‘The Book of Mormon’ Inks Deal with StubHub.com

The Book of Mormon now officially sells tickets on StubHub.com.

Since its opening in 2011, the Broadway production of The Book of Mormon has been selling out its houses at the 1,006 seat Eugene O’Neill Theatre.  With rampant demand for the satirical musical written by South Park creators Trey Parker and Matt Stone, along with Avenue Q writer Bobby Lopez, the show has regularly seen premium ticket prices as high as $477.  The show’s lead producers Scott Rudin and Anne Garefino have often been at the cutting edge of strategies to maximum their ticket revenue, utilizing dynamic pricing to vary ticket prices throughout the house in line with demand.  As of just week ago, they have announced a new partnership that changes the game for the Broadway ticket marketplace: they will now sell tickets on StubHub.com.

Book of Mormon and Stubhub join forces

Book of Mormon and StubHub.com  join forces

StubHub.com, an online ticket marketplace owned by eBay, has grown from America’s largest secondary-market ticket marketplace to the world’s largest ticket marketplace.  The secondary market for tickets refers to when tickets are re-sold, often at a higher amount than their original price, especially when the primary ticket sellers have sold out their inventory.  Another example of a secondary-market ticket site is TicketsNow.com, which is an acquired subsidiary of Ticketmaster.  Ticketmaster often redirects its customers to TicketsNow.com when the original inventory is sold out, which is effectively the same thing as selling tickets at a higher price through the same outlet.  Critics of secondary market ticket sites consider them to be just another form of scalping, and thus the legality of such sites is often questioned.

In an unprecedented move for Broadway, The Book of Mormon has decided to utilize StubHub.com as another outlet to sell their higher priced premium tickets.  In this way, StubHub will not be functioning as a secondary ticket marketplace, but rather a primary ticketing outlet.  Presently, the primary ticketing outlet for Broadway shows is more often than not Telecharge.com, which is owned by the Shubert Organization, one of the major Broadway landlords.  Therefore, this decision will present StubHub as a direct competitor to Telecharge.

It is common for producers to turn to additional outlets to help move their inventory, yet this is generally done in the form of discount ticket sales.  When sales are slow for a certain show, producers will often offer lower priced tickets either by direct mail to potential ticket buyers’ homes, or through online promotions by email or on websites.  However, the decision to sell premium seats for this hot-ticket show specifically through StubHub is an interesting maneuver, especially as the StubHub customer base may not be accustomed to seeing theatre options on the site.  StubHub’s biggest business comes from the music and sports industries, and this will present a Broadway option to this largely untapped audience.  On the other hand, the advantage from StubHub’s point of view is that it will help shift their reputation from that of a glorified online scalper to a more legitimate ticket sales outlet.

In any case, this novel approach presents an interesting dilemma for the Shuberts, who own Telecharge.com.  If premium tickets can be sold directly though secondary outlets commonly known for scalping tickets, there is a grey area between the primary and secondary market ticket outlets that had not previously existed for the Broadway marketplace.  If they neglect the opportunity to invest in secondary outlets, like Ticketmaster did with TicketsNow, then they might very well be losing profits in the long run.  Still, for now, The Book of Mormon’s new partnership will be a noteworthy case study to see if the StubHub customer base opens up new avenues for premium Broadway ticket sales.

Book Of Mormon Tickets Push New Price of $500 Per Ticket and Raise the Very Lowest Ticket Price to $149

Book Of Mormon

Book Of Mormon Sets Broadway Ticket Price Record

It’s already the highest priced ticket on Broadway and regularly has the highest “average paid attendance” (last week it was $191.55), but in a bid to further thwart ticket brokers, recoup some of the profit for the show’s investors, and raise money to finance the touring productions, The Book of Mormon has set a new ticket pricing schedule that raises the stakes in its premium and cheapest seat ticket prices to new Broadway ticket price records:

Premium orchestra seat tickets during popular show times are now $477 + fees. At less popular times, these seats are now $352 + fees.

Even the very back rows in the mezzanine, which were previously the only bargain at Mormon at $69 each, have been raised to $149 per ticket (these tickets are set to increase again to $159 after July 2013).  During the holidays and other popular times, the “worst seats in the theatre” have been raised to an astonishing $255. This puts the difference between the best premium seat in the house and the very worst seat at just $222, a difference of only 50%, which sets another Broadway record for lack of pricing diversity. In a bid to not completely divorce themselves from lower priced tickets, Book Of Mormon does still offer sixteen “limited legroom” seats in the very back of the mezzanine for $69, but these seats are not available online or over the telephone – and even in person,  they are sold a year in advance and for the the last eight attempts by this writer, no such tickets have been available at the box office.

All Book of Mormon tickets remain sold-out for a rolling year. But the official face value of Book Of Mormon tickets (which is somewhat academic) is now:

  • Amex Premium Ticket Desk tickets are $252.00 – $477.00
  • Select Mid-Premium Seating tickets are $227.00 – $299.00
  • Select Premium Seating tickets are $352.00 – $477.00
  • Select Premium Seating tickets are $477.00
  • Premium Seats: $352 (off-peak) – $477 (peak)
  • Regular Orchestra and Front Mezzanine Seats: $252 (off-peak) – $299 (peak)
  • Rear Mezzanine Seats: $149 (off-peak, raising to $169) – $252 (peak)

telecharge

The Book of Mormon operates on a rolling-year ticket purchase, so all well-placed regular priced tickets are sold out a year in advance.  Each week the box office makes another set of tickets available to buyers (usually a week’s worth), most of which are purchased by ticket brokers (who are the only people that would normally buy tickets a year in advance). This leaves only the less well placed ticket inventory available for the same price, closer to the performance date. For example: a ticket for a seat in Mezzanine row J on the month prior to the performance is the same price as a seat in Orchestra side row A, but only when sold a year in advance.

Ticket brokers have been actively speculating on The Book of Mormon tickets since the show received its bevy of awards at the 2011 Tonys, which drove up interest in the show by leaps and bounds. Recently, Book of Mormon tickets have become so hot that ticket brokers have even resorted to sending their staff down to the daily ticket lotteries because of the tremendous profits that can be made by selling a $32 front row seat for $400 after winning the ticket lottery – in some cases selling the tickets to clients before winning them (this is known as naked short-selling in the stock market).  Other ticket brokers can be seen on the day of the show selling these ‘recently acquired’ tickets outside the theater 30 minutes prior to the performance. Brokers have brought their full set of market manipulation techniques to bear through practices like drip feeding or scalp seeding – practices that are illegal in the New York stock market, but perfectly acceptable in the Broadway ticket market. More recently, ticket speculation for The Book Of Mormon has reached a fever pitch and is now starting to look a lot like the 1624 Amsterdam Tulip bubble, which ended disastrously for both the buyers and producers. It’s that speculation bubble that all others are now judged by and Broadway may be heading that way.

Creatively speaking, the Eugene O’Neill Theatre is the perfect size for The Book of Mormon, but from a financial perspective, it’s clear that the size of the theater is drastically limiting the revenue that the show could potentially achieve – see The Book of Mormon on the Broadway ticket sales analysis or the Broadway sales chart.  With only 1100 seats per show and eight shows per week, The Book of Mormon is missing out on a much higher attendance potential when compared with its two cousins in the the top three Broadway show list:  Wicked and The Lion King. (The disparity can actually be seen across all Broadway shows in “total attendance” when compared to Book of Mormon.)

With The Book of Mormon producers clawing back the profit from the ticket brokers by setting the new standard for pricing for this show, ticket brokers will in turn pass these price increases onto their own clients.  This could set the after-market broker ticket pricing on The Book of Mormon on Broadway at $750 to $1000 per ticket, from the $500 to $600 that they are currently on, a potential bubble in the making.

As The Book of Mormon is now the number one show on Broadway, it has within its grasp the opportunity to change the Broadway ticket game by cutting out ticket brokers for good. It’s clear that Mormon no longer needs brokers to promote the show, so if they were to add buyers’ names on tickets and demand government ID to match at the door (much like airline tickets), it could recoup all profit for the show overnight, cut out all ticket brokers, and provide consumers with a more equitable situation than the one currently being experienced with runaway pricing, no available ticket inventory and market manipulation.

Book of Mormon touring shows open at various locations across America in the coming months, but it’s unclear how this will affect sales of the New York Broadway based show tickets.  Ticket brokers may find themselves with unsold inventory, which could potentially crash the whole Broadway ticket market – something that has never happened in the history of Broadway, even dating back to the Broadway ticket speculation that transpired with the reign of Joe LeBlang in the early 1900s, when Broadway theatre had just moved uptown and the Broadway business was in its infancy.

But then again, Broadway ticket revenues weren’t $25 million per week and face value Broadway show tickets weren’t pushing $500.

Book of Mormon Regular Tickets Price Blows By Broadway’s $150 Ticket Milestone

Book of Mormon Tickets Increase

Trey Parker and Matt Stone’s The Book of Mormon recently crossed the great ticket price divide by increasing its regular-priced orchestra and front mezzanine tickets to $155.
The Premium ticket prices remain unchanged at $300 – $350.
This now makes Book Of Mormon the most expensive ticket on Broadway in history.

Clearly this move is a response to the strong ticket sales and the continued love-fest of ticket broker speculation towards the sold-out show. The last time a milestone like this was broken was back in 2002 when Wicked blew by the $100 mark and never went back, much to the chagrin of Broadway fans.

The Book of Mormon may be suffering from irrational exuberance and may run the risk of overselling its position and with over 40% of all its tickets being sold to ticket brokers, Book of Mormon could suffer a painful crash in ticket sales if ticket speculation cools abruptly when ‘the next big thing’ materializes, since ticket brokers and speculators are notoriously fickle and have no brand loyalty other than to what is ‘hot’ and selling well. The scheduled regional tour of The Book of Mormon could dilute the aftermarket ticket value of the show and become a catalyst to force the ticket brokers to ‘short’ their ticket inventory and flood the market, possibly resulting in empty seats in the theater — giving the appearance that the show is on the wane, even though 100% of the tickets have actually been sold.  Once the public’s “perception” is that a show is on the wane, it could change the Book of Mormon ticket ticket landscape dramatically – All Broadway shows like a soft landing in sales, ticket crashes are bad for business, affecting audience, producers and ticket brokers.

Historically speaking, there are many other Broadway show examples that have suffered through this process of over-hyped ticket speculation by brokers, only to crash out quickly.  But more recent examples like Jersey Boys didn’t quite dampen to the extent anticipated and the show sales buoyed after the other major city fixed shows opened and the regional tour began.

The higher ticket cost for The Book of Mormon does, however, provide the Broadway show producers more of the profit, reduces the ticket brokers’ profit, and allows the show to break even more quickly.

Having said that, Broadway shows still provide a great value proposition when compared with other entertainment choices in NYC. With a 3D movie now costing $20 person, the live entertainment of a Broadway show is like having a live performance up close and personal, with a noteworthy Broadway (or Hollywood) actor in your living room, for around $100.