Degrees-R-Us.

According to census data, the percentage of the American population with college degrees keeps rising, with 28% of all workers over the age of 25 reporting having completed their undergraduate education.

According to Broadway League statistics, 76% of our audience has completed college.

Here’s my bullish thought of the day:

If college degrees are rising, and people with college degrees go see theater more than others, isn’t there a tremendous opportunity for the expansion of our audience instead of the decline?

And if there is such a overwhelming correlation between higher education and attendance at the theater, perhaps our audience developmental programs should focus on colleges and universities around the country.

Here’s what I do for the next survey.  I’d find out if there are certain schools sending more people to Broadway shows than others.  If we found a few, I’d develop partnerships with those institutions to continue to expand on what we know is working already.

I call this sort of technique fan-the-flame marketing.  You find out where the spark of your audience is.  Then you go blow on it, until it turns into a roaring fire.

Comps cost money.

If you’ve ever gotten a free ticket to see a show, you cost the Producer money.

With ticket printing costs and liability insurance, you could be looking at fifty cents to a dollar per comp, not to mention the labor associated with filling the orders, etc.

Doesn’t seem like a lot, right?  Well, one of my favorite sayings is that a lot of a little equals a hell of a lot.

It would not be unheard of for a Broadway show to have 10,000 comps during the first year of a run (think papering for previews, trade deals, etc.)

That’s $5k – $10k.  That’s some expensive paper, isn’t it?

So what if we took a lesson from mail order companies that offer FREE products as long as the customer pays for the “shipping/handling”?

Here’s my proposal that I’m going to institute at my shows this week:  Charge $1 processing fee for each comp to cover your costs.  And, if you can get that fee up front, you’ll also get a stronger commitment from the consumer to actually show up for the show, as comp ticket attrition is one of the biggest problems with papering.

The takeaway?  When producing a show and looking to cut expenses, a lot of people just look at the big things.  Don’t.

Termites aren’t very big, but put a whole lot of them together, and your house will be history.

Did I say inflation? I mean Enflation.

Yearly_inflation_rate
In Monday’s post, the article I referred to mentioned a capitalization of Wonderful Town of $225,000 and a ticket price of $7.20 in 1954.

A reader turned me on to a site that could tell us what those numbers would be in today’s dollars, taking inflation into account, using the Consumer Price Index.

The results?

$1,725,934.60 cap.

and

$55.23 top ticket

Oh, if only a major Broadway musical could be done for $1.7 million.  And if only the tickets were only $55.23.

Wonderful Town in 2008 would probably be $10 million, more than 5 times the 1958 version when adjusted.

We’ve got our own version of inflation.  Expense inflation or Enflation as I call it.

Should we be surprised that recoupment is more and more delayed when are expenses are increasing so dramatically?

Yes, it’s the stagehands.  Yes it’s theater rent.  Yes, it’s health insurance.  Yes, it’s advertising.  Yes, it’s everything. And, as producers, we have to look at everything.

Interestingly enough, the article also mentioned a weekly nut for Town of $44,000 (a weekly “nut” on Broadway is a term used to decribed the amount of money required by a show to pay all its expenses, or the show’s breakeven).  .  Converting that to current dollars gets you $337,516.10.  That’s closer (I’d guess that a new revival would cost about $500k/week give/take).

This is a down and dirty statistical analysis, and inflation indexes don’t measure improvements in quality which come with price tags (although, if we can’t financially support it, maybe we shouldn’t buy it – would you buy a brand new computer with the best technology if you knew you might be out of work and lose your house in 3 months?).

However, even with these rough numbers, if I were looking to start addressing where our biggest Enflation has occured (and I am), I’d start with the upfront expenses.

At $15 million dollars a musical, we’re starting ourselves so far in the hole, it’s hard to get even halfway out.

And then we look like A-holes to our investors.

Curtains closing. But what is missing?

Look at these three clippings announcing the final curtain of Curtains:

The New York Times

Broadway.com

Playbill.com

What is missing from each of these announcements?

Ok, you don’t have to read them all, I’ll tell you . . .

There’s no indication of whether or not the show recouped or not.  Which means . . . it didn’t.

Sad.

This is what’s wrong with the the current economics of our industry.

Here’s a show that got some decent reviews, has stars (including one that won a Tony for his performance), ran more than a year, had decent word of mouth.  It wasn’t a great show, but it was fine.

I wouldn’t expect stellar profits from a show like this, but I would expect to break-even, wouldn’t you?

Maybe it will, eventually, through subsidiary rights and additional companies all over the world.  But we should work hard at making our investors whole based on the Broadway experience alone (the more we give them back, the more they’ll put it back in).

A great show (as determined by the audience) should produce great returns.

A decent show, should produce decent returns.

An ass show, should produce ass returns.

Or that’s my goal anyway.  I hope it’s yours (except for the ass part).

Another pricing post. Don’t “cry” – this one is only $54!

I couldn’t help but continue with my pricing motif when I saw the Cry Baby marquis this weekend advertising “All Tickets for Previews Only $54!”  (The show is set in 1954. Get it?  1954.  $54.)

The hopeful Producers of Hairspray II are betting that this reduced price (about the same as what the price would have been at the TKTS booth) will pull in more of an audience during the ever important early weeks, when a show’s expenses are high and grosses are low.

But will it work?

By slashing their prices across the board, they have eliminated the consumer’s option for choice, which breaks my Kardinal Kenism:

There is always someone who wants to fly first class.

First class may seem out of reach for most of us, and a full price ticket might seem too expensive for an unproven show in previews for most of us as well, but data shows there is always someone who will buy it, no matter what the price is.  They just want “the best.”  Dance of the Vampire, Moose Murders, Carrie . . . all of the biggest flops in history had full price ticket buyers during previews.  Stupid ones, but still.  My opinion?  Just take the money.

The other problem with across the board pricing strategy is that your
TKTS price is proportionally adjusted.  So, the Producers of Cry Baby aren’t only losing income from the potential $115 ticket buyer who is now
paying $54, but they’re also losing money from the people who would have
paid $57.50 at the booth (50% of $115) who are now going to pay $27 (and remember – at the TKTS booth, you don’t see the actual prices display . . . only 25%, 35% or 50% off, so the customer thinks they are all the same).

The Producers of Baby are smart people.  They understand the above theory.  But obviously they believe two things:

  • They believe they are going to sell approximately 2x the number of tickets from this promotion than they would have sold using traditional pricing.  Even if they sell the same, they will have double the butts in the seats.  And more bodies = more word of mouth.
  • The public discount will allow them to spend less on advertising so they can avoid certain email blasts, direct mail, etc. which reduces their overall expenses.

Time and Variety will tell how this theory works, but if I were playing my favorite game, I would have made a different call.

I would have priced it more traditionally, based on my first class rule above, and because I don’t believe that the price is that remarkable of a call to action.

Then I would price the entire house for just the first preview at $19.54.

That’s a price worth talking about.  And it would have gotten the most people in to the see the show early, so they would hopefully stop talking about price.

And start talking about the show.

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