Could Broadway survive if all shows just theoretically dropped prices?

Please note that I am (clearly) no expert in economics, but I'm curious...

Whenever the state of the industry is discussed, one of the top "problem" areas that we hear is that ticket prices are too expensive for most people. If shows just theoretically dropped their prices to be more affordable, or further more, if the general public theoretically banded together and just absolutely refused to buy tickets they deemed as "too expensive", what would that actually do in the Broadway world?

I know the likelihood of this actually happening is zero, but I'm just genuinely just curious as to what would happen.

Updated On: 11/2/22 at 09:17 AM

ErmengardeStopSniveling said: "No. A few points about this:

- Broadway shows are budgeted (capitalization and weekly running costs) relative to ticket prices. If a show costs $800K a week to run and you price all the seats at $50 to try to move them, you don’t have a prayer of recouping or even breaking even, not when you have so many union members and fixed expenses."

Just to play devils advocate, would it even be possible to attempt to start making Broadway shows less expensive to run moving forward? How would that even work if that was a goal?

SomeOtherMe said: "Just to play devils advocate, would it even be possible to attempt to start making Broadway shows less expensive to run moving forward? How would that even work if that was a goal?"

Shows do that upfront by slashing the cast size, band size, number of costume changes, reducing weekly advertising budgets, etc.

(and in the Covid era, shows are hiring additional swings, and spending thousands per week on testing & safety protocols.)

When things get tough, there’s what are called waivers: the key service providers and stakeholders agree to waive their weekly royalties/fees for X number of weeks, to reduce running costs in the hope of being able to break even each week and eventually bounce back. If things get even worse, shows might opt to take out a Priority Loan: a loan to sustain the show and make up for losses, which is paid back before money goes to the investors of the initial capitalization. That’s often a waste: Gent’s Guide and Smokey Joe’s are two of the only Bwy shows in history who took out priority loans and ultimately recouped.

There’s an argument to be made that Equity minimums should be on a sliding scale that rises with the show’s gross, and differences between pre-recoup and post-recoup rates. But that disadvantages the actors & SMs in new shows that aren’t selling well.

As I checked in for a recent flight to the UK, I was offered the chance to upgrade to first class for $599 more about $1000 less than had I bought a first class ticket originally. For a good night's sleep that allowed me to immediately hit the ground running, I bit and it was completely worth it.

Have any Broadway shows done something comparable? Tried a targeted offer close to the performance to entice people to upgrade their seats?

It's discounting of sorts, but not public, and not necessarily to the masses unless that is their desire. Plus it keeps the public "asking price" anchored in people's minds which from a marketing/pricing standpoint is more desirable than a discounted price becoming the comparison or expectation.

A few things to remember:

Broadway is not a single business; it's simply a joint marketing entity. Each show is on its own bottom so when we speak of doing anything we are talking about the failures, not the successes. That said, some producers are willing to take greater risks because they made a fortune on another show. It is beyond preposterous to suggest that there is no risk or experimentation going on on Broadway. That requires putting your head in the sand. Shows that are in trouble try lots of things to survive. Yes there may be new ideas (like the upgrade one) that could be tried perhaps but you can't budget a show to lose money. Likewise, you could reduce costs at least a little but the expense is what people come to see (and I don't mean just fancy sets and costumes, but talent at the highest level). People don't travel to New York to see 50 buck shows. The bottom line is we have always had a lot of failure and that's a part of the process. We have also had huge successes. Dynamic pricing and discounting is a big part of the strategy, but not giving away what you don't have to.

Unfortunately, lowering prices to entice a greater number of sales isn't a detailed enough solution to boost profits for shows that currently aren't making money. Any given must at least make some profit to stay open for an indefinite amount of time.

However, I live outside NYC and prioritize seeing shows I know I can have access to as inexpensive a ticket as possible. When I come in for my next trip every six months, I'll see 5-8 shows and how much the cheapest possible ticket is really does factor into my decision of what to see.

I realize accommodating budget theatre-goers like me isn't a practical way to make a show profitable. I do think there are further initiatives that could help though. At the end of day, I believe that selling a $40 rush ticket to someone in a seat that would otherwise go unoccupied is better than making $0 from someone unwilling to pay $100-250 for the same (or a similar) ticket.

Let me propose another solution:

What if there was a standard practice where all tickets on Broadway (yes, all) became $40 starting 40 minutes to the start of a performance? Similar to a rush line, but with added rules:

• One per person
• Cash only (to expedite sales)
• No negotiation on seating location - you get what you get, take it or leave it
• Once you buy your ticket, you must go directly into the theatre and take your seat

No exceptions to the above rules. It's similar to TDF and TKTS programs, but it's less cost prohibitive and it's the most efficient and direct way to fill seats and get more money into the pockets of shows.

Take a look at Chicago, for example. They had 2,700 unsold tickets last week. They've recouped; breaking even is a win for them. Could you imagine if they flipped those into $40 tickets minutes to curtain and brought in another $108,000 last week? That fills the seats with people who you never would have got in the door in the first place while adding $100K to your weekly gross.

This isn't perfect, I know. Maybe it's $60 at 60 minutes to curtain. Maybe it's not every show so the blockbusters keep charging their $150-200 average price.

But if every show (with the capacity to sell excess inventory) did an extra 500 tickets per week, that would have added an extra to $520,000 to the grosses on Broadway last week, and an extra 13,000 audience members attending.

This will never happen. My broad point is if selling inexpensive tickets was a real priority for producers to spur sales, increase attendance and make a smaller but more consistent profit, it wouldn't be a hard system to implement.

Yes Hogan hits the nail on the head.

Also have to remember that MOST shows are playing the long game. You don’t want to sell a $60 ticket today if you could get $150 for it next week or next month. And this is tied into Broadway being a luxury good.

Shows like Tina have used the strategy of “limit discounting; if people want to see it they can pay full price or TKTS rate.” That can have mixed results but I bet Tina yielded higher grosses than if they saturated the market with discounts for the same period of time.

GiantsInTheSky2 said: "Lumiere2 said: "Let me propose another solution:

What if there was a standard practice where all tickets on Broadway (yes, all) became $40 starting 40 minutes to the start of a performance? Similar to a rush line, but with added rules:

• One per person
• Cash only (to expedite sales)
• No negotiation on seating location - you get what you get, take it or leave it
• Once you buy your ticket, you must go directly into the theatre and take your seat

No exceptions to the above rules. It's similar to TDF and TKTS programs, but it's less cost prohibitive and it's the most efficient and direct way to fill seats and get more money into the pockets of shows.

Take a look at Chicago, for example. They had 2,700 unsold tickets last week. They've recouped; breaking even is a win for them. Could you imagine if they flipped those into $40 tickets minutes to curtain and brought in another $108,000 last week? That fills the seats with people who you never would have got in the door in the first place while adding $100K to your weekly gross."

I think this is a great idea - imperfect, yes, but like you said - you can either make an additional $100k or sit on empty seats (which also impacts the overall performance and sometimes moral of the house). Something like this may not completely change the landscape, but it could definitely help push us further along. A lot of things in this business need to change, and it’ll only happen if small adjustments are made along the way…"

This would make a LOT of ticket buyers simply wait for the line...having even fewer buyers of full price tickets. You are also assuming that every theater would suddenly be selling out but at a quarter of the price. They won't.

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ErmengardeStopSniveling said: "JasonC’s point is interesting. I just don’t think the ticketing systems are sophisticated enough for this.

Right now, people get filled into the best open seats through like…TDF and TKTS and other platforms where seats are chosen day-of."

I bet you're right that current ticketing systems not fully capable of doing something like this ... or at least with the level of micro-targeting that might be ideal.



Knowing that the best seats often go to TKTS or TDF the day of sis what made me think the upgrade option might be a great approach ... reward someone who has already been by bumping them up versus offering a higher priced seat at a deeper discount.

And since the original purchase price is already a sunk cost, an invitation to upgrade for say $40-$60 (just making up a number here that somewhat reflects a typical TDF price) might seem like a real bargain.

It is just greed. Once producers found out with Hamilton that audience members had $400 to spend on a ticket all of the prices increased. Obviously, if the enormous Phantom of the Opera can run for 20 years with $79 balcony tickets (sometimes $39) there is no reason Back The Future needs to charge $175 for the last row at the Broadway. Remember to factor in the reduction in cast and orchestra size as well as bonuses given to producers of not-for-profits which used to be sometimes $1 million in addition to their salary. Roundabout, which does not pay actors production contract salary for the first three months, I am looking at you. Of course ticket prices could be slashed in half and there would still be profit enough to send the kids to private schools. Union salaries have not increased 12% in the last 10 years and yet ticket prices have tripled. Yes you, Back to the Future without a star but with a $368 non-premium orchestra box office price plus $16 fee. Greed.

Thing is Hamilton ticket prices were selling for over $2000 in the resale market back in summer 2016. That’s why their producers increased premium tix prices to $850 back then so they would keep more of the money rather than have those profits go to ticket resellers.

I hope producers of hits like Hamilton, Wicked, Lion King, and even Phantom are hopefully reinvesting their profits for new Broadway works. Even if those new works fail, they still get income from those other long-running hits every single week.

It feels like Broadway shows are priced as an event which has changed the theatre going experience.