How much of an economic impact did Broadway make in 2008-2009?

For 15 years, The Broadway League has been measuring our industry’s impact on the NYC economy.

This year, the League changed up how these figures were calculated (much like how the League changed the publishing of our grosses and attendance a year ago).  Previously, the impact only counted money spent by those people who came to NYC “primarily to see a Broadway show, or extended a trip made for another purpose in order to go to a Broadway show.” The reason for the change was to account for the incredible increase in out-of-town visitors (especially the international crowd).  In the 1980-81 season, 69% of our audience was from outside of NYC.  In the 2008-09 season, this figure was up to 81%.

So, to get a more accurate reading, the League now asks visitors to rate Broadway’s importance in their decision to come to NYC on a scale of 1 to 10, and then counts the 8s and above as a “Broadway Tourist” and studies their spending habits.

This more quantitative approach produced a much higher, and I’d argue more accurate, account of what the economic effects of our industry really are to this city.

The results of this year’s report?

In the 2008-2009 season, Broadway’s economic impact was approx $9.8 b-b-b-billion dollars.

To quote the Executive Summary of the report:

“This amount was comprised of direct spending in three areas: spending by producers to mount and run shows ($2 billion); spending by theatre owners to maintain and renovate venues ($51 million); and ancillary purchases by non-NYC residents who said that Broadway was an important reason in their coming to New York City ($7.7 billion) (“Broadway Tourists”).

Those are some serious bucks, don’t you think?

What’s more interesting to me than Broadway Tourist spending is that Producers alone are directly responsible for initiating over 20% of this impact, spending over $2 billion on the production of shows.

Shouldn’t the city, the restaurant industry, the Taxi and Limo Commission, the hotel industry, and so forth, be tripping over themselves to help us with promotions, marketing, tax incentives, and so forth to inspire us to produce more?

To read the release from The League, and to learn how to get a hard copy of the report, click here.

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Merch madness means you’re mad if you don’t have merch.

I’ve worked on some stinkers of shows.

And you know what?  No matter how short the run, we’ve always sold some t-shirts.

T-shirts and other pieces of merch are social proof badges that audience members can showcase in their own communities which elevate their status.  How high that status goes depends on the show and the value of the brand (Wicked = high, In My Life = low).

Thanks to the high price of theater tickets, getting a buyer to tack on a $20 t-shirt is easier than in other industries (how many times have you seen a merch stand selling $20 t-shirts outside a movie theater?).   Some merch buyers may subconsciously want to demonstrate to the public that they were able to afford that ticket.  Others may feel the need to demonstrate how passionate they are about a show.  (Theater has a way of creating some passionate people.  Need an example?  Watch the YouTube of Jared’s Broadway Musical Museum Apartment below.)

In other words . . . Got merch?  If the answer is no, then get it.

I don’t care how big or small your show or your theater is, you should have a merch line.  You don’t have to have a perfume line, but at the very least you should have a t-shirt and a button (I always advise merch sellers to have at least one less-than-$5 item for the budget-conscious consumer that still wants to buy).

Profit margins for merch are high, so take advantage of it.  A Company Manager friend of mine once worked on a flop that ran out of money before the show finished its run.  He had no money in the bank to load-out the show!  How did he pay the crew for the load-out?  He paid them in cash out of the merch sales . . . and they got everything out and everyone paid.

Thanks to the plethora of t-shirt sellers now available to you online, and to the low minimums now required for purchase (check out CafePress for the simplest of stores), it’s truly possible for everyone to make money selling merch . . . and that money can be used to offset your production and operating costs.

Which begs the question . . . if merch is almost always a money maker . . . why do Broadway shows outsource the merch to companies that only pay them a royalty?

Shouldn’t shows work the small startup costs necessary to operate a simple merch company into the capitalization of a show?  Isn’t that ancillary revenue stream a good diversification for the show and therefore a benefit to the investors?

I think you know the answer.

Get Your Show Off The Ground Seminar – SOLD OUT!

Thanks to the 20 folks that snatched up the slots at the GYSOTG Seminar (try and pronounce that with me . . . guy-sought-g).

For everyone else that wanted to get in, I’m sorry but we are sold out.

We are still taking waiting list applicants, however, in case any of the 20 have to back out.

If you want to be on the waiting list, email my assistant asap at melissa@davenporttheatrical.com.  The waiting list will be treated on a first-come-first-served basis, so email asap if you still want a shot at the January seminar.

Because there was such a terrific response to this seminar, I am planning a second one to take place in a warmer month.  Think June . . . pre-Fringe, pre-NYMF, pre-your big success.

Thanks again, and all you folks that did get in . . . see you on January 23rd!

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Don’t forget to vote for the 2009 Producer of the Year.

Make sure you cast your vote by Sunday, December 27th at 8pm.

The winner will be announced here on the blog, on Monday, December 28th.

VOTE NOW

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