Box office records were shattered at many Broadway theaters last week

Mark Kennedy, The Associated Press, 1/3/11

Look who's sporting a big smile behind his mask on Broadway - none other than the once-mocked Spider-Man. The Broadway League reported Tuesday that "Spider-Man: Turn Off the Dark" took in a whopping $2,941,790 over nine performances last week, which is the highest single-week gross of any show in Broadway history. The musical shattered the old record held by "Wicked," which last January recorded the then-highest one-week take on Broadway with a $2,228,235 haul, though over an eight-show week. While the eight-versus-nine show disparity gives "Spider-Man: Turn Off the Dark" something of an asterisk, the Spider-Man producers pointed out that head-to-head last week with "Wicked" over nine shows each, their musical handily won. "Wicked" took in $2,712,535 last week. Both shows' haul reflect the use of premium seating, in which producers charge higher prices for certain days and certain seats. Also, "Wicked," which is performed at the Gershwin Theatre, has about 100 seats less than the 1,930-seat Foxwoods Theatre, home of the superhero musical. Many shows this holiday season added a ninth show to their regular eight-show week, and most had a happy holiday as a result, including "The Book of Mormon" with $1,752,601 and "The Lion King" at $2,444,132. About a dozen shows were at or near full capacity. "How to Succeed in Business Without Really Trying" with Daniel Radcliffe ending his Broadway run broke the box office record at the Hirschfield Theatre, grossing $1,910,224. Hugh Jackman also ended his 10-week concert show run at the Broadhurst Theatre on Sunday after having earned $2,057,354 in its final nine performances, the highest weekly gross recorded by the Shubert Organization, which owns the Broadhurst and 16 other Broadway theaters.

 

Commentary: Are theater ticket prices out of control?

Dominic Cavendish, The Telegraph [UK], 12/30/11

The phrase of the year, or so the Oxford English Dictionary would have us believe, has been the "squeezed middle". And yet what's this? Over in [London's] Theatreland, folk seem to be partying like it's 1999. There are hits galore. And the public is showing an apparent readiness to pay through the nose if need be to catch these hot tickets. A figure of about 60 [about $94] has become the basic stalls and dress-circle benchmark for musicals, but that figure is dwarfed by the "premium seat" option. Even without factoring in other related costs from booking and transaction fees through interval drinks and programmes to outlays on transport and babysitting, the question has to be asked: is the West End getting too pricey for our own good? If it's doing well, is it doing so at the expense of those who are feeling the pinch? A good night out at the theatre is now on its way to becoming a luxury item. Industry insiders mount a stout defence. If prices are higher, they argue, that owes much to the big hit taken by theatre owners and producers. "Before you've even got out of bed, 45% of your ticket money has gone elsewhere" says Nica Burns, producer and chief executive of Nimax Theatres, which runs five in the West End. [And] there's a strong market logic to [the] assertion [by] Julian Bird, chief executive of the Society of London Theatres, that, "if prices were putting people off, I don't think we'd be seeing the kind of attendance figures we're seeing". Nonetheless, there's a cash-strapped quality to Britain right now that sits oddly with the West End's money-go-round. No one, least of all the theatre industry, should let the annual ritual of celebrating its ongoing good fortune drown out legitimate rumblings of discontent from the rear of the stalls or up in the gods. If a chorus of disapproval on ticket prices really does grow apace, maybe it's time to act.

 

Commentary: UK's biggest theatre chain's ticketing chief on demand pricing

Interview by Dominic Cavendish in The Telegraph, 1/3/12, with Simon Palethorpe, Managing Director at the Ambassador Theatre Group, Britain's biggest theatre chain

Is it the case that you're looking to hike up prices for top seats to the best shows?

We spend a lot of time looking at how we can better match supply and demand -- and basically that has meant two things. It has meant pushing up prices at the top end with premium seats but it has also meant lowering prices at the bottom end. The overall figures suggest that the West End sells out 70% of its seats. Part of the challenge for the industry is finding pricing models that enable people to get into the 30% that aren't sold. There's quite a prize for the industry in getting that right. Certainly I spend more time thinking about the bottom price end and how we get greater numbers in to see the shows than I do thinking about squeezing a few extra pounds out of people at the top end.

Is dynamic pricing of the sort that airlines use being applied in the industry now?

We're generally selling more seats at the top end than we would at the bottom end. So it's not like an airline which would tend to sell from the cheap prices up to the top. What we've been doing is lowering prices to try and stimulate demand at the lower end, while pushing up the prices at the top end. It's true that if we sell out of seats at a particular price we will re-band either upwards or downwards -- the idea is to make sure we're keeping all price-points open for as long as possible. Suppose you have five different price-points depending on where you are in the house -- if we sell out of the mid price-point at 30, we might bring some from the more expensive band into that band in order to be able to continue offering the customer all five price-points. The analogy is that it's a bit like a retailer trying to keep their shelves fully stocked. Would I like us to get to a point where we're much more actively managing supply and demand? Yes I would -- and I think that will be beneficial to consumers. We will sell more seats and make the product more accessible -- and overall there will be more revenue coming to the theatre industry.

 

Movie theater attendance falls to 16-year-low

Amy Kaufman, Los Angeles Times, 1/3/12

Hollywood dropped the ball in 2011, as the movie business saw a decline in ticket sales and attendance fell to a 16-year low. As most in the industry had anticipated, year-end figures indicated that receipts in the United States and Canada dropped about 3% compared with 2010 to $10.2 billion, according to Hollywood.com. About 1.28 billion people headed to the multiplex in 2011, a decline of roughly 4% from last year, when 1.33 billion went to the cinema. "The issues that keep me up at night about moviegoer attendance and our audience are certainly not lack of appetite for the movies," said Brad Grey, chairman and chief executive officer of Paramount Pictures, which had the biggest box-office gross of any studio in 2011 with $1.96 billion in domestic ticket sales. "There's an audience for everything -- it's going to be about how we make up for lower sales at the box office and with DVDs through digital distribution. I wonder what the next incarnation of distribution is."

 

Commentary: Why do all movie tickets cost the same?

Derek Thompson, senior editor, The Atlantic magazine, 1/3/12

Like millions of Americans, I paid money to see Mission: Impossible, which made $130 million in the last two weeks, and I have not paid any money to see Young Adult, which has made less than $10 million over the same span. Nobody is surprised or impressed by the discrepancy. The real question is: If demand is supposed to move prices, why isn't seeing Young Adult much cheaper than seeing Mission: Impossible? Senior rates and matinee discounts exist, but movie theaters don't offer different prices for different films showing at the same time. "Since the early 1970s, at any given movie theater, one price has been charged for all movies, seven days a week, 365 days a year," Barak Y. Orbach and Liran Einav begin in their research paper that looks at pricing strategies for movie theaters. Uniform pricing isn't specific to movies. It's true for sports, where I pay the same price for a football ticket whether the Redskins are playing the New England Patriots or the St. Louis Rams. It's something of a mystery to Orbach and Einav that studios and theaters, so notoriously canny about finding profits, never experiment with higher prices to capture more money from inevitable blockbusters -- or with lower prices to fill up empty seats. With the onslaught from online streaming, legal downloads, and DVDs, studios and theaters are nervous as heck about pissing off what die-hards they have left by moving prices based on demand. (Although, you could argue that charging more for a 3-D movie is an interesting exception.) But Orbach and Einav find some evidence that where dynamic pricing was used, both the theaters and the studios benefited.

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