Posted on February 24, 2014
Matilda the Musical, which has been playing on Broadway since spring 2013, is well on its way to establishing itself as a long-running hit musical. After being nominated for thirteen Tony Awards and winning five, Matilda’s sales remained at full audience capacity for the majority of the summer, and the production has grossed well over a million dollars every single week since last April – until two weeks ago, when Matilda fell below the million-dollar mark. Still, between the inclement weather and traditionally slower sales season of January to February, this is not necessarily a warning sign. For instance, this past week it was the third highest show in terms of increase in gross from the previous week (up $220,225). Matilda is one of the Broadway shows that is least frequently represented at TDF’s discount booth in Times Square. Dodger Theatricals, who partnered with the Royal Shakespeare Company to bring the musical over from London to Broadway, initially chose to discount at the booth for only a handful of performances in these past two weeks. The discount was only in the range of 30 to 40 percent (other shows often discount 50 percent). But recently they have started discounting the maximum allowed at the booth, which is the full 50 percent. Oddly, they opted to offer discounts only at the Times Square booth, not online or at the other TDF stations at South Street Seaport and Brooklyn. This bespeaks a hit show, with an odd twist – only a hit show has the luxury of declining the opportunity to discount, as ticket-buyers will be more willing to purchase at full price. It makes sense that producers tend to minimize their discounts in order to maximize their gross potential and recoup their investments as quickly as possible, but show some desperation in going to the maximum discount allowed. Still, this raises the question of when and why producers should choose to discount. Matilda has been hovering around 90 percent capacity for the past few weeks, and yet it did not always choose to discount – instead preferring to leave tickets unsold to create a manipulated ticket market by having less inventory. It is a tricky balance – and one of the greatest challenges of shepherding a show as producer throughout its run – to choose when to discount, and when to hold out for full-price sales and risk leaving seats empty. Broadway general managers devote countless man-hours to calculating the precise percentages and platforms on which to offer discounts in order to maximize gross potential. But this decision-making isn’t all quantitative, there is also the qualitative concern of a show’s brand image. Producers generally believe that when a show appears at the booth, ticket buyers will consider it to be less of a hit. For instance The Book of Mormon, widely known to be a tough ticket, never appears at the booth. Though Matilda sold over $12 million in tickets while it was still in previews, it hasn’t yet announced recoupment on its $16 million capitalization. Once a show is in profits, producers can breathe a little more easily, but at this stage Dodger Theatricals may still be treading carefully. Brand image is especially important in light of the fact that Matilda announced its US National Tour two weeks ago; the tour will kick off at Los Angeles’ Ahmanson Theatre in May 2015. It is important for out-of-town visitors to feel that Matilda is such a hot show that even if they don’t manage to snag a ticket during their trip to the city, they will be very excited to attend when the musical visits their hometown. Therefore, even if selling the remaining 10 percent of seats at a discount may lead to a higher gross in the short term, such a choice could harm the show’s brand image over time.
If producers do not discount anywhere else, they may choose to offer the show at the TDF booth because it is an easy last-minute option. Unlike discounts offered through NYTix or telecharge e-blasts, which require the advertising agency to design a flyer and the general managers to advise on timing well in advance, producers can turn to the booth in a pinch if they notice one particular performance is particularly low in ticket sales. Furthermore, booth discounts are not widely advertised; unlike direct mail discounts that arrive at homes around the country or ticket blasts that are sent to a slew of inboxes, the booth is a fairly private way to advertise discounts to tourists or New Yorkers who happen to show up that day and are rewarded with a whopping 50% discount on tickets to Matilda, something you cannot find anywhere else. TDF’s website only shows discounts from the past week, and then they disappear from record, which also protects the brand from dilution. Still, in offering discounts only at the Times Square TKTS booth and not on the internet or in-the-mail offers, are the Matilda producers favoring tourists and isolating locals from the lower priced tickets? Even Dodger Theatricals choice of the Times Square TKTS over the South Street Seaport and Brooklyn TKTS booths seems to yell at New Yorkers to stay away. Its true that locals can access the Times Square booth if they so choose, although it tends to be considered by most as a dire tourist destination, avoided by locals in almost all circumstances. Also, If it wasn't bad enough already, the huge pedestrian construction in Times Square right now is a further impediment to locals venturing there in search of those discount tickets. Therefore, Dodgers Matilda discount ticket strategy effectively prevents locals who cannot, or choose not to, pay full price from seeing the show. In contrast, local New Yorkers actually keep the Broadway industry alive during the soft months, but Dodger Theatricals tendency to prefer the booth over online discounts or other forms of direct response, may very well be ostracizing the regular ticket buying market, the very life blood of Broadway ticket sales. Every Broadway show, however, eventually wears out its unattainability, and it can be expected that in the next year or two, New Yorkers will have easier access to affordable Matilda tickets as Matilda ticket sales are not showing anywhere the same steep sales yield curve as The Book Of Mormon did at the very beginning of their run. A show cannot survive on discounting at the TKTS booth alone, unless Dodgers are in fact out to prove that it can. It wouldn't be the first time that the Dodgers have flown in the face of conventional wisdom. Next month sees Disney's Aladdin open and Matilda will soon face some stiff competition from Disney, who are the masters in this genre. The Dodgers do have a success on their hands in Matilda, just not the runaway success they had hoped for.