A Whispered Broadway Milestone No One’s Cheering

May 28th, 2014 § 21 comments

hundred dollar billIt’s a funny thing about milestones, the way certain thresholds get set in our minds. If you follow reporting on the movie industry, breaking the $100 million gross barrier is a major achievement (and for those of us in the arts, an astronomical figure), although its not always connected to the cost of the film under discussion. But that number has been a yardstick for years, once cause for double page ads in Variety whenever it was reached, regardless of whether the movie that achieved it was released in the 60s, 70s, 80s or today – despite inflation making the success happen a little faster with every passing year. To be sure, plenty of movies still don’t make it, but it’s a less rarified club than it was in the days of The Sound of Music or Star Wars.

Once upon a time, when people still spoke of the price of a loaf of bread as an economic indicator, gas prices crossed a big threshold when a gallon broke over the $1.00 price point. People under 40 may not even remember this being breached. This was a big deal in those non-digital days, when prices couldn’t simply be altered with a tiny bit typing; I happened to be in England a few years back when the price of a liter of petrol broke the £1 mark, resulting in some creative solutions to signage that never anticipated announcing such a sum.

nickelby playbill cropIn theatre, in my lifetime, the big round number that sticks in my memory was the $100 ticket for The Life and Adventures of Nicholas Nickleby, though it could be explained away by the massive physical production, cast size and length. It seemed a one-off as opposed to a trend-setter. Miss Saigon had $100 tickets at the start of its run, but didn’t sustain them, dropping back to the then more typical $65. The $100 price cropped up again for the 1999 revival of The Iceman Cometh, which by virtue of its length, simply couldn’t give enough performances in a week to make economic sense otherwise. You may know of other isolated instances.

iceman playbill croppedWe didn’t truly reach the $100 asking price per ticket milestone until The Producers introduced the $100 ticket in the wake of rave reviews, also giving us the innovation of the VIP ticket at the extraordinary price of $480. This was in 2001, just 13 years ago. At the time, other hits were quick to match The Producers, with Mamma Mia! jumping to $100 per ticket just two months later.

But it should be noted that the $100 price was the theatre equivalent of a hotel’s “rack rate,” the stated top price for rooms which were in reality variable and negotiable. In theatre, through group sales, discount offers, the beloved TKTS booth and day of show lotteries you could still see a Broadway show for much less than that. As a result, over the past decade, while regular prices have risen, especially at the most successful shows, the average price paid on Broadway stayed under $100 per seat. That is, until last year, the just-completed 2013-14 Broadway season, when the average ticket was $103.92, up $5.50 over the year before.

So while articles may be trumpeting record revenues and record attendance, they’re either downplayingavoiding or ignoring the true breaking of the $100 threshold, preferring to lead with the allure of numbers in the millions (attendance) or billions (dollars). That’s a shame, because in terms of what matters to the average audience member, the average ticket price seems much more essential news. To me, that’s the headline.

the producers playbill croppedIt’s always important when discussing prices over time to acknowledge overall price changes in comparable fields or the economy as a whole. So let me point out that in the period since The Producers in 2001, the Consumer Price Index has risen from 177 to 233, an increase of 32%. The average movie ticket price nationally has gone from $5.65 to $8.13, a jump of 44%. But the Broadway jump from $58.72 to $103.92? That’s an increase of 77%.

I don’t have the resources to analyze all of the factors contributing to that jump, beyond the prevalence of premium or VIP seating, along with hit shows with higher prices that don’t need to discount (The Book of Mormon and Wicked) and superior supply and demand management (The Lion King). Maybe Nate Silver and his Five Thirty Eight team could work on this and tell us whether there’s a valid economic underpinning, or whether its just naked supply and demand having its day.

But surely if Broadway price hikes outstrip the economy and even other entertainment options, Broadway will eventually reach a tipping point that could have an impact on the already dicey economics of producing and running shows. Purchasing decisions based on price could put even more shows at risk for sustaining an economically viable run, whether in theory, as a Broadway engagement is contemplated, or even once it’s up and running.

So I want to call out this pricing milestone for all to see, and wonder where it will lead our commercial theatre yet a few more years down the line. If price resistance takes hold, if the Broadway price-value equation tips too far with the former outweighing the latter, will it be a place where shows can only be smash hits and utter flops, with no mid-level performers managing to run? If that happens, I hope it will prompt more people to sample institutional and independent theatre, here in New York and elsewhere. But on Broadway, and indeed at every level in the arts, ticket pricing is our global warming crisis, steadily rising year after year without raising true alarm and provoking meaningful action, until it threatens to swamp us all.

 

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§ 21 Responses to A Whispered Broadway Milestone No One’s Cheering"

  • Kyle Lemieux says:

    Howard,
    Thanks for the great post. As an interesting addendum to this article, the AEA actor Broadway minimum in 6/01 was $1252. Today it is $1807. If wages had increased 77% to correlate with paid admission the current AEA actor min. would be $2216. I’ve not looked at other Broadway unions.

    • Howard Sherman says:

      Terrific info. Maybe other people reading this post can contribute relevant data for other capitalization and running costs, to paint a more complete picture.

      • Kyle Lemieux says:

        The average ticket price for NYC sports based teams: NY Knicks $132. NY Giants: $292. NY Yankees $52. Least expensive Michelin 2 star restaurant in NYC, Marea $99 for a prix fixe dinner as least expensive option. Relative to these options Broadway comes into clearer context.

        • Kyle Lemieux says:

          I was wanting to bring to attention, as you so smartly mentioned in your article, the cost to the average theatre goer. At the end of the day all NY based so called “high-end outings” are costly and have essentially become like a vacation, an annual splurge. The question then becomes what are the implications both real and imagined of the economic forces exerting itself on us culturally?

  • Jasper Taylor says:

    There are so many shows on broadway that I WISH i could see — but I can’t afford theatre, so I’ve dropped the hobby. I’ll get rush tickets at the Public and NYTW and Playwrights. And I’m not getting on those lottery lines at 8am, I’m an old man!

    • Howard Sherman says:

      Seeing shows at just those three theatres you mention gets you into a lot of great theatre. You haven’t dropped the theatre hobby, just the Broadway habit.

  • Robert Wildman says:

    Remember that NICHOLAS NICKLEBY was a cycle of two full-length plays, and the entire cycle was only performed four times a week. So that “$100 ticket” was really two $50 tickets (though admittedly you had to buy both of them), so it wasn’t as radical of a barrier breaking as it sounded like at the time.

  • Angry Joe Papp says:

    Thanks for bringing this to our attention – the issues you raise are vital. They also bring up a host of other questions worth asking. Here are a few I can think of:

    1) How much do increases in average ticket price (ATP) reflect increases in the cost of doing business? How much do they reflect the fact that consumers are willing to pay more for a ticket (i.e., increased demand inelasticity)?

    2) How have increases in ATP affected audience demographics? Do higher average ticket prices mean that Broadway is now catering to a more affluent audience? Or have producers simply become better at price discrimination?

    3) How have dramatic increases in Manhattan real estate values affected the cost of running a Broadway show? How much have theater rents increased relative to ticket prices? It seems unlikely that in increases in real estate value would not be reflected in the rents that theater owners charge. We hear a great deal about the increase in costs of union labor, but to my knowledge the Broadway League releases no data on the cost of the theater to the production.

    4) Non-profit theaters have become significant players as both Broadway producers and landlords (sometimes simultaneously). How have the ATPs of non-profit B’way productions compared to those of commercial productions?

    5) How do we find the data (and an economist with the requisite know-how) we would need to answer these questions?

    • Howard Sherman says:

      Many of these questions are the ones I hoped this post would provoke. Unfortunately I don’t have the time and resources to answer them myself, much as I wish I could. But if my piece gets shared broadly, perhaps there are journalists, economists or for that matter students who will go beyond the press release and resulting stories which prompted me to write and analyze these aspects more deeply.

  • DangerMouseBen says:

    re: the tweet, which matters more, absolutely the price of the ticket matters more to me. I have cut back considerably this year and over the past few years. I used to have 4 theatre subscriptions (Roundabout, Playwrights, Second Stage and Vineyard) I now have one, Vineyard, because I get a great deal on “membership” at Vineyard and the tickets are affordable. Also, I feel the shows I was seeing at the other three theatres were hit or miss and many times the season had a lot of stuff I didn’t want to see so now I take my chances on TDF and, rarely, the TKTS booth (even half price is expensive and sometimes they sell partial view at TKTS for outrageous prices). I will do rush if it’s something I REALLY want to see but even rush is getting “stupid”. I’ve done the lottery (calling it a rush lottery doesn’t change the game, it’s still a lottery) and grew tired of it quickly. Many times I can’t do rush because it’s a “student” rush and I’m not in school. I also hate the fact that in trying to lure younger/student audiences to the theatre the marketers have ignored older, middle class/working class theatregoers. Just because I’m over 35 or I’m not a student doesn’t mean I can afford $130 or even $75 a ticket to see a show. I resent the attempt to bring in younger people (I don’t resent the younger people) with discounted prices at the expense of everyone else.

    • Howard Sherman says:

      Don’t forget Signature with their $25 flat rate for all patrons, which is one of the best deals in town, and some of the work in The Public Theater’s Lab series, at only $20, has been quite terrific, most notably Richard Nelson’s Apple Family plays.

      • DangerMouseBen says:

        You’re right, I forget about Signature unless I get a mailing. $25 per ticket is a steal nowadays.

  • Mike Klein says:

    When I took an economics class in college an explanation was provided for this. Over time, wages in general tend to rise because workers in most fields become more productive. Unfortunately, it is difficult for those who work in the performing arts to increase their productivity very much, but they still expect their wages to rise with everyone else’s. This results in prices that increase much faster than overall inflation.

  • Joe says:

    I believe that the rising price of tickets is indeed supply and demand at play, but I also believe – strongly – that the relative inelastic demand for theatre tickets is far from inevitable, and that at some point, we’ll start to see a change.

    We have to remember that audience capacity has barely budged for decades; despite a few dark weeks here and there, the number of seats available is pretty much the same every night, year after year. As wealth increases, so will prices. And because an increasing majority of ticket buyers are tourists, who may rank the importance of seeing a Broadway show quite high on their list of plans, there’s probably quite a lot of inelasticity, as tourists are going to be less price sensitive during their annual vacation, than locals.

    But those tourists are only 65% of the Broadway audience. You’ve also got your $100,000+ earners (and there are a lot of them, according to the Broadway League), who will also be unlikely to base their decisions entirely on price. They’ll pay to see the show of their choice, and more to see it from the location that they choose, with only some regard to price.

    And then there’s the rest of the audience. Those audience members will definitely base their decisions on price – if not for a single ticket, than over a number of tickets. The audience may not shrink by much, but the price that they’re willing to pay most certainly will. After all, the average ticket-buyer is willing to pay more than twice as much for a ticket to THE BOOK OF MORMON as they are for any new musical that opened in the past 12 months.

    The result is that Howard is right: we’re going to see Broadway winners and losers, with nothing in between. Worse still, the winners will run and run, holding onto a large share of the market (and dollars) for years on end. Would anyone have thought that the average ticket to WICKED would cost 250% more than it did on opening night – ten years later?

    Competing on price for a smaller and smaller share of the audience is a zero sum game. Like everything and everyone else in the American economy, we’re seeing a race to the bottom for the strugglers, in which winners will excel, and everyone else will fight for the scraps.

    • Joe – many insightful points here. A few quick responses:

      1) Your analysis in the first two paragraphs feels right – particularly about tourists being less price sensitive. I wonder if the data (if it exists) backs this idea up.

      2) “You’ve also got your $100,000+ earners…”

      Boy do you ever. According to the Broadway League’s report on audience demographics in the 2012-2013 season (http://ow.ly/xr0m6). the average household income of theatergoers was $186,500. For comparison’s sake, the median household income on the US for the same time period was around $50,000. Of course, median household income of theatergoers would have been a more interesting statistic as it would give us a clearer picture of the income brackets of theatergoers.

      3) Going back to Howard’s original post, we have just finished a season of record revenues but NOT of record attendance. IAccording to the League’s data (http://ow.ly/xrrwh), attendance has been pretty stagnant for the past 10 years. In fact, four seasons since 2003-4 have had higher attendance than 2013-14. In the same time period, US population has increased by 10%. This all suggests that B’way is now catering to a smaller and more affluent segment of the population.

      4) Two stats that would be really interesting:

      - What is the maximum possible attendance on B’way in a given season (if all seats were filled in all theaters for eight shows a week)?

      - The League’s numbers only go back to the 84-85 season. But how does that compare to attendance figures prior to the doldrums of the 1970s? What were attendance figures like in the ’30s, ’40s, ’50s, and ’60s?

  • […] A Whispered Broadway Milestone No One’s Cheering —Howard Sherman “So while articles may be trumpeting record revenues and record attendance, they’re either downplaying, avoiding or ignoring the true breaking of the $100 threshold, preferring to lead with the allure of numbers in the millions (attendance) or billions (dollars). That’s a shame, because in terms of what matters to the average audience member, the average ticket price seems much more essential news. To me, that’s the headline.” […]

  • Carlo says:

    For this out-of-towner, one issue is the high cost of visiting New York for theater. I may be willing to pay the price of a Broadway ticket, but the cost of decent New York hotels ($300 to $500 per night) has become a real concern. And no, I don’t want to stay in New Jersey. So now I visit New York once a year in the off season (January) rather than several times a year.

  • JohnJPuruntong says:

    I’m done subjecting myself to robbery at the broadway ticket booth. I bought a 75″ LED tv and high-end home theater system. I know it’s a different form of entertainment but everytime there’s a broadway show breaking the news and I check the exorbitant prices, I rent a bluray disc, watch with beer in one hand chips in the other with the missus leaning on my shoulder. In my mind, I thank the producers for a wonderful evening. Thanks for jacking up the ticket prices, yo! ;-)

  • Greg says:

    It’s one thing to look at Broadway, which is largely commercial- while I think it’s a poor business plan for the long run to charge in excess of $100 for tickets, at the end of the day, if they are commercial ventures with the expectation of seeking profits, that’s their business.

    However, what I find truly appalling is when I see subsidized, allegedly “non-profit” theaters charging, for example, $350 for a ticket to see Macbeth at the Armory this month. And the Armory is an institution that receives city, state and federal monies- perhaps grant of public funds need to start coming with a requirement that ticket prices not exceed a certain amount?

    • Greg, the Armory’s $350 tickets are indeed appalling and completely counter to the whole idea of non-profit theater and public funding of the arts. Whatever its artistic merits, the Armory’s Macbeth is yet another example of non-profit theater as subsidized entertainment for the wealthy.

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