Sunday, November 27, 2011
New Pricing Strategy Makes the Most of Hot Broadway Tickets
NYTimes.com: The producers of Hugh Jackman’s song-and-dance-and-bump-and-grind show on Broadway were so bullish about his popularity that, even before the first performance last month, they raised prices from $155 to $175 on dozens of orchestra seats for the 10-week run. The bet is now paying off handsomely, so much so that the producers are increasing premium prices for the best seats in the house: what were $250 tickets are now going for $275, $325 or even $350, depending on the demand at particular performances.
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It's amazing what people are willing to pay to see a Broadway show. It's incredible to see on the one hand, but on the other, I find it nearly impossible to see these shows because ticket prices are so high. Of course these high prices reflect well on Broadway, but it makes these shows into even more exclusive events, as if they weren't already. I'm really torn. I wish more people could afford to see these incredible shows, but hey! money!
To me, it feels like taking advantage of ticket prices like this is doing a lot of negative things for the bigger picture, although it may be benefitting the theater now. It's reinforcing the idea that the shows on Broadway are not for everyone, but more of an upperclass luxury thing. $600 to go see a show with a friend? A one man show? It's more than a little absurd. I think the dynamic pricing idea is fine, but the range of prices should be a little more modest, and should be more accessible to everyone. It just doesn't seem smart to have such outrageous prices. If I'm in New York and I have the choice between a $20 standing room only type concert and a $350 theatrical production I'm never, ever going to choose the theatrical production.
The price of a Broadway show is almost out of my reach now! Raising the price in this economy I think is a fool hardy thing to do. If people get used to spending their money on the $20 concert, chances are they will continue to spend money on concerts instead of the show. I know Broadway is certainly not like a community theater, but I know one place in Pittsburgh that has practically put themselves out of business by raising the prices so much. They make the same amount of money with half the people. I don't think that is good business. The revenue has not gone up with the price. Attendance has gone down after the novelty wore off. Less people are seeing the shows and the psychological drain on actors playing for half full houses has to account for something.
This is pretty commonplace in other areas. It is good to know that Broadway is keeping up with the times of charging people what they we will actually pay. PNC Park will charge you $150 just so you can sit behind a guardrail so you can feel like an elitist. Back when Michael Jordan used to play in the NBA, tickets when your team played the Bulls cost more than when your team played any other team like the Pheonix Suns. Though I'm not a big fan of overcharging people. People will pay what they will pay. As long as their is cheap tickets to be had on Wednesday afternoons, I will be happy.
While I'm saddened that I can't see more shows on Broadway due to the high costs, on a basic level I can appreciate why. The very type of Equity contract these shows is on says it all "Production Contract." The primary focus of a majority of these shows is to make money. The producers are running a business and of course are going to do whatever it takes to make the most money. If they can sell all their seats for $300, why not? Unlike the LORT or regional theatre model, Broadway theatres aren't trying to build a subscriber-base, so would rather get a large lump of money from each person.
If these theatres can still fill their houses and charge these kind of prices than more power to them. It is sad that it means students and people who have less capital are more limited in what they can see but I can respect Broadway as a business. It is impressive in this economy that their sales have risen almost 5% since last year. Hopefully this is a sign that the arts are going to continue moving forward and progressing in a positive way.
What is interesting about this dynamic pricing model is in addition to charging more and more money for the seats and performances that are in the most demand, it also allows producers to charge less money for seats and performances that are less in demand. It would be interesting to see how much the average ticket price actually changed from before the dynamic ticket pricing was established. While I do agree that Broadway tickets are very expensive, I also understand that a) theater is an expensive endeavor and b) business will charge what people are willing to pay. If there are enough audience members who want to see Hugh Jackman badly enough to pay $300 for a ticket, then that is what Broadway will charge.
The divide between commercial theatre and regional theatre will continue to grow, especially as ticket prices do. It is sad that the less wealthy theatre goers do not get to see as many shows, or see the shows from a horrible seat, but that is the entertainment industry. If the business is about making money, then ticket pricing should reflect that. Although it might be an inconvenience to see a less popular performance or sit further away, you can plan how you see shows and what shows you want to focus on or spend more money on this way. The dynamic ticket pricing allows not only the producers but the audience to benefit on some level.
If attendance continues to drop on Broadway there will come a point when the profits will no longer grow due to ticket inflation. Live entertainment has priced itself out of the game for a large part of the population. Every sector of the live entertainment industry is raising prices and at some point in the near future they will need to just expect less profit from live shows. Theatre especially on Broadway could simplify and still give folks a marketable experience. This problem of raising prices extends to film as well. The movie theaters are also beginning to price themselves out of the entertainment game. Television and movies are also having trouble with how to distribute their product in an economically viable way. The profit margins in all the entertainment industries are going to have to fall or the number of entertainment outlets are going to need to fall in order to sustain themselves going forward.
If you want to see good theatre and you don't want to pay Broadway prices, than see something LORT. Many regional shows are just as good but they are not-for-profit, while Broadway is capitalist America. I applaud the price raise because it says to me, this is our industry working, this is our industry taking advantage of opportunity, this is our industry moving forward, this is our industry being able to pay out, this is our industry getting money so they can put on another, even bigger, better show. Since the pricing is dynamic it sounds like the show is seeing increased profit margins. Attendance is down but profits are up, which tells me they are getting closer to the point where supply an demand meet, which is great. It is not a new idea so it is about time Broadway joined the rest of commercial industry, and it seems to be serving them well.
I, like Chris above, am interested in the dichotomy we see here in the industry between the staggeringly high prices of the premium seats and the increasing numbers of standby, standing-room and rush programs that the theatres are putting in place. There's a pay-what-you-can culture developing, which certainly bodes well for hot-ticket productions like those on Broadway for both those affluent and willing to spend their money and for those devoted and willing to spend their time to get tickets. To me, that's not such a bad thing - on the biggest shows, let the chips fall as they may.
However, there are a few issues when you get to tourists, who currently make up a large portion of the audience. They must secure tickets in advance (in fear of missing the opportunity when they're in New York), but cannot justify the financial strain from the rising seat prices.
I'm interested to see if there will be any producers who strategically oppose the dynamic pricing scheme and low-ball their tickets in the interest of building a lot of demand quickly. We see that with a lot of Off-Broadway companies and the TKTS booth (and it also marks the death throes of a struggling show), but no theatrical producer yet has embraced a democratic pricing strategy from the outset.
These "Premium" tickets are ridiculous. However, people will pay the money so, I guess it is worth it. I think however, it is sad that normal (even those are way too high) prices tickets are unable to make enough money to support the work going on, and am glad that there are these outlets to get a bunch of "extra money". I wonder just how high these will climb?
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