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.

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!

Putting What Broadway Bears Into A Box.

When you sit down and prepare to budget a show, what’s the first thing you do?

Figure out how much the theater is going to cost?  Figure out how much the creative fees are going to be?  Or how much you’re going to spend on hair styling bills for a star that submits a receipt for reimbursement every time she steps outside? (true story)

It makes sense to start off with this stuff. But I recommend that before you work on your own show . . . work on everyone else’s first.

For example, I’ve got a bee in my you-know-what about reviving a certain Broadway musical.  So I’m looking at all the other revivals of the last 20+ years first.

And by looking at their numbers, I can create the beginnings of a budgetary box that I can fit my show into based on hard empirical data on what the market can bear.

What’s the first thing I looked for in this search?  Length of run.  Here, exclusive to you, oh faithful blog reader, are the results of numbers crunched by me and my assistant Nicole, thanks to raw data provided by the 

Broadway League.

The following is the average length of runs of productions on Broadway since 1984 (note: some of the productions included in these calculations may still be running)

New Musical                         52.67 weeks

Revival of a Musical               51.59 weeks

New Play                              24.40 weeks  

Revival of a Play                     15.65 weeks

Interesting stuff, huh?  Now, if I know that an average revival only runs 51.59 weeks, I know I better figure out how to recoup the investment in that short period of time.

But Nicole and I are not done yet.  The next figure that will help me build my budgetary box?  Average price of a ticket.  For a revival.  Of a musical. 

Stay tuned.

Size does matter . . .

But not in the way you think.

General Managers and Producers are always trying to figure out how to make shows work economically.

The old trick is that if it’s not working in a specific theater . . . put it in a bigger one!  Your Gross Potential goes up, and therefore when you show an investor a recoupment schedule based on percentages, the show looks more viable.

70% of 2000 seats is a lot better than 70% of 1000 seats, right?

But here’s the rub.

Just because you put the show in a bigger theater, that doesn’t mean that more people are going to go.  Duh, right? 

Here’s what I like to think of when I choose a theater.

Yes, economics are important, without a doubt.  And I’d look at the average # of people coming to see Broadway or Off-Broadway shows on a nightly basis to determine what is appropriate.

But just as important is the feel and the energy inside the theater. 

I like my theaters to feel like a soda can that is shaken up – so filled with energy and excitement that it could burst! 

And then, when you open the doors at the end of the show and let your audience out, it’s like opening up that shaken soda can . . . and all those people go spilling into the streets and all over everything else, gushing about what they just saw, because they can’t help it. 

Those are the people that are going to sell tickets for you. 

And a smaller more energized theater also means a harder to get ticket, less seats to fill so less advertising expenses, lower theater expenses and an overall better experience for the audience.

So get people excited with something smaller.

Houston, we have a distribution problem.

Broadway is in the heart of Times Square in New York City . . . and nowhere else.

And, no matter how much I want to get a petition going to move it to sunny southern California, it doesn’t look like it’s going anywhere soon.

Broadway isn’t like Tide detergent, available in every grocery store around the country. It’s not like the latest Avril Lavigne album available in every Virgin Megastore and on iTunes on the computer you’re working on right now.  It’s not like American Gangster, which will play in movie theaters in New York City and in Nashville, and in every city around the country and around the world at the same time. 

Unless you’re one of the lucky shows with 15 companies worldwide, you’ve got only one distribution channel . . . right here in New York City.

If your distribution channels are limited, then obviously you can’t market your show in the same way.

In this Sunday’s Arts & Leisure section of the New York Times, there was a full page ad for The Little Mermaid on Broadway.

And, of course, just a few pages away, there were full page advertisements for films like American Gangster.

Which one is a better value?

A New York Times reader in New Mexico can’t see Mermaid, but most likely he can see Gangster.

Yet both full page ads cost about the same amount of money.  Doesn’t seem fair does it?  Mermaid’s potential customers are severely diminished because of its one distribution channel. 

Billboards pose the same problem.

There is a giant Young Frankenstein billboard in Times Square. There is also a billboard for Target.

The impression that the Target billboard makes on the tourist can be converted the following week when the tourist is back home.  Or when the tourist is visiting another city two weeks later. 

The impression that the Young Frankenstein billboard makes can only be converted within 5 blocks of that billboard.  Once he or she goes back home, the impression becomes so much less valuable.

90% of shows can’t afford the same sort of subtle branding that most other products can afford. Our advertising has to be a much stronger call to action.

So what do we do?  Use your advertising to sell, not just brand (that is, until you have 15 companies worldwide and can split the advertising costs among them).

Or more significantly, perhaps we should stop throwing money at giant media companies like the NY Times who refuse to recognize that we are different than Tide, Avril Lavigne and American Gangster, and therefore should have appropriate pricing scales.

When it comes to advertising, pay for your potential.  Don’t pay for someone else’s. And yes, Avril Lavigne is on my iPhone. 

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