Be Careful! Your Competition Is In The Same Room!

There are 3 advertising agencies that handle the bulk of Broadway business. 

3.

In the 2005-2006, Broadway season, there were 39 new productions on Broadway.  There were also 32 continuing productions from the previous season.

71 shows.  Handled by 3 agencies.

Divided equally (which they are not), means that each agency handled an average of 23.67 shows.  In reality, 2 of those agencies handled the majority of the shows.

To demonstrate a huge practical problem associated with these numbers, let’s look at the four nominees for Best Musical in 2007:  CurtainsGrey Gardens, Mary Poppins and Spring Awakening.

All FOUR of these musicals were represented by the same advertising agency.

That means that Tony campaigns, sales figures, etc. were all discussed, strategized and planned in the same house. 

So when you’re doing your next show, you should understand that your meetings will probably be held in the same conference room as your direct competition.

Can you imagine if Microsoft and Apple were handled by the same advertising agency?  And shared a conference room?  Or Coke and Pepsi?  Or even small hometown grocery stores?   

It’s not even smart business to consider these facts before making your choice of your agency, it’s just common sense.  I’m not insinuating that anything unethical is happening at any of these agencies, but with millions and millions of dollars on the line, why would you take the chance of all that information under one roof?  Even the most ethical and honest employee would have to be subconsciously influenced with the knowledge of what one show’s competitors are doing, wouldn’t you think?

In other industries, companies refuse to allow their advertising agencies to rep competitors.  Duh. 

I know what people will say: “Ken, the reason there is so much overlapping is because there isn’t enough consistent work to go around to keep these agencies running.”

I disagree.  23.67 shows is a lot of commission.  And besides, I’ve seen the sizes of each of their offices. And conversely, I’ve seen the sizes of all of the Producers’ offices in this city.  The agencies don’t need to take on this much work.

But this isn’t their fault.  They are just growing their business.  We’re the ones ignoring the reality and allowing these practices to continue.   

The other argument is that there aren’t enough qualified advertising agencies in business.  This may be true. 

Anyone out there want to hang a shingle?

Or better, maybe producers should start doing advertising in-house. 

Turning An Angry Customer Into An Ally

Everyone knows that the modern consumer likes to speak up and bark back at big business.

Here’s a fun way that one of the Kings of American media buyers used that to their advantage.

Truth is . . . I only like half of the execution of this campaign.  But the unexpectedness of the idea is brilliant.

Do you like it?

News flash: Numbers can talk!

In addition to using the numbers we crunched last week to create a budget that increases your odds of success, here’s another simple use:

One of the hardest things for producers to do is to say “No.”  Who wants to say no when a director, a designer, your child, or anybody asks for something?  Believe it or not, we would love to be able to say “Yes” to everything.  Unfortunately, it’s our job to say no when the request doesn’t assist us with our  #1 responsibility.

So, whenever possible, I let my numbers say no for me.

There’s no arguing with numbers.  While artistic tastes may vary, numbers are not ambiguous.  They are indisputable (as long as they are from reputable sources and triple verified).  I find this most helpful during negotiations.  And the great thing is, it’s not a negotiating trick or tactic.  It’s not a game.  It’s just the truth.

For example, with my Backed-In Budget (my name for designing a budget based on what the  market is bearing), we know the average length of a run for a Broadway revival.  So use it.  When an agent asks for something that doesn’t fit in the model, say, “Did you know that since 1984, the average run of a musical revival was only 51.59 weeks” and so on, using the statistics for average attendance and ticket price and so on.  Most likely, the model for your production will be higher than the average, so you’ll be able to tell the agent that you’re already above and beyond what the market is bearing, so there is no way to justify additional expenses.

Here’s what I predict will be the response, if you’ve done your homework:

Silence.

Because there is no response to the right set of numbers.

Want a practical example?  When I was negotiating contracts for Altar Boyz and an agent or someone asked for something that didn’t fit in the model, my response was, “If you can tell me the name of an Off-Broadway book musical that recouped its investment in the last 10 years, I’ll give you double what you want.”

Silence.

There’s a bet I knew I wouldn’t lose.

Again, it wasn’t a tactic or me trying to bully anyone.  It was the unfortunate truth.  To make it up to the people who were making sacrifices for the show we bonused them with a portion of profits post-recoupment.  We kept costs down trying to get us to this seemingly impossible feat, and if we got there, everyone would win . . . and most likely they will earn more than they wanted in the first place. 

And we’ll get to recoupment.  I’m going to make damn sure that no other Producer can use that same question in a future negotiation.  Sorry, guys.  🙂

Even if you think you’re a great negotiator, always let the figures talk first and last.  Because numbers are the best negotiators.

My Mission Statement And Yours.

Exceed expectations.

When you exceed people’s expectations, you become exceptional by definition.

And people, whether that’s your audience, your husband, your boss, etc. will have no choice but to talk about you and respect you.

In fact, exceeding expectations is the best way to prevent people from becoming your ex-audience, ex-husband, or ex-boss.

Bears vs. Bares. Part II

This just in …

Crunching more numbers provided by The Guru of Statistics at the  Broadway League,  Neal Freeman,  the average paid admission to a revival of a musical in the 07-08 Broadway Season is . . . . drum roll please . . .

On second thought . . . let’s play a game.

Pick one:

A. $73.76
B.  $53.51
C.  $61.01
D.  $69.61

The answer will be revealed at the end of this post (no cheating).

But the answer isn’t as important as what you do with it.

Now that I know what the market is bearing in terms of ticket price, AND what kind of  shelf-life  I can expect, I can start to build a proper budget that is based on reality, not fantasy.

As my shrink once told me . . . it’s ok to fantasize, as long as you know you’re going to be ok if the fantasy doesn’t come true. For example, I will be ok if Winona Ryder doesn’t go to my high school prom with me (that was my fantasy in 1990, but you get the point).

Well, if a budget based in fantasy (with higher than average ticket prices and higher than average attendance figures) doesn’t come true, your investors are NOT going to be ok.  They’re going to have lost a lot of money.  And you’ll lose investors.  Which means you’ll produce less shows.  Which means the world will not be a better place.

D. $69.61

And if you’re curious, the average paid admission to a revival of a play is $55.67.

When you think about it, what the market bears, is similar to what the market bares.  By looking at the hard numbers, you’re looking at the industry naked.  No Versace or Marc Jacobs dressing it up.  Just cold flesh.

Unfortunately, it’s not always good naked.  Happy Holidays!

 

Happy Holidays!

Ken Davenport
Ken Davenport

Tony Award-Winning Broadway Producer

I'm on a mission to help 5000 shows get produced by 2025.

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