Who/What is fueling the Broadway Box Office fire?
Broadway has been on a good run.
According to The Broadway League Seasonal Stats, grosses have been up seven seasons in a row (in truth, one of those seasons remained flat – but hey, flat is not down!).
Unfortunately, attendance has not had the same run. In the same seven periods of box office growth, there were three seasons where attendance declined (not flat, but definitely down).
So yes, in 3 out of the past 7 seasons, people are paying more, but coming less.
You can see this growth in the graph below of the last ten years of data.
But honestly, the growth isn’t what is interesting to me. Why it grew is . . .
The first season of this seven season swing was 2008-09, which had a modest increase despite the economic downturn that began that same year. And then, slowly we emerged from the era of The Big Short and grosses started to climb.
Some people say that’s the only reason grosses went up . . . that we had a “dead cat bounce” from the very down market.
Think back to 2009 . . . that was also the year that Hugh Jackman and Daniel Craig appeared on Broadway in A Steady Rain . . . and people were willing to pay anything to see those two (one theatergoer I met on a beach told me she loved seeing those two on stage together, and when I asked her what she thought about the play, she said, “Who cares?”).
And thus, variable pricing (not just premium pricing, mind you) was born.
According to my research, it was about this time that many successful shows started to adopt the idea of changing their prices as demand warranted, just like our sister industry, the airlines. By the 2010-11 season, most hit plays were doing it.
That’s when everyone started doing it. Almost like it was a race to see who could come up with the highest average ticket price. Rumors surfaced about a group of experts deep in the Disney offices who spent all their time figuring out an algorithm to make them the most money per butt in seat. Shows started to do $2mm during holiday weeks.
And the grosses grew year after year, as you can see in that graph.
So if you want to know why we’ve been on such a run . . . it’s because of variable pricing, for sure.
I know, you’re probably saying, “But Ken, aren’t there more shows than there were? Isn’t that the reason?”
Yes, that is part of it. There was an average of 41.71 new productions in the last seven seasons versus 37.28 during the previous seven. It’s responsible for some of the growth. BUT, just like attendance, the number of new productions DROPPED four times during the last seven seasons . . . and as you can see in the gross graph, the dollars still went up.
And if that wasn’t enough, we did a little more data dissection for you.
We took apart the Broadway grosses and added up the grosses for the TOP FIVE performing shows every week. You know, the Wickeds, Lion Kings, Hamiltons, etc.
These five shows represent only 16.1% of the number of shows on Broadway. But they represent 34.0% of the total gross.
Our increase in grosses is a direct result of variable pricing.
So, as long as we keep producing mega hits (Frozen, anyone?) then I’d expect we’d stay on this path.
But the moment we don’t . . . the graphs will go the other direction.
(See what the grosses look like without those Top 5 in the graph below.)
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