Despite a record number of Broadway shows now breaking $1 Million per week in revenue, still no guarantee of profitability or success
Broadway certainly knows how to bring home the bacon. At over $32 Million a week in total revenue for all Broadway shows, the Broadway industry has started to become the business behemoth that it always knew it could be, despite morphing into what the creative types in the business loathe. Now there are 13 Broadway shows that make over $1 Million per week in ticket revenue and with a bankroll like that, investors are flocking to sink money into the next big show on Broadway.
On a regular weekly basis, it is expected that shows like Hamilton, Book of Mormon, Lion King and Wicked are sure to break the $1 Million barrier, as they are consistently the top show revenue generators on Broadway today and their brand looks set to continue. What is new is that It now appears that the middle and lower tiers of Broadway shows are also making it over the Million dollar hump. Harry Potter, Aladdin and Frozen are pretty strong shows in the middle tier that swell during the Summer vacation due to their younger demographic, but their numbers have remained crisp throughout the year and then heading into the Fall, they will remain head and shoulders above the $ Million barrier. Middle branded shows like Ain't Too Proud, Dear Evan Hansen and Hadestown have sold strongly and also remain in the Million Dollar club, at least for the time being, as their numbers have begun to waver. The new Broadway entries of Moulin Rouge and the (now closed) Cher Show, identify that even a show revenue of over a Million dollars a week does not guarantee that the show can stay open, especially if their weekly costs are $1.1 Million and the show investors will take a bath.
Broadway Show Ticket Analysis Chart w/e 08/25/19
High Ticket Revenue, But Higher Production and Operating Costs
The high Broadway revenue numbers for the 13 shows in the Million Dollar club hide the fact that the costs to put on the production have also soared. Actors want more money, audiences demand bigger names, theatre landlords get a bigger cut of all ticket sales and the electricians and stagehands unions make sure that they get paid well, often at over $1000 per hour. It is these factors that all contribute to the runaway investment costs that a Broadway show must have squared away even before they raise the curtain at their show. The barrier to entry has become untenable for anything other than a sure-fire winner.
The Record Broadway Show Revenue Numbers Fail To Show Other Market Losses
The Broadway weekly revenue numbers may have grown from $25 Million five years ago to over $32 Million today, but the big numbers hide a dirty little secret. This increase in revenue numbers may not be reflective of an actual increase in overall Broadway income, but really just an increase in the amount of income the show actually receives through its primary sales channels. Both Brian Mahoney, the Vice President of Ticket Sales at the Shubert Organization, and Eric Schneiderman, who served as the 65th Attorney General of New York from 2011 until his resignation in May 2018, have touched on this point before. As Broadway shows get to price their product more closely to what the public will actually pay, it cuts out the profit yield that Broadway ticket brokers had been skimming for years, by reselling tickets on the secondary market at a much higher price. Secondary market sources never disclose their total revenue from the Broadway show tickets that are resold, but it has been estimated that their weekly profit is another $30 Million on top of the official Broadway ticket revenue, which is not unexpected when brokers will buy a Hamilton ticket for $500 and often resell it for over $2000. As the Broadway industry claws back some of this revenue, it gives the false appearance that this is new revenue, when it is in fact often being moved from one line item to another, namely from ticket brokers to the shows themselves. Industry insiders will often refer to the total Broadway market as a $60 Million weekly pie, that is divided up between shows and brokers, but as shows get wise to their own ticket pricing with technologies like dynamic ticket pricing, they now receive a bigger slice of the profits than Broadway ticket brokers do and that has put the brokers back on their heels.
It should be noted that neither Brian Mahoney or Eric Schneiderman directly contributed to the article.