There are two kinds of stars.

One that sells tickets and one that doesn’t.

And believe it or not, the one that doesn’t sell tickets isn’t necessarily a bad thing.

Have you ever wondered why a show cast a certain celebrity?  Have you ever said to yourself, “Why on earth would (insert Producer’s name here) cast someone from an 80s TV series when they have no talent?”

Here’s are the two types of stars in our universe:

  1. There’s the type of star who sells a ticket regardless of the show, i.e. Madonna in Meet Me In St. Louis, or Jim Carrey in Barnum (my casting dream).  Obviously the costs associated with this type of star are high, because guess what?  If you know the star is going to sell tickets regardless of the show, then the star’s agent knows it too.
  2. The second type of star is the one that may not sell tickets right away, but one that gets press, and therefore gets the show editorial content which they may not have otherwise received, i.e. Jason Priestly in Falsettos or a Survivor finalist in The Crucible (my casting nightmare).  This type of star is often used in “stunt casting” to help get a show back in the papers.  They are also intended to be the straw that breaks the customer’s back when the customer is deciding whether or not to make a purchase.  They add value to the show because of their name recognition so the customer can run back to Wichita and say they saw a show with “That guy from that show with the zip code.  You know, the old version of the OC.”  These stars are much more cost effective, since they are not in as high of a demand, and because they usually are looking to use Broadway as a booster rocket for their career.

When you see celebrities in shows, try and determine whether or not they are Star #1 or Star #2.

And when you’re doing a show, try to not use one at all.

1-800-Get-A-800#

You’ve heard me whine like a 13 year old who can’t get tickets to Wicked that one of the greatest obstacles we have as theatre marketers is that we’d don’t have easy access to our customers.

The easiest place to get your customer’s permission to speak to him/her on a consistent basis is when they make their purchase.

Since Producers don’t control the purchase point, we can’t get the customer’s information (email, address, phone) and we can’t ask that customer if they’d like to hear from us again.  In fact, we have to purchase the right to communicate with them again through through ultra-expensive email blasts sold by the ticketing agent.  Doesn’t make sense, since many of these people are our customers in the first place, right?

Right.  But that’s the way it is, and we’re not the only industry with this problem (think Book publishers and how their products are primarily sold through Amazon.com or Barnes and Noble).

Since this problem isn’t going away anytime soon, we have two options:

1.  Take advice from a William Finn lyric and “Bitch, bitch, bitch, bitch” and get nothing accomplished.

or

2.  Stop being a Cry Baby and find alternative solutions.

Producing on Broadway is like being a contestant on a Japanese obstacle course game show.  You’re going to see giant encumberances every few feet.  Things that don’t make sense.  Things that are scary.  Things that look like they were created to make you fail.  (Watch the video below!)

What separates the Producers from the game-show-losers is whether you let those obstacles scare you into doing the same old thing over and over, or whether you look for ways around those obstacles.

Example . . .

Problem:  We can’t communicate with our customers.

Sometimes when I’m faced with problems like this, I flip it around and try and get the opposite to happen.

If we can’t communicate with our customers, then let’s find a way to get our customers communicating with us.

Here’s one easy-breezy solution:

Get a Vanity 800 # and put it on all of your materials.  Thanks to internet technology, it’s a lot easier and a lot cheaper than you think.  Check out this company which handles all of my numbers (1-877-RAD-PROM, 1-888-MY-1-TIME, 1-877-ABOYZ-411, 1-877-OFF-IS-IN, and a few more).

800 #s build consumer confidence.  They give the perception of a larger company.  And people will call you.  They’ll call for information, to give you feedback, to ask for directions (I don’t understand big companies who bury or don’t publish their 800 #s on their website, trying to avoid customer contact.  If you don’t want to talk to your customers, then that means you’re afraid to talk to them, which means you have no faith in your product).

They’ll call because they need something.  That’s when you can get what you need from them.

And as Malcom Gladwell points out in The Tipping Point, the people that call these #s are usually exactly the people that you want to talk to, because they’ve got to be pretty passionate about your product to be calling.

Will this one idea get you over the wall and to the finish line?  Maybe not.

But coming up with ideas and ways to deal with the obstacles that stand in front of us is a heck of a lot better than just staring at the wall and cursing at it.

What ideas do you have to to establish a direct line of communication with our customers so that we can rely less on third parties?  Comment away!

I don’t care who Cubby is, I want to know who his parents are.

Because whoever created Cubby Bernstein has come up with the most creative viral marketing campaign I’ve seen on Broadway in awhile (Cubby has already received mentions in the The NY Times, Playbill, etc.)

And Cubby is even twittering!  Can you believe it?  A Broadway campaign that is WITH the times!

Rumors have it that Cubby is the brainchild of Douglas Carter Beane and the folks at the other roller-skatin’ musical, Xanadu (a check of WhoIs.net is of no help in determining who Cub’s biological parents are).

(update: episode 2 confirms that this a Xana-oriented)

Cubby has our attention.  And now let’s watch and see how effective he is in doing his job.

The fun stuff should be just beginning . . .

What would I love to see?  Cubby sitting in a seat at Radio City on Tony night next to the Producers of Xanadu.  Take this all the way, guys.  Take it all the way.

Advice From An Expert: Vol II. A Gamblin’ GM speaks

I jokingly twittered from a casino in Palm Springs last week wondering if the odds on the craps table were better than the odds of investing in a Broadway show.

Well, craps and Broadway are no joking matter to my good friend and uber-General Manager, Mark Shacket, who is currently in office at Alan Wasser Associates, one of the largest General Management firms on Broadway.

Mark worked it out . . . so I thought I’d include his musings on the subject as volume II of our Advice From An Expert series!  Enjoy!
 

 – – – – –


CRAPS – EXPECTED LOSS

If we assume the following things:

– that a typical craps table rolls the dice every 30 seconds
– that the point or seven hits every 5 rolls (meaning each “cycle”
from the coming out roll to the end of the session is 5 rolls on average)
– that you play the pass line bet with maximum allowed odds every time, with
max odds 3X-4X-5X (House edge: 0.37%)
– that you make 2 place bets every “cycle” (Average House edge:
4.06%)
– that you make a hard way bet every other “cycle” (Average House
edge: 10.10%)
– that you make 2 prop bets every “cycle” (Average House edge: 12%)
– that your craps session lasts 2 hours

then the expected loss for your 2-hour session is 37.48%.

BROADWAY – EXPECTED LOSS

If we assume that for every 10 Broadway musicals produced, the following
results are achieved:
– 0.25 musicals are HUGE hits (Wicked, Phantom): 1000% return
– 0.75 musicals are big hits: 250% return
– 1 musical is a hit: 130% return
– 5 musicals lose some money: 60% loss
– 3 musicals loss everything: 100% loss

And we assume for every 10 Broadway plays produced, the following results are
achieved:

– 0.25 plays are HUGE hits: 250% return
– 0.75 plays are big hits: 150% return
– 1 play is a hit: 120% return
– 5 plays lose some money: 60% loss
– 3 plays lose everything: 100% loss

then the expected loss for your average Broadway investment is 36.88%.

(It should be noted that the above assumptions are based on little more than my
whim.)

Therefore, Broadway has a slightly better expected return than craps (36.88%
loss for Broadway vs. 37.48% loss for craps).  Ken’s question was which
has “better odds”, and these figures suggest Broadway investing has
better odds.  But not so fast!  Broadway investing may have a better
average return, but the mean return is far lower.  What does that
mean?  Let’s look at an easy-to-understand example:

The New York State Lottery paid out 54.7% of their receipts in prize
money.  Does that mean that if you play the lottery regularly that you can
expect to make a return of $0.547 on each dollar?  No!  In fact, your
return will almost certainly be far less than that.  Consider how much of
that 54.7% payout is paid to the small handful of multi-million dollar jackpot
winners.  That will most likely not be you.  So playing the lottery
may have an average return of 54.7%, but the mean return (what
the majority of people experience) will be much lower, since they don’t share
in the big payouts.

The Broadway investment analysis above assumes you can invest in every Broadway
show evenly, which you can’t.  Broadway’s average loss is mitigated in
large part by being able to invest in the huge hit.  In fact, if you
remove only the huge hits from the equation, the expected loss on Broadway
jumps to 52.50%!  But because investors can only put their money in select
shows, there is a good chance that they will never find the very rare, huge
hit.  Note that 8 out 10 times you invest, you will lose 60% or
more.  So the average return on Broadway may be slightly higher
than on craps, but the expected return (ie, the mean return; what most
investors will experience) is much lower.  Broadway is therefore a far
RISKIER investment than craps, even though the overall average expected loss
rate is lower.

What can we learn from this?  Well, first, only invest in hits.  But
there’s another important thing to remember: When you’re rolling the dice on
the felt, you have absolutely no information about what the next number rolled
will be.  But when you’re rolling the dice on a Broadway investment or
producing opportunity, you have plenty of information to consider.  Who is
the producer and what is their reputation and track record?  How does the
budget look to you?  What does the current marketplace look like?
Are there other similar shows on the boards and how have they performed?
Who is in the cast or on the design team?  Is the script well-structured?
Is the show marketable?  Read, learn, and study everything you can about
your investing or producing opportunity and you will be sure have more than
your share of the success.

– – – – –

Thanks, Mark!  See you at the tables!

Theater things that don’t make sense: Vol. 2. Interested?

Do you get excited when you get a big tax refund?

You shouldn’t.  It means that you just gave the government an interest-free loan for the year.  If you’re a smart saver, you’d be much better off doing some recalculating of your weekly withholding.  Why?

Because the money is always better off in your pocket then the government’s, because you can do something with it:  invest it in a stock, a show, or just let it sit in your savings account earning a few percent in interest.

What does this have to do with theater?

Well, when a show like our non-nominated friend, Young Frankenstein, announces that they have an advance of $15 million dollars, have you ever stopped to think where that money is?  And how much interest it’s earning?  And who is getting that interest?

On a hit show with a $10 million dollar advance, you could earn a 2.4% annual yield or $240,000 with a crappy Chase savings account.  That could be 30 – 50% of the costs of running your show for a week.

And imagine the interest rate you could demand if you took a bunch of advances for Broadway shows and put them together!  Well, that’s what happens.  And imagine what an aggregate $35 – 50 million dollars earns.

Advance ticket sales are not held by the Producer.  Since the theatre owner controls the ticketing agent (and may actually be the ticketing agent), the theatre owner controls the interest.  They are earning money on the money people have paid to see your product.  Doesn’t compute, does it?

Cash management is the key to big business.  There’s a reason why one of the most successful businessmen I know recommended a book to me called Buy Low, Sell High, Collect Early, Pay Late.  There’s a reason why the on-trial bosses at Livent never offered direct deposit (checks never get cashed right away, which means money sits in their account).

There’s an argument out there that Producers shouldn’t hold on to advance sales, because they might try to dip into the money to cover losses or expenses, and because the shows come and go so quickly.

This is true, but it’s also true for every company out there.

You pay for your plane tickets in advance, don’t you?  You don’t see a third party holding on to the funds until after you travel before delivering it to the airline.

You buy stuff online that doesn’t arrive for weeks from companies with only a web site, but credit card companies give the merchants the money sometimes as early as the next day.

Once again, traditional business methods that allow companies to get a leg up aren’t allowed on Broadway.

At least one of the major theater owners splits the interest with the Producer, but not the others, that I know of.

Should they?  Maybe.  Or maybe they’ll argue that there are costs with keeping track of all that cash and costs of doing the ticketing that service fees don’t cover, and that $240k has to pay those administrative fees (cough, cough).

So I’m not saying it doesn’t make sense that we don’t get the interest (although I encourage all of you to ask for the split – we need every ancillary revenue stream possible).

I’m saying that it doesn’t make sense that we don’t control the ticketing . . . and then the interest just happens to come along with it.

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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