Could a Broadway show learn from Uber and Postmates?

In the past few weeks, two online companies, Uber & Postmates, did something that no company likes to do . . . they cut their prices.

Companies usually drop prices for two reasons:

  1. They believe that a lower price will sell more of their product or service so profit margins will increase.
  2. They are in a price war with a competitor.

What interested me about both of these companies’ recent cuts was that they got press out of it.  And we all know press sells stuff.

So that got me wondering two things:

  1. Would the press care if a Broadway show cut prices?
  2. Would the cut sell more tickets to the show and increase the show’s profit?

The truth is, Broadway shows have cut prices before.  But we just don’t tell anybody about it.  If we see a section isn’t selling (usually the middle section of the house – top price sells, bottom sells, middle sits) we make adjustments.

But what if a show came out with a big announcement like Uber and said, “Hey, we hear you, we’re going to cut our prices.”

Would it get press?  Yes, if it was a big enough decrease.

Would it make more money for the show?  Trickier question.

First, it’s important to realize that Uber and Broadway are two very different types of companies.  Uber doesn’t pay its drivers unless Uber is getting paid – our industry ain’t like that.  Same with Postmates.  So they can be more aggressive, in an effort to acquire customers and take less profit in the short term with the hopes of getting repeaters in the long term.

That brings up difference #2 between our industries.  Our industry isn’t built on repeaters.  We acquire customers with the hope that they’ll get their friends to come, not to get them to come back (because most just don’t).

So right away, that’s two strikes against playing this kind of pricing game.

But wait . . . don’t give up just yet.

I do think this strategy could work.  But, like most Broadway promotions, it would depend on what show used it.

I’d take a show that was several years into its run.  A show that was already proven to audiences.  A show that had already made money for its investors.  But maybe a show that was starting to fade away, in light of all the new, sparkly shows opening each season.  A show that could use some press.

Take a show like that and announce a “We hear you.  Broadway shows are expensive.  So we’re cutting prices,” and yeah, I think you’d see a lot of people come out of the woodwork to see the show . . . as long as there was already interest in the market in seeing that show.

And, after it worked . . . you could always raise your prices back up later on . . . because you know Uber will.

 

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Comments
  • Carvanpool says:

    Hahaha hahaha!!!

  • Kay says:

    Cut the price on a “fading” show ?
    If I loved the show…I’d come back and bring a friend/child to share the love !
    If I didn’t have the yen to see it before…….I’m from the burbs…I’d look at it again.
    Think it’s a winner of an idea !
    Now if you just do something about the parking…

  • Carvanpool says:

    Is Kinky Boots fading?

  • Debi says:

    I think ‘Fun Home’ has organically created a new way for audiences to interact. The cast calls the after show “stage door” meetups – Act 2 (since it’s a 90 min show with no intermission). Perhaps there could be Act 3 meet ups once/twice a week where audience can take photos with cast, tweet with them – upload on Instagram. Humanize the cast. If they have a mascot or something beloved back stage – like a favorite pet or stuffed animal or sacred glittery boot – that could be a running meme. It’s all about the memes created by cast interaction with audience.

    Hamilton has got it down with Ham4Hams. Having a fun event all in the name of the ticket lottery and then pushing it up to a dedicated website or YouTube channel is an amazing idea. Other shows should take note of this.

    Backstage live cams during Wednesday Matinees – like they did with An American in Paris.

    Take a page from National Theater in London with NTLive type cinema live shows where you have simulcasts in multiple cinemas around the country. Then package the live to tape performance for SVOD platform.

    I’m borrowing ideas in the above, but I think some shows are already creating new ways of interacting with audience and bringing them back to the theater.

    On a personal note – I’d love to get a notification via theater WiFi that a digital version of Playbill is available for download. ePlaybill?

    How about an smartphone app for each show?
    -Periscope type feeds pre-curtain on certain days.
    -Video of cast raving about fave restaurants and sights around town – maybe do 10 minute segments.
    -Cast backstories – yes – a Podcast would be great.
    -Cast member blogs
    -Promote various cast appearances in cabaret or concert
    -Incentive for out of towners: Easy where to park Info, discount on parking
    -Selection for souvenir, program, tee-shirt purchases, Samuel French book orders for script of play/musical, tickets for future shows, gift certificates – so you can order anything from your fingertips.

    Would love all that on the phone – whether it’s specifically one app for one show – or it’s a Broadway app covering all shows on and off B’way.

    General Incentives (included on app or online):

    Provide cross promotion with MTA subway, Metro North, LLIR for theater traveler discounts, hotel & restaurant discounts and possibly airline discounts to get out of town bums on seats.

    Okay – I’ll shut up now.
    Thanks for listening!

  • Carvanpool says:

    Gee, it’ll be just like Disneyland.

  • Ed says:

    A quirk of live theatre is that, unlike Uber, our capacity is capped at the number of seats in the house.

    If we accept the premise that “decreasing price will increase the number of tickets sold proportionately more than the price decrease”, then we must be certain that the theatre can accomodate for the extra number of tickets sold.

  • man and Van says:

    Hello! I should say thank you for the article.
    I enjoyed this post.

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