project. He says: "They all picked up on the fact that the key to the model was scaling up distribution. Once you're on satellite you can go to more cinemas and increase your revenue, because your costs are high but fixed. They also spotted that the biggest business opportunity was in the US."

Julie Zhang was one of the Judge students involved in the presentation. Her background was in finance and, until joining the elective, she had never considered the arts as a future career. "For the first time I saw the cultural arts from a business perspective," she says. "We took the business theory and applied it in practice to a case study in real time. Some of the ideas that we advocated, such as going worldwide with the brand and attracting younger audiences, are already being implemented. It's very rare and incredibly rewarding to see that your ideas are valued and taken on board by a client."

Schutt finds that the NT Live case study makes the point to a group of students with mixed backgrounds that the arts are facing the same issues as other organisations. "Globalisation and customer and market development are challenges that our students will grapple with wherever they work," she says.

Sabel provides a useful role model for the Judge students, says Schutt. "He's a wonderful Judge success story, and shows that you can be an entrepreneur even in a large organisation, creating a department from scratch, as David has done," she says.

Jeremy Newton came to Judge from within the arts sector. "My previous job was running RADA and I love working with students. The arts sector doesn't have a very good career development structure in this country, and I was keen to help Judge nurture the next generation of arts leaders," he explains.

"NT Live didn't start out to be profitable but, in a world of significant cuts in the arts, the students brought a sharp sense of financial reality. The benefit of this type of partnership flows in both directions, the MBA bringing value and the arts sector repaying that in spades by contributing insights and learning."

Sabel agrees that, as a client, he has benefitted from "having sharp minds who were hungry to work on a real project using their ideas and skills. It was exciting to see them really passionate about contributing to a ground-breaking innovation in the arts."