BROADWAY’S RECOVERY PART I: What Will It Look Like?

Since the pandemic began, Economists have been obsessing about how quickly the economy is going to bounce back after this sucker is over (or . . . over “enough.”)

Will we have a “V” shaped recovery?  Or a “U” shaped?  Or my favorite . . . a Nike Swoosh shape?

Since the pandemic began, Broadway Producers (including the one composing this hypothesis right now) have been obsessing about how quickly Broadway is going to bounce back.

My prediction . . .

Broadway is going to bounce back . . . and fast.

What’s unique about our industry is that it doesn’t follow any of the typical shapes of recovery because we went from 100 mph to zero in NO seconds flat.  We were grossing $30 million a week on Broadway alone . . . and then we were zero dollars the next week.  We slammed into a COVID-19 wall.

Even restaurants have take-out options.  Bands that can’t give concerts can sell albums.  Broadway shows?  We got nothing.  (Hint for next time – and there will be a next time, as I’ll talk about next week  –  all shows should be captured for potential streaming opportunities.)

So if I had to give our recovery a shape, I guess it would look something like this . . .

(FYI, I spent about an hour trying to figure out what to call that shape.  I tried everything from “Deformed Bucket Recovery” to “The Fishing Hook Recovery” . . . what would you call it?)

You can see that we had that immediate wall-smacking drop off on 3/12 . . . and of course, an immediate and completely 90% vertical BLAST OFF when(ever) our curtains go back up.

Now, the more interesting part . . . what happens AFTER that straight-into-the-sky return.  Well, you’ll see that I’m not predicting we’re going to start grossing $30mm a week like we were when we shut down.  For one, there will probably be fewer shows, which means less of a gross potential, never mind fewer tourists to see those shows.  (PS – That diagram above is definitely NOT to scale)

So we’re going to start off earning less than when we were.

How much less?

That depends on what I call The Three Ts:

  1. Testing
  2. Treatment
  3. TIME (How many weeks/months do we have from knowing when we can come back to the actual day we come back.)

Nevertheless, I do believe we will see a quick upward trajectory after we return.  (The stock market is having that sort of bounce – and believe it or not, we do tend to follow the dow’s chart, as I showed here.)

But my belief in a quick Broadway bounce back is not some hunch.  I have THREE reasons why I think we’re in store for a quick recovery.

What are they?

I’ll tell you tomorrow in PART II!

– – – – –









Tonight on the Livestream: I’m sitting down with Lynn Ahrens (Lyricist of Once On This Island, Ragtime, Anastasia) at 8pm EDT. You can now watch on my Facebook pageTwitter, Broadway Podcast Network’s Youtube channel, or Broadway On Demand.

Forget Broadway shows, what about Broadway readings, workshops, and more?

Over the last several months (!), the #1 question for the professionals working on Broadway and the avid fans of the best spectator art on the planet has been . . . “When can we see a show in a theater again?”

But there is another important question to be asked and it isn’t about what will be on Broadway when the lights go back on . . . rather what might fill Broadway theaters in the months and years after!

The best business people I know don’t focus only on what’s happening today . . . but they think about what is going to happen tomorrow.  That’s their job.  This is why stocks of companies that are losing millions of dollars can have exceptionally high values, because investors are betting on what WILL happen, not what is going to happen.

That’s why a company or industry’s health isn’t only measured on what product is being “produced” today (whether that’s diapers, drugs, or Broadway musicals), but what new product(s) are in the pipeline.

Broadway has had a pipeline so full over the last few years that it has been clogged with product.  I heard a rumor that before this whole corona-bologna happened, there were more than 30 (!) plays and musicals looking for a theater on Broadway this spring alone!

Will there be the same log jam now?  Will more theaters be available?

And if there are . . . my question is . . . will there be new plays and musicals ready to fill them?

See, Broadway shows aren’t the only things that are shut down.  So are readings, workshops, labs, and all the development work that goes into the creation of a new piece of theater.  I had four musicals that were set to debut in the next 18 months in February.  I still have four musicals set to debut . . . but they’ve all been pushed back. Not only because we can’t produce theater right now . . . but also because we can’t develop theater.

So the question so many Producers have been asking is . . . where will readings and workshops fit in the phased-reopening of New York City?

I keep thinking that a rehearsal of a reasonably sized musical would be similar to a medium-sized office reopening.  So will we be able to come back when mid-sized companies do?  Then again, there’s often singing involved in our readings.  And also . . . what if we wanted to bring in an audience?  That seems like a no-no.  I guess we could socially distance a reading.  Or work with smaller cast sizes (just work with principals, etc.).

Zoom readings and online development work can only go so far in a medium like the theater.  So while we certainly can’t commence this work tomorrow, I’m hoping that development can find a safe way to come back before our productions do.

Otherwise, we might have an empty pipeline . . . which would mean empty theaters.

– – – – –

Want to hear about what’s in our pipeline?  Click here to learn about the shows we’re developing.

P.S. And if you’re looking to hear directly from people in our industry share what they’re doing to keep creating during this time, tune into my Facebook page every night at 8pm EDT. Tonight, I’m going LIVE with Tony Award-winning Director, Des McAnuff (Jersey Boys, Ain’t Too Proud).

 

 

[Rant Alert] We’d be better off right now if we had only done this.

WARNING:  What follows is somewhat of a rant.

But please know this rant is directed at me too.  For I believe the things that we don’t get in our lives are no one’s fault but our own.  Blame the person in the mirror.  Because that is the only person you can control.

So here’s the thing . . .

Right now there are thousands of Actors, Stagehands, Writers, Designers, and all disciplines of TheaterMakers out of work.  They’ve got no money coming in.  Zero.

And with yesterday’s announcement that Broadway is out for another . . . well . . .  several months at the very least . . . things are going to get tough for a lot of those artists and fast.  My biggest fear is that many will have to give up on their careers in the theater.  It’s already hard enough to get a job . . . but what if there are fewer jobs?

I’ve got the same worry about our TheaterGoers too . . . just in a different way.  As I wrote last week (in what has become one of my most read posts EVER), the theatergoing “habit” for our audience has been broken . . . so we run the risk of our audience retiring as well.

Scary times, right?

But it could have been less scary.

See, the challenge for the economic model on Broadway is that its revenue streams are limited.  We’re all about getting butts in seats and the best price.  And that’s just about it.  And shoot, even when we can get audiences to show up, there are few ancillary forms of revenue (we don’t get any of that bar revenue, or ticketing fees, etc.).

The most successful businesses have multiple streams of income . . . not only does this generate higher profits when things are good, but when there is a crisis, you’re not solely reliant on one source of revenue.

Like we are now.

Ok, here comes the rant part.

One of the biggest, ‘virtually’ untapped resource for an additional revenue stream for Actors, Designers, Investors, Stagehands, and everyone who works on a show . . . is, well, a literal revenue stream.

Streaming.

This is a big “duh,” now . . . since there are bazillion Broadway streaming events going on every single night during the crisis.  We’ve got livestreams like mine, virtual Mother’s Day concerts, Andrew Lloyd Webber’s shows, and so many more a whole website was created to curate them!

But no one is paying their rent or their groceries because of ’em.

When Broadway was shut down I got about 147 emails from folks saying, “Ken!  What can we do to stream Broadway shows?!?!?”

That’s when I knew we @#$%ed up.  And big time.

This is when I really point this rant at myself.  Because I should have known that streaming wasn’t only important to our industry, but that one day it would become necessary.

See, I livestreamed Daddy Long Legs, back in 2015 and got over 150k people from 135 countries to tune in . . . with zero marketing . . . and NOT during a pandemic.  (You can see it now, here, by the way.)

But streaming that show was expensive and contractually cumbersome.  And every time I investigated doing the same things on other shows . . . especially big Broadway shows . . . the numbers just didn’t add up.  Producers were forced to spend way too much money upfront to have a realistic shot at recouping that cash.

And it’s hard for a show that’s struggling to build a NY audience to invest additional money in something that could be years away.  (It’s easy for Hamilton to do . . . . which obviously paid off.)

So I stopped pushing a new video-capture model for running shows.  And other folks in the biz stopped pushing it as well.  There were a few shows that popped up on a screen here or there, and there is, of course, BroadwayHD.  (But if you’ll notice – the majority of their titles are NOT Broadway titles – but London titles – where the rules and economics make more sense, or Off-Broadway, non-profits, or “others.”)

And the fact is . . . if I had pushed harder for a new model . . . had we all pushed harder . . . there could be dollars being earned by EVERYONE involved with Broadway shows over the past decade RIGHT NOW.

Shame on us.

See, you can’t wait for a crisis to come to have an epiphany.  You don’t start eating better when you have a heart attack.  You do it years before.

Instead, we just never thought we’d need this content.

So we didn’t do anything serious about it.

Bad on us.

Maybe we can now.

And it’s easy.

See, the problem with the model right now is that we pay an extraordinary amount of money to capture a production on video. . . even though filming that production may not require any additional work from everyone involved (they just do their usual show), and even though that content may never be monetized.  We’re paying a ton of money for an option to monetize it . . . and that monetization model is also extraordinarily high risk.

Why not allow all shows to be shot, and archived, for a minimum amount of money (if any), and then have the payments made if/when the shows are released.

Imagine what we could be giving to our TheaterGoers and our Artists right now.  (Hamilton is about to keep their buzz going big time when they release their movie on Disney+ in July.)

I call this the “Save The Stream For A Rainy Day” concept.

If the capture is used, the Producer pays.  If not, the Producer doesn’t.

And then . . . to fix the monetization of the content model, why not cut all the artists involved in a much bigger portion of profits rather than getting a flat payment, which would allow the unions and Authors to get “Bonanza Insurance” in case something really blows up online.  (Or give the Producer a choice – pay a high upfront fee on release or a bigger royalty cut.)

There is a way to figure it out and provide for another revenue stream that everyone in our industry desperately needed before all this happened.

And now?  Scheez.  I’m literally kicking myself.  K-I-C-K-I-N-G M-Y-S-E-L-F!

Ok, rant over . . . no more talking about what happened.

Now we just need to make something new happen.

– – – – –

You can see Daddy Long Legs for free here now, AND get this . . . I’m reuniting that cast on my livestream at 8 PM on May 21st!  Click here for more.

 

Broadway’s return isn’t about marketing. It’s about habit-ing.

While we don’t exactly know when we’ll be able to ‘light the lights’ on Broadway just yet . . . there’s already been a lot of discussion about how to get our audiences’ butts back in our non-socially-distanced seats.

“What do we say to our audiences?”  “When and where do we say it?”  “What incentive or offer do we need to provide?”

These are all classic marketing questions whenever you bring a product to market . . . but no one on Broadway could ever have imagined we’d have to ask them to figure out how we bring our product back to market.

All of these questions need answers, and I have it on very good authority (cuz I’ve seen the plans myself) that some of the brightest advertising and marketing minds on Broadway EVER are working on this challenge just as hard as the scientists all over the world are working on a vaccine.

And they’re going to crack it.  And I’m sure we’ll see a fantastic return to Broadway campaign . . . as soon as we know when Broadway is going to return.

That said, to return to the record breakin’ levels Broadway was pre-Covid, and to grow beyond them, we’re going to be required to be more than marketers . . . we’re going to need to be habit-makers.

Stick with me here . . .

If you’ve ever tried to make a change in your life . . . exercise more, eat healthily, stop smoking, etc., then you know, that kind of change is haaaaard.

That’s because what you’re doing is trying to create a brand new habit in your life.

And that’s like trying to turn the Titanic.

You’re set in your ways.  You are “at rest.”  And just like Newton taught us, “an object at rest tends to stay at rest.”

Of course, it’s not impossible.  You can get to the gym, change your diet, drop your golf handicap, whatever you want . . . it just takes a lot of effort . . . and time.

How much time?

Well, there are all sorts of theories on how long it takes to create a habit. Some say 21 days.  Some say 30 days.  Some say months . . .

One of the best books I’ve read that had a huge habit-making impact on my personal and professional life is Atomic Habits by James Clear.  In it, James suggests it takes about two months to create an automatic habit (like getting up early, writing every day, etc.).

And here’s the problem that is related to theatergoing . . . the moment you skip a workout, binge on some Oreos instead of almonds, etc., the harder it is to get back on track.  Especially if that habit is expensive and time-consuming.  You’ve probably experienced this yourself, right?

Now, what does this have to do with the price of a Broadway ticket in a pandemic?

For the core Broadway theatergoer . . . going to Broadway is a habit.   Some have a once once a month habit.   Others 4x a year.  But however often they go . . . it’s a habit.

And that habit was just broken.  Big time.

To put it in terms we can all understand . . . We’re not just skipping going to the gym.  The gym was shut down entirely.

Pretty easy to just sit on your couch and not sweat, am I right?

And, when this sort of thing happens, it’s not only that old habits are broken.  It’s that new ones are created.  And those new habits are usually whatever is readily available and easy (enter the couch and the Oreos).  And right now, that might be, oh, I don’t know, Netflix, Disney+, Amazon Prime . . . YouTube!  (Don’t get me started on why theater and Broadway isn’t more available on streaming platforms . . . actually DO get me started! I’ll just save it for a blog next week.)

If all this wasn’t enough, the longer that time goes by before we try to restore a broken habit, the harder it is to get it back again.

An object at rest tends to stay at rest.

So, to sum up . . .

For the average theatergoer, the habit of going to the theater is broken.  And new habits are taking its place.  And these new habits grow stronger every day, as the old habit of going to the theater grow weaker.

We’re not the only industry that this is happening to, of course.  People are creating new habits of cooking, and breaking habits of going out (this survey says half of the people who are cooking more will continue that habit.)  People can’t go to the gym, so they’re exercising at home, or not.

And these new habits will affect the rebound of the restaurant industry and the gym.

In any business, making your product a habit with the most amount of people possible is what makes your product a smash hit.  Checking your Facebook page, your morning Starbucks, Googling something every time you need an answer . . . habits are why these companies are billion-dollar empires.

Our job now is not just to market Broadway, but we must come up with ways to restore the theatergoing habit to the people who have lost it.

How do we do it?  Good question.

Good news/bad news?  We probably have a bit of time to figure it out.

So tell me, how would you put the habit of going to the theater back into the lifestyle of our audience?

Throw some ideas in the comments below and I’ll do a follow-up blog with some ideas in the next few weeks.

(Oh, and I meant it about that streaming blog . . . expect a rant coming soon to this space.)

 

———————–
P.S. Join me and my guest tonight as we go LIVE on my Facebook page. I’m thrilled to be sitting down with Julie Halston (Tootsie, On The Town, Hairspray) at 8pm EDT here.

 

[SURVEY RESULTS] Will Broadway need an Investor Stimulus Package?

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?

18-24…0.00%

25-34…5.29%

35-44…13.22%

45-54…16.74%

55-64…33.48%

65+…31.28%

2. What state do you reside in?  (Only reporting the top states)

New York…48.20%

California…14.41%

Florida…5.41%

Massachusetts…3.60%

New Jersey…3.60%

Connecticut…3.15%

Texas…3.15%

Illinois…1.80%

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?

0…0.44%

1…12.83%

2-5…33.19%

6-10…23.89%

11+…29.65%

4. On average, how much do you invest in each Broadway show?

$10,000-$25,000…40.53%

$25,000-$50,000…33.04%

$50,000-$100,000…12.33%

$100,000-$250,000…7.93%

$250,000-$500,000…4.85%

$500,000+…4.85%

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?

Definitely…20.18%

Very likely…17.54%

Most likely…31.14%

Not very likely…27.19%

Definitely not…3.95%

6. Now how likely are you to invest in a Broadway show in the next 12 months?

Definitely…2.19%

Very likely…4.39%

Most likely…18.42%

Not very likely…50.00%

Definitely not…25.00%

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?

Plays…42.99%

Musicals…81.31%

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?

Plays…19.23%

Musicals…43.27%

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…

Riskier…70.62%

Less risky…0.95%

Just as risky as it was before…28.44%

Duh.

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)

A vaccination…69.34%

Less expensive production costs…54.72%

Less expensive weekly operating costs…54.25%

Economic recovery…51.89%

Antibody testing…46.70%

Stars/Celebrities…21.70%

Other…17.92%

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.

– – – – –

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.

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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