The focus of everyone in the theater industry over the past few weeks has been on two questions:
- When will Broadway come back?
- And when Broadway comes back . . . will our audience come back with it?
These are vital questions, of course . . . but there is another super important query that hasn’t been discussed yet.
- Will the Broadway Investor come back?
Broadway is a collection of small businesses. And except for a few movie studios and the non-profits, all of the shows are funded by individual investors. It’s because of said Broadway Investors’ passion and appetite for the arts (despite the enormous risk) that everyone who works in the theater has a job. Period. From Producers to Performers to Writers to Ushers to Ad Agencies to Reporters. Everyone’s salary is paid by the Broadway Investor.
So, if those Investors don’t come back . . . well, I think you get the point.
Will they or won’t they? And since almost every person on the planet has less money now than they did three months ago, will our investors have enough capital to risk? Will Producers be able to raise enough to fund a $15mm, $20mm, or $30mm production??? Would the money for groundbreaking productions like Hadestown, Dear Evan Hansen, or even Hamilton been raised in a post-pandemic world?
And if the box office for Broadway goes down (which it’s going to), then the risk of investing in Broadway goes up. So if our industry has suddenly become higher risk, and our investors have less money than they did, what do we need to do to make sure they continue to invest?
These were the types of questions that I’ve been asking myself as I have been trying to sleep at night. They are the same questions that have turned my hair a wee bit grayer (as you can see poking out from underneath my hat on my livestream.)
Which brings me to this blog. See, whenever I have anxiety-inducing questions that I don’t have the answers to, I just ask the people who do have the answers.
In this case, that means asking actual Broadway Investors.
So that’s what I did.
I sent out a short survey to actual, real-life, Broadway Investors . . . both my own, as well as people who I know have invested in Broadway shows, but have not invested with me. I also enlisted the help of some of my peers who sent out the survey to their investor list.
And while I’ve surveyed Broadway Investors before, I was unsure of the response rate we’d get. I mean, let’s face it, there are more important things for a lot of folks to think about right now than investing in Broadway.
Shows you what I know, because we had a tremendous response . . . double my usual survey response rate . . . which yielded a sample size of several hundred Broadway Investors. (The high participation rate also shows you how passionate Broadway Investors are about Broadway.)
Ready for the results? Here they are:
RESULTS OF THE BROADWAY INVESTOR POST COVID-19 PANDEMIC SURVEY
First, we started with some demographic info to get a sense of who the Broadway Investor is, where they are, etc.
1. What is your age?
2. What state do you reside in? (Only reporting the top states)
District of Columbia (DC), Maryland, Ohio, Pennsylvania, & Virginia….1.35%
This info is fascinating by itself as it gives you a glimpse of where our money comes from. Obviously, how these specific states bounce back from Coronavirus will affect the individual investors’ propensity to invest. So get to it, California!
(And by the way – you can see that the Broadway Investors’ whereabouts coincide with the whereabouts of the Broadway ticket buyer – proving what we all know but sometimes forget – the Broadway Investor IS the Broadway theatergoer.)
Ok, back to the survey. Now that we determined who we were talking to, we got into their investor history . . .
3. How many shows have you previously invested in?
4. On average, how much do you invest in each Broadway show?
As you can see, once a Broadway Investor gets the bug, there is a tendency to keep investing. Over half of the respondents invested in more than SIX shows . . . so far! But, because they like to play the volume game (which also diversifies their investments), an overwhelming majority (almost 75%) keep their investments under $50k. And in addition to diversifying their Broadway Investment portfolio, they also get to more opening nights. 🙂
Now we started to get to the pandemic-related investing questions in the survey:
5. Before the pandemic, how likely were you to invest in Broadway in the next 12 months?
Not very likely…27.19%
6. Now how likely are you to invest in a Broadway show in the next 12 months?
Not very likely…50.00%
Ok, here is when you start to see the effects of the pandemic on an individual’s willingness to invest in the short term. A startling 20% were DEFINITELY going to invest in a show in the next year, and now that has decreased to just over 2%. Yikes. And the DEFINITELY NOTS are the reverse ratio, with now 25% saying there is nothing that can be done to get them to invest in the next 12 months.
And 75% of those polled are in the “not very likely” or “definitely not” categories compared to 31% before the pandemic.
Not so good. But are you surprised? Everything people like to do, whether that’s investing or eating out, will be done with much less regularity in the post-covid world.
More questions . . .
7. If you were to invest in a Broadway show in the next 12 months, how much would you invest?
Same as my average…38.53%
More than my average…0.92%
Less than my average…26.61%
Depends on the production…33.94%
8. Before the pandemic, what types of shows were you investing in?
Revivals of plays…24.77%
Revivals of musicals…38.79%
Depends on the production…33.18%
9. Post-pandemic, what types of shows will you consider investing in?
Revivals of plays…12.02%
Revivals of musicals…21.15%
Depends on the production…67.79%
Looking at what they’ll do in the future, I was genuinely surprised to see that the majority would either continue investing their usual amount, or would vary that amount depending on the opportunity. My takeaway? Investors are going to be looking for value.
You can get the same takeaway from the types of shows they say they will be interested in investing in post-pandemic. Many have lost their passion for one category and stated that the type of shows they will invest in will depend on that production itself. The show with the most value will win.
10. Complete this sentence: After the pandemic, investing in a Broadway show will be…
Just as risky as it was before…28.44%
Obviously I knew what the answer would be here . . . but I asked it anyway because I was more interested in the percentage of people choosing the “just as risky” option, which, honestly, was higher than I expected. There are some optimists out there!
And now . . . here comes the literal money shot question of the survey.
11. Which of the following would increase the likelihood that you would invest in a Broadway show in the next 12 months? (You may check more than one)
Less expensive production costs…54.72%
Less expensive weekly operating costs…54.25%
Obviously a vaccination is what will get the world spinning again, not just Broadway.
But most likely, the folks reading this blog aren’t going to be able to control when we get a vaccine. That’s why we need to focus on what we can control.
Which brings us to the 2nd and 3rd most popular answers to this question . . . over antibody testing or even economic recovery . . . decreasing our costs.
And it makes sense. Because when an industry’s risks go up, the savvy investor (which is what we obviously have here), doesn’t just run for the hills, never to return . . . they say, “Show me you’re doing something to balance this increased risk, and I’ll come back.”
And that, all you Broadway Investors out there, is something we can control.
So, overall, what do I think now that I’ve done this survey?
Well, some people might look at all of the above responses to this survey and get depressed. I didn’t. In fact, after seeing these numbers, I am JUST starting to sleep at night (the hair isn’t going changing back from grey, however).
What I see in the data above is that the Broadway Investor will return . . . we just need to make it more valuable for them. They see it as riskier. We immediately make it less risky by reducing the costs (as they are asking for), and by doing what our job has always been . . . to find them great shows by great writers with great actors that they can’t NOT invest in.
It’s not going to be easy. It’s going to take all of us working together. But this is not only what our Employers (aka Broadway Investors) want, but it’s what they need to keep playing our now even higher-risk game.
And if we don’t, well, a whole bunch of us might be looking for new jobs.
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Interested in learning more about investing in Broadway shows, including how it works, as well as more strategies to reduce the risk and increase your return? Click here to get the bestselling and only book on the subject.
P.S. Join me and tonight’s guest, Kerry Butler, on The Producer’s Perspective LIVE! tonight on my Facebook page at 8pm EDT.