The Economics of Broadway Shows
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[1]https://www.economist.com/business/2016/06/16/no-business-li...
Archive of the first Article https://archive.md/L3xzV
[2]https://www.economist.com/the-economist-explains/2016/06/15/...
Archive of the second Article https://archive.md/oylse
[3]http://www.economist.com/broadway-business
Archive https://archive.md/5HUpH
Some wag, noting how economists were better at explaining the past, remarked they had successfully predicted nine out of the last five crises ...
https://www.youtube.com/watch?v=WNFf7nMIGnE
That's important because the premise is high school cringy. Let's take a historical story and set it to rap! If it wasn't so well-executed, it would have come off as painfully gimmicky.
Obviously they found a large enough audience that disagreed but I don't think they were a majority.
Obviously anecdotal.
I'm not sure how long it took for Rent to feel cringy, but the premise of 20-somethings trying their hardest to avoid getting jobs so they can continue being artists also didn't age well.
Also, I'm star struck. I love your blog!
I’ll offer a counterpoint. I’ve seen it once live and soon going to see it twice next time it comes to town in a few months. I can’t wait, I’m giddy. A whole lot of people out there clearly are too.
I totally get that some people literally can’t understand rap music words. If you are hard of hearing and aren’t familiar with the story, you are totally lost in the audience (ESPECIALLY as the actors change characters after intermission)
In my experience there’s a group of annoying “New Yorkers” (aka people who identify as New Yorkers, as in they lived there during an internship in college or spent a couple years “working in finance” finding themselves before moving back to Tupelo) who love to shit on anyone who recently saw Hamilton; they roll their eyes and say “oh yes yes I saw the original cast back in 2015, it was cute…” Calling Hamilton extremely cringey sounds like signaling or sneetching vs. an honest critique of the show. It’s a thing I’ve noticed repeatedly and this comment fits that bill, and I don’t know why it bothers me more than simply saying “I didn’t care for it” but it does.
Hamilton is a phenomenal work of art, the White House performance is a peek at creative genius in process, my kids have probably watched the Disney+ production 100 times and know all the words to (almost ;) ) every song and therefore know more about that specific era of American history than I did until I was much older.
Back to the TFA, I think it was such a runaway success compared to other shows because it feels like an intensely personal work of art and not just “let’s copy paste and bang out another ALW formula show.” There’s no shortage of misguided efforts at for-profit art, and people scratch their heads wondering why their absurdist introspection of (fill in the blank) or the kinkade-y reboot of some hit in another format didn’t rake in a billion dollars. The soundtrack is light years more listenable than most other musicals; that’s very subjective but I think it’s a significant part. I appreciate the overarching message of Hamilton, power of the pen, the hope for the future, the need to take smart action, the ability to recover from mistakes, and the inability to recover from letting pride override rational decision making. There’s just so much there.
One more thought on the overall economics of a show not discussed in the article: since shows are largely seen by tourists, as a tourist, there’s more to the cost of the show than the ticket itself. The opportunity cost is the most expensive part, and only devoted fans of theater are going to see more than 1-2 shows on a tourist visit to NYC. If I’m going to see a show, it better be good, and I have little interest in risking a precious afternoon in NYC on a swing-and-a-miss. As such, it makes me wonder if a second line touring circuit is possible for very small shows to get exposure in other smaller cities (any other city besides NYC). It would almost have to be a very intensive 4-5 performances a day for 3-5 days in a city, with a brief but panoramic advert blitz at the local level. The equivalent of a small up and coming music group refining their grind and performance at college bars across the country before hitting it big. Digital projection of sets, keeping a deep bench of local stand ins available as needed, relatively standardized audio production requirements, A reciprocal agreement amongst a network of theaters, with a special deal with a nearby hotel in each market could take a lot of the load and cost off. Maybe it already exists.
(some revisions/edits throughout)
Cities like SF will keep getting first national tours and have somewhat limited theater space, so it might not make sense to take shows there, but I could see it working for critically acclaimed shows in towns with community theaters and season ticket holder willing to spend $50.
I've listened to and liked plenty of rap.
But I would still have to say, amongst all the broadway that I don't like, Hamilton sticks out to me as especially weird, like one of those 90s educational videos where people would rap when they clearly just shouldn't be.
Anyway, to each their own. More power to you if you like it. Something about it really bugs me though.
Fine-dining restaurants also "need" a chef with a name, a sensible location (though you can do OK many places), and some favorable early reviews.
Hedge funds, my industry, is similar, though the real estate issue is not quite so pressing as for a theater.
Starting your own band is also one of those where there's a big time where there are certain industry standards that you'll have to get familiar with while you work on the actual product.
Common to them all is you have to bring together a certain mix of human capital, experience, and novelty to get the right doors to open. There's always kind of structure that everyone in the industry understands, with its own lingo and skills and important players that everyone knows.
What they also have in common is that you can have very competent people who know how to do stuff that don't strike the gold. Everyone's heard music from highly accomplished musicians who aren't famous.
Familiar actors and stories might help, but also things that are clever and artistically memorable (e.g. Hamilton) have got to help.
I'd also be interested to know how many shows start off-Broadway or off-off-Broadway (100-500 seats and below 100 seats as per this article), and move up to the bigger theatres: test a show in a smaller venue, see if people/critics talk about it, let supply build and keep production costs capped.
Some might argue - especially for musicals - that you can't produce "good" shows without much less in the way of production costs, but I think that could be a fallacy. I've watched enough shows and plays to know when one has good "bones" that could be enhanced with bigger sets, better actors, etc. and which are going to die no matter what you do.
Hamilton would have been getting talked about and supply not meeting demand if it was Lin-Manuel Miranda in a backroom of a bar in a frock coat, a small band and some acting students making up the rest of the cast. The bones are so good on that show - it's clever, musically arresting, compelling story arc, memorable performance from himself - that anybody who would have seen it would have told their friends about it the next day.
Some shows need to be big at the start, but they already have "built-in" audiences: Lion King trades on childhood memories of the film, it's not hard to see why it would be a success.
Spider-Man which the article touches on was always a bit of a gamble: it has built-in audience, but how many people think of the Spider-Man films _fondly_?
Contrast with Back To the Future which I saw premiere in Manchester, UK (the toughest place to test a show in the World perhaps), before lockdown, and it's moved to the West End and I'd predict is going to be huge on Broadway. Great bones, great built-in audience who love revisiting the film and story repeatedly.
Perhaps I'm in the wrong industry, but this seems so, so much easier than software businesses...
Spiderman was in tech for over a year (beta testing) because the damned flying didn't work. Then they radically changed the script because it hadn't been workshopped, and it was still terrible.
I would encourage you to work on a theatrical production some time. I think you'll find a lot of familiar difficulties, including insane schedules, incompetent management, project bloat, abuse and burnout.
… and as TFA says, financial calamities, and yet, we persist, and we love all of love it, and this art will never die.
Why?
It’s the essence of us.
Story telling is the BIOS of humanity.
It's a very hit-or-miss industry, so there will be periods when you're not doing anything, and then you're left with this pool of extremely high-talent people doing small productions, waiting tables, and the like.
Wouldn't any formula for a hit get repeated until audiences are bored and it stops working?
Off-off Broadway to Off–Broadway is doable, but the economics of adding that extra seat (499 to 500) and becoming a “Broadway” show are just unrealistic for a lot of shows. Different union requirements, plus the theatres impose different costs, and you have to raise a lot more money to open a Broadway show, regardless of where it’s coming from (out of town, off/off-off, local workshop, etc).
The only "off off" Broadway show I can think of that made it on Broadway in recent times was Hedwig (started in the Jane hotel bar IIRC), and that took a detour through being turned into a movie.
If anything, investing in startups feels easier, I could have spread the same amount of money across multiple startups, figure on losing 33-50%, breaking even a bit, and having one or two return everything. In contrast in a musical or play you’re gambling that the combination of director, cast, band, theatre, mood of the reviewers, mood of the audience will combine just the right way.
Same with films, and authoring books.
People invest in the arts to make a living. This has nothing to do with the accumulation of money.
My First Wife was an actor by career and most for-profit productions survive because they pay their actors so little. And you're only paid for performances, so those many weeks of rehearsals where you are perhaps driving 10 miles each way are going to eat up most of your income from the production.
However, I do question one line in the article:
> The average income of Broadwaygoers in 2018-19 was $261k — roughly 4x the median household income in the US.
$261k?!? the average income of attendees?!? That's can't be right can it?
For the purpose of the point the article was making in that section (about how the efforts to 'make Broadway more affordable and more democratic come up short.', the 'average' income seems particularly useless as a metric to gauge success.
As you point out, the median is a much better metric.
It is incredibly annoying to know that someone had the data and chose to not show its distribution, when it costs them almost nothing to do so. I assume any use of the word “average” without specifying mean or median, or really any use of mean average, to be clickbait because there is no reason to use it when you know the underlying distribution is skewed.
I don't know the stats in the UK, but anecdotally, everyone I know who regularly goes to the theatre (as opposed to occasionally e.g. once every year or two) isn't far off financial independence.
Poor people will just watch it on TV.