What happens to a Broadway musical’s grosses in its 2nd year?

You’d probably guess that the answer to the question in the headline of this blog is, “They go down.”

But the question is, how much?

If Broadway Producers, General Managers, and Marketers knew that answer, wouldn’t we all make better plans for our all-important 1st year?  (Unless you’re a big ol’ hit, you’re most likely not going to recoup in that 1st year, so what you do in your 2nd year carries even greater weight.)  We could not only make projections, but, in an industry where expenses go up every year (union contracts, media costs, etc.), we’d have to find ways to keep costs down.

Those are the questions that bandied about in my mind as I put my crackerjack research assistants on the task of finding out . . . what happens to a Broadway musical’s grosses when it gets into its 2nd year?

First of all, it’s worth noting, that if you get into a 2nd year, that’s a good thing, since the average run of a new musical is just about one year.

But then things get serious.  You ready for our results?

My team and I looked at the 34 new musicals over the last 20 years that ran at least 2 years, and we discovered that, on average, these shows grossed an average of 7.4% less in their second year than in their first.

Bam.  And just like that we have a number. Just think of the things we can now do with that number, as a show rounding the corner of its 1st year into its 2nd?

Here are some other interesting factoids from our research:

  • 26 of the 34 shows grossed less in their 2nd year than in their 1st.
  • 8 of the 24 shows grossed more in their 2nd year than in their 1st.  Those shows were: The Lion King, Rent, Memphis, Aladdin, Wicked, Jersey Boys, The Book of Mormon, Avenue Q.
    • Note from Ken: one of the reasons why the 2 non-mega hits in this group grossed more in their 2nd year than their 1st is the timing of their opening.  Memphis and Avenue opened early in their season.
    • It’s not a coincidence that 6 out of the 8 shows above that grossed more in their 2nd year all won the Tony Award for Best Musical.
  • Other than Memphis, every show that made more money in its 2nd year than in its 1st ran at least 2,500 performances or is still running (Aladdin).
    • Note from Ken:  if you produce a show that grosses more in your 2nd year than your 1st, you can probably start looking at that house in the country.
  • Only 3 of the 26 shows that made less money in their 2nd year than their 1st ran at least 2,500 performances.
  • Of the 34 shows we looked at, 17 ran at least 3 years.
  • Every single show that made less money in its 2nd year than its 1st ALSO made less money in its 3rd year than its second.
    • Note from Ken:  once you start to drop, things aren’t going to get better.
  • In fact, only two shows (Lion King, Wicked) made more money in their 3rd years than in their 2nd.

You know one of the main differences between Broadway Producers and Movie Producers?

Movie Producers produce for an opening weekend.  They just try to get the biggest kick-off they can.  And then they move on.  Broadway Producers produce for opening weekend, and then the next weekend, and the 17th weekend, the 54th weekend, and beyond.  We’re in it for as long as we can keep the show going.

And numbers like the above should help you do just that.

 

(Got a comment? I love ‘em, so comment below! Email Subscribers, click here then scroll down to say what’s on your mind!)

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Comments
  • Irvin K says:

    This is amazingly valuable insight! I wish you’d data-mine more. For example, you split the data into shows that increased and decreased – so could we get the average increase and average decrease for the two groups? Could you then do the same for shows that won Best Musical (or Revival/Play/etc), and those that didn’t? I feel like if you had those pieces of data, you could actually create a viable prediction for a show’s grosses/longevity based on first-year gross.

  • Frank says:

    Going back 20 years will certainly give you a larger data pool, but it doesn’t give you relevant data. The theater of 20 years ago is certainly not the theater of today. Maybe data broken down into segments like: 5 years, 10 year, 15 years, and 20 years. Then more reliable trends can be seen and better understood in the context of the modern theater landscape.

    I would love to see the numbers you used to get “the average run of a new musical is just about one year.” Over the past 5 years there is no way this is true. Most shows are lucky to make 6 months, never mind 12 months. (If you exclude long running shows, looking at only shows opening in a given year, there is no way the average musical makes it 1 year.)

    Additionally, most shows that announce a recoupment, do so in about 11/12 months most of the time, so I don’t get your “most likely not going to recoup in that 1st year”. The shows not recouping are the shows not getting past the 6 month mark generally.

    • Rich Mc says:

      Agree, and the question of recouping of these respective shows, whether grossing more in the first or second year, was inexplicably omitted from the analysis. From investors’ standpoint, isn’t this the key issue?

  • Sally says:

    Is this why there are so many revivals? Because the show is written, staged and choreographed years before?

  • Hal Houston says:

    Actually, of the 8 shows you sited, only 6 won Best Musical. WICKED and ALADDIN did not win the Tony. The six that did win were: LION KING, MEMPHIS, RENT, AVENUE Q, JERSEY BOYS and BOOK OF MORMON.

  • Hal Houston says:

    WICKED and AVENUE Q were the same season. AVENUE Q beat WICKED for the Tony.

  • Carvanpool says:

    Who’d have thought that the biggest hits have grosses that hold up into their second year and beyond?

    Back testing doesn’t work with stocks or Broadway shows, stop wasting your time with this number soup.

    By the way, do you think the Hamilton repricing will have any impact on second year grosses?

    Booyah!

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