Why Theatre Tickets Are So Expensive! Part II
"Why are theatre tickets so expensive?" To find the answer, we continue our conversation from Thursday's column with an old friend of mine, a producer who has been involved with over a dozen Broadway shows in the last twenty years. (He agreed to talk on condition that his identity not be revealed, so I'm calling him Max Bialystock.)
VJ Okay, Max, so why are theatre tickets so expensive?
Max They're not. They're cheap! Who told you they were expensive?
VJ $80 for a musical? $60 for a play? That's cheap?
Max Considering the cost and risks of mounting a project these days, prices should be double that, in some cases triple. $250 for an Orchestra seat to a hot musical isn't that much. Scalpers get that all the time - and more.
VJ How much money do you think you lose to Ice, or scalpers, on a weekly basis?
Max Ice? There's no such thing as Ice on Broadway. All that got cleaned up years ago.
VJ You're lying.
Max Jeez, VJ! You've been around long enough to know nobody in their right minds talks about that!
VJ Okay, have it your way. Do you think you could get $250 for an Orchestra seat on a regular basis?
Max Yes, at least for prime Orchestra seats.
VJ So, why aren't you charging that now?
Max Maybe I don't want to be the first to do it - bad public relations. It'll get there soon enough. Somebody goes to $85 top this fall, somebody else goes to $90 top in the spring, sooner or later it'll happen before anyone notices.
VJ You know, I've known you long enough to believe that bad public relations wouldn't stop you from doing anything you wanted to. What's the real reason?
Max Smart guy, huh? Okay, the real reason? The unions. You jump prices too high too fast and you're going to have every union screaming bloody murder for a bigger slice of the pie. You'd end up losing money. You got to ease the prices up gradually, so you stay ahead of the contract negotiations every couple of years.
VJ That makes sense. What about all these plans I'm hearing to scale a house to provide some really inexpensive seats on a regular basis? Are you planning on doing that?
Max No, why should I? Cheap seats don't sell.
VJ You're gonna have to explain that one.
Max I can't remember how many different schemes, how many times we've tried to set aside blocks of seats - some darn good seats, too - for students and all that. Well, you know what? Unless you've got a SRO show on your hands that everybody wants to see right now, you never sell them! You stand there at the back of the theatre night after night and look at rows of empty seats and you wonder where are all those people who are screaming that tickets are too expensive. You know why they don't sell?
VJ Tell me.
Max Because if you price Orchestra or Mezzanine seats real cheap, people think there is something wrong with them. They don't buy them. That's why now I scale all the Orchestra and most of the Mezzanine seats at top price. If you do that, you sell them in a heartbeat.
VJ Sell all of them? At top price?
Max Okay, not all the time, but most of the time. You got extra top price seats left, you send them over to TKTS, where they sell them at the price you would have charged anyway if people weren't complaining all the time, and people are happy because they think they got a bargain.
I can scale a house so I got a dozen different prices - from top to real cheap - and sell out the top priced seats and have most of the cheaper seats empty. Or, I can scale a house where 70-80% of it is top price. You know what, when most of the seats are top price, even if I send 40% of the tickets for a performance to the TKTS Booth, I still make more money.
VJ Why don't the cheaper seats sell?
Max It's the tourists. Tourists are 60% of my business the first month a show is open, then 99% of my business after that for the rest of the run, unless it's a hot limited engagement. They go up to the Box Office and if all of my top price seats are gone, most of them won't buy the cheaper seats. Don't ask me why.
VJ What about all the regular theatregoers in New York?
Max They aren't a significant market numbers-wise, even when you add in bridge and tunnel. There aren't enough of them to fill up one of the smaller Broadway houses for more than a couple of weeks at best.
VJ What about students and common people who can't afford top price tickets?
Max That's what the TKTS Booth is for. Or, they can use those damned discount code things the accountants want you to use instead of the old "twofers," so they can target them for promotions.
VJ Granted, the TKTS Booth is a solution if you're in town and want to get a ticket for a show that day. But, what about the ones who are coming in from out of town, who want to plan ahead and buy good seats early so they get to see what they want?
Max Then they pay full price. You can't have it both ways.
VJ Why do you charge full price for previews?
Max Because I can get full price. And, if I'm opening a show that's going to depend on the critic's reviews for a decent run, I need to make every penny I can before opening night. Suppose the reviews are lousy and I don't get good word of mouth? But, mostly because why should I sell seats for less than I can get for them?
VJ To build a young audience that can't afford top price seats?
Max Again, that's what the TKTS Booth is for.
VJ And, you have no plans to start using different prices for different days of the week, like cheaper for Tuesdays or Wednesdays?
Max I've tried it before. The number of tickets I sell doesn't go up early in the week if I reduce the price. If I do that I sell the same number of seats and make less money. All you get is a lot of complaints about the more expensive tickets on the weekends. Nobody is grateful that you tried. Nobody says "thank you."
VJ So, bottom line, why is a top ticket price of $80 or $90 justified?
Max Because, bottom line, I really can't afford to produce the shows I produce for anything less than that. Regardless of what everybody thinks, shows don't run forever. You're damn lucky to get five or six months out of a play, and maybe a year to eighteen months out of a musical. I have to price the seats so that at 50% capacity I can meet payroll and expenses - crack the nut, as they say - and if I can get 70% capacity recoup or payback the original investment. Right now an $80 top price just about does that.
VJ What about when your show is a hit?
Max Then you make a little money. But - and there is always a "but" - six of my last ten projects didn't recoup their investment, even after the tours.
VJ Only four out of ten?
Max And, that's a damn good track record. Even the best producers don't manage more than five out of ten. Look, if you could guarantee that my next show will be an SRO hit and run for eight years, I'd happily stop raising the prices.
VJ I wish I could do that.
Max I wish you could, too. You can't. Nobody can. Look at the Broadway season that's just ended. Lots of plays, all the theatres were full, but nobody that I know made any real money. Most of them just managed to make enough to survive and maybe, if they are lucky, get enough investors to back their next project.
VJ So, in your view, ticket prices are only going to go up.
Max If we're talking about commercial theatre, Broadway theatre, then yes.
VJ And, you don't think any of the schemes to offer cheaper tickets will work?
Max No - and anybody who tells you different is blowing air up your bloomers.
VJ Well, I guess that's why it's called Show Business.
See you Thursday!
Past Rialto Columns
Search What's New on the Rialto