Ken Davenport - Opinions from a Broadway Producer

Just who are our premium ticket buyers anyway?

This could be one of my favorite "Market Notes"  yet.

Market Notes is a report that the Shubert Organization, which sits on top of a mountain of Telecharge data, spits out every month or so, to enlighten us on some our audience's buying habits.  The reports are written by Mr. Brian Mahoney, who I referred to as the "Swami of Statistics" in 2008, during my first year of blogging.  (Read that entry here)

This month, Monsieur Swami, is pulling the curtain back on those folks out there that buy our premium tickets.  These guys and gals are the equivalent of our "high rollers."  They want the best, and they want it now.  And they are willing to pay for it.  (As I like to say, there is always someone that likes to fly first class.)

But who the heck are they?

Here's a word-by-word report of what the Swami said:

As an industry, we make a lot of assumptions about buyers of premium tickets. One such assumption is that customers who buy premium seats will do it over and over, because they always want the very best. We ran some numbers recently and came up with a few interesting facts about premium buyers:

88% of the premium buyers made just one premium purchase in a single year; only 12% made multiple premium purchases.

For 40% of the customers who purchased a premium ticket, it was their only Telecharge purchase.

60% of the premium buyers saw more than one show in a year, but the others were not premium purchases.

While women are the predominant buyers of theatre tickets, men are the predominant buyers of premium tickets.

Most premium buyers are from out of town (65%); only 12% are from Manhattan. 

This data doesn't support the notion that there is a “premium buyer” who always wants the best seats. Why don’t buyers make multiple premium purchases?  Could the nearly 100% premium mark-up on orchestra seating be the deciding factor in how many premium purchases people make?  Would shows sell more premium tickets if the mark-up to its premium seats was only 50%?   

So we do have high rollers, alright . . . but they are specific to one show.  I call this the "Mormon" effect.  They gotta see one show, and they can't get tickets any other way.  So maybe my theory of just wanting the best isn't quite right. Maybe they are forced into premium tickets because it's the only thing available.

Swami?  Do you have an answer for that?  Is there a way to find out if Premium buyers looked for regularly priced tickets first? 

That question, and the questions posed in the repot about how much to mark-up a premium ticket are exceptionally important to the future health of our business . . . because as discounting initiatives increase, if done right, successful premium pricing could become a way to offset the amount of discounting that a show needs to do. 

 

(Got a comment?  I love 'em, so comment below!  Email subscribers, click here, then scroll down, to say what's on your mind!) 

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Where did we think Broadway was headed? A look back.

Listen to this quote:

"Ever since the advent of talking movies in the twenties, pundits have fretted over Broadway's demise.  The Great White Way is still around, continuing as it has for years - rarely prosperous, very occasionally brilliant, usually irrelevant, Broadway right now looks like a dinosaur.  That doesn't mean that the theater is doomed, however."

It could have been written yesterday, right?  

Nope.  Jump in your DeLoreon and go back in time, because it  was written in 1995 . . . 16 years ago . . . when I was just 1 year out of Tisch and playing Policeman #2 in the Yeston-Kopit version of Phantom at the Carousel Dinner Theater in Akron, Ohio.

The quote was the introduction to a fascinating article in NY Magazine called "Reinventing Broadway" by Michael Goldstein.  In it Michael offers "12 tough starting points" to reviving Broadway after describing it like this:

It's disorganized, shortsighted, and out of date.  The unions are strangling it.  Its audience is aging, its economics insane.  Forget about customer service.  Broadway is gasping for breath.

His 12 points:  

1. Admitting that Broadway has a problem that must be confronted
2. Finding a leader
3. Taking on The Times
4. Just saying no to designers
5. Busting unions
6. Securing tax breaks for new shows
7. Opening the Tony awards to Off Broadway
8. Introducing the virtual box office
9. Scalping one's own seats
10. Creating profit-sharing plans
11. Serving up McTheater
12. Bringing in new music

Interested?  Read his explanation each point here. It's a great read, whether you agree with him or not (and I do and don't depending on the subject).  But it's fascinating to see how much things have changed since 1995 and how much has stayed the same.

I got a hold of Michael, actually . . . and hoped to hire him to write an updated version of the same article to see what 12 points he could offer us 16 years later . . . to make sure we're still around 16 years from now to complain about the same issues.  

But unfortunately, Michael has left the biz.

So maybe we could write our own!  Comment on this blog with one tough to-do that would help Broadway reinvent itself like Michael wanted.  Make it a tough one.  But make it realistic. 

And maybe 16 years from now, we'll check back in and see where we are.  By then, you won't have to write blogs, you'll just have to think them.

Got it?  Go.  One Tough To-Do.  

But before you comment, read the article.  (If you click this link from a phone, scoot past the awkward article that pops up and go to page 27.)

 

(Got a comment?  I love 'em, so comment below!  Email subscribers, click here, then scroll down, to say what's on your mind!) 

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FUN STUFF 

- 84 Days to Godspell!  Read the day-by-day account of producing Godspell on Broadway here.

- Win 2 tickets to The Voca People. Click here!

 

Broadway's 4th and Final Quarter Results: How did this season shape up?

I have an alarm in my Google Calendar set to go off at the end of every Quarter, to remind me to write my End of Quarter analysis of how the Broadway season is progressing.

That alarm went off last week, as it should have, at the end of our 52nd week.

Yet color-me-confused when there was no season-ending press release announcement from The Broadway League.  Huh.  So I waited to see what would happen this week.

And sure enough, I got my answer.

This season had 53 weeks!  Apparently, "to account for variances in the calendar year and in an effort to maintain an end-of-May end to the season" we add a week to the season every seven years.  Go figure!

This bonus week explains why the season results were up a whopping 5.9% for gross ticket sales at $1,080,562,880 and up 5.4% in attendance at 12,534,595.

Take out that 53rd week, and we can compare apples to apples and season to season. 

The good news is even without the extra frame, our grosses would have been up 3.1% and our attendance up 3.6%.

I am proud to say that I called the upticks, but since attendance had been down 3 years in a row, I figured it couldn't get any worse.

So what caused the positive swings this year?  We had 42 shows open this year, so that significant number brought some extra bodies and some extra bucks.  And one of those shows was a little darling of the press whose title rhymes with Biderspan. That super-sized muscial quickly joined the million dollar club and packed its enormous theater with thousands of people just waiting for an accident to happen.  Say what you want about it, but we owe a lot of this year's success to that sucker. 

So what happens next year?

That one is tougher to call.

Obviously we're going to be down from the 5% figures because we've got one week deficit as we return to our previously scheduled program of only 52 weeks a season.

But how will we compare to the 3.6% and the 3.1% figures?

Unfortunately, I'm betting that our gross will stay flat, maybe up or down less than 1%.  Our attendance will drop a bit, though.  Why?  It looks like a light Fall to me without a ton of new product, and as we discovered this year, new product and good product get people to show up.

One thing I am sure about . . . I'll blog about it!

See you then!  And happy end of the season to ya!

(Got a comment?  I love 'em, so comment below!  Email subscribers, click here, then scroll down, to say what's on your mind!) 

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The Sunday Giveaway: 2 Tickets to The Off-Broadway Co-Pro of The Shaggs

What I love about the theater is that even competitors can find a way to work together.

In the wake of the financial crisis, several non-profit theaters around the country got creative about how they could continue to produce new works despite a challenging fundraising environment.  Rather than shortening their seasons, many took a lesson from The Godfather and made it their own—by not only keeping their enemies closer, but actually making them their friends. 

And thus, the co-production was born, as two (or more) non-profits shared in development costs, production costs, etc.  And everyone, audience included, got to reap the benefits.

This idea was so successful, that even now that we're climbing out of the financial worm hole we've been in for 2+ years, the concept continues.

There's an example of a co-production happening right now Off-Broadway, featuring the Wonder Twin powers of two of NY's heavyweight non-profits, Playwights Horizons and New York Theatre Workshop.

The show?  The Shaggs by Joy Gregory, Gunnar Madsen and John Langs.  

The Shaggs is a new musical based on a true story about a male Mama Rose, trying to turn his 3 talentless daughters into Rock & Rock icons, whether they like it or not.  

And we've got tickets!

Here's how you can win two tickets to The Shaggs:

Comment below, and tell me . . . in one sentence, why you should get the tickets.  For example, "I should win the two tickets to The Shaggs because I actually believed The Rapture was going to happen and now I need something to get me out of my depression."

Ok?  

Comment away and I'll pick a winner.  Good luck!

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FUN STUFF

- Come to our Tony Awards Party!  Click here for more info and to get your ticket now! 

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When are the worst times of the year for Broadway shows?

If you asked anyone when the worst weeks of the year are for Broadway, I'd bet you the brand new pre-release of The Book of Mormon CD that I got yesterday the answer you'd hear would be September and January.

But is that true?  

I've never been a fan of anecdotal evidence, so with some help from one of my assistants, Jason Najjoum, I looked at the weekly grosses of Broadway shows for the last ten years, and found the 10 weeks with the lowest average weekly grosses.  

Here's the list, starting with the weeks with the worst averages:

1.  Week #5 - First week of February
2.  Week #18 - Last week of April
3.  Week #10 - First week of March
4.  Week #9 - Last week of February
5.  Week #44 - Last week of October
6.  Week #19 - First week of May
7.  Week #6 - Second week of February
8.  Week  #46 - Second week of November
9.  Week #17 - Third week of April
10. Week #4 - Last week of January

Funny, isn't it?  September doesn't appear in the Top 10.  And there are two consecutive three week runs in this list:  

- Last week of January, First week of February and Second week of February.

and . . . the surprise that I was looking for . . 

- Third week of April, Last week of April and First week of May.

So, looking at the average weekly grosses only, we just went through one of the worst times of the year.

Now, it may be no one's fault but our own.  While I do believe that late April/May is not the best time for theatergoing, remember we are looking at average weekly grosses.  So if we're putting more product on the street during this periods (and we know we are in late April/May because the Tony eligibility cutoff is usually at end of April), we're driving our own average grosses down.  

It's easy to look at the best weeks of the year.  It's hard to look at the worst.  But this is where we can learn the most.  By looking at the above, we know when we have to market more aggressively.  We know when we should avoid opening.  

And we know that what we think we know is not always what's the truth.

It's not the nose that knows.  It's the numbers that know.

 

(Got a comment?  I love 'em, so comment below!  Email subscribers, click here, then scroll down, to say what's on your mind!) 

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Where will Broadway be in 20 years?

I saw a musical set in the future this week, and it made me wonder just what Broadway will look like a couple of decades from now.

It has actually been almost 20 years since I arrived here in Manhattan, as a freshly scrubbed college sophomore, and I've certainly seen some changes during those twenty years.

In 1991, 42nd St. was not somewhere you wanted to hang out on a Saturday evening.  

We had just started giving seat locations to ticket buyers over the phone. (Previously, customers just bought a section and didn't know they were sitting until they walked into the theater.)

And an ad in The New York Times actually sold some tickets. 

So where will we be in another 20 years?  

Will Wicked still be running?  How much will tickets cost?  Will we have more theaters?  Less?  The same?  What will be the "new way" to sell tickets? (Email blasts didn't exist 20 years ago.)

(My answers?  Yes.  $500.  The same but 1-2 more non-profits will occupy those theaters.  And everything we do will be done through our "phones".)

Tell me your predictions.  Where will Broadway be in 20 years?   

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Rant alert: Stop telling me you can't afford theater tickets!

I was teasing an industry friend of mine the other day who shall remain nameless (although I am biting my fingertips right now--I so want to type it) because he hadn't seen Miss Abigail's Guide . . . yet.  I was actually going to let him off the hook when he pulled me aside and said, "Ken, listen, in all seriousness, I am going through a tough time right now . . . and I haven't seen ANY theater because frankly, I just can't afford it."

My first thought?  Pity.  When someone says, "I can't afford it," about anything, your heart goes out to them, right?  It's the ultimate out. 

But I had a theory, and I decided to test it out.

"NAMELESS PERSON," I said, "Can I ask you something?"

"Sure, Ken."

"Have you seen a movie in the last month?"

"Well, yes, I have."

"Have you seen more than one movie in the last month?"

"I've seen two."

"Ahhh, I see.  But you can't afford the theater, right?  You just spent at least $25 on movie tickets.  You know about TDF, right?  You know about 20at20, right, where you can see shows for $20?"

He didn't answer.

I could have pressed on . . . "Did you have popcorn when you were at the movies?  Oh, and do you drink Starbucks?  Watch Netflix?"

But the point wasn't to embarass him . . . the point was to demonstrate how the problem isn't price.  The problem is value. 

Here was a theater person, who was claiming that theater tickets were too expensive . . . who chose to go to the movies instead.  The movies were of a greater value to him.

And that's our problem.  

There are cheap ways to see theater.  Period.  And people who can't find $20, $30, $50 or yes, even $120 to see a show don't value the experience enough to work at finding that money.  (And please, don't challenge me to say that you're different and you really don't have even $20 to see a show, because I will come to your house and do an audit on your life and find $20 somewhere, I promise.)  

And if theater folks won't work at finding those extra few bucks, how are we going to get ordinary folks to do it?

So the next time you find yourself saying "Theater tickets are too expensive," stop yourself.  Man up and admit it.  Say, "I don't find enough value in going to the theater."

If we admit the problem, maybe we'll come closer to a solution.

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Favorite Quotes Vol. XXX: How risk in real estate is related to us.

I was chatting with a very unqiuely intelligent two graduate-degreed guy today.  The degrees?  An MBA and an MD.  Yep, a Doctor who could tell you how to live an extra ten years, and then tell you how much those ten years will cost you.

He told me a story about his first class in Biz School, which focused on investing in real estate, whether that meant your own home, or something you were looking to flip.  He said one of the very first things the Prof. said was . . .

If you're not sweating just a little bit each month to make your mortgage payment, you didn't risk enough when you made your purchase.

This quote hit 'home' for me, because when I bought my apartment 15 years ago, I could have had a much bigger place for just a bit more.  I could have made it work, but it would have been a little tougher to make the payments, and I didn't want to risk it.  Well, 15 years later, that other apartment increased in value a lot more than my current apartment.  But I wanted to play it safe, and live comfortably, rather than challenge myself just a bit.  

And I lost out because of it.

It's a great real estate lesson . . . but isn't this quote also true about in everything in life?

If you want to do big things, whether that's write a musical, produce a play, make money in the stock market, or heck, even have a wonderful marriage and family  . . . do you think you're going to get it without a little bit of sweat on your brow every once in a while?  You think you can achieve your dream without that little nauseous knot in your stomach every so often  . . . you know, the one that scares the crap out of you . . .  but also makes you work a little harder to make sure you do get what you want?

Everyone gets scared.  And everyone sweats.

What that Biz Professor was saying, and what I am repeating, is that if you're not sweating, that's when you should really be scared.  

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FUN STUFF:

- Enter The Sunday Giveaway!  Win two tickets to Mamma Mia on Broadway!  Enter today.  

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- Take our NY Times Survey!  Will you read New York Times reviews behind a Paywall?  Click here to voice your opinion.

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Will the New York Times paywall affect the power of their reviews?

We all knew it was coming.

The parent company of the NY Times has been bleeding money for years.  Putting the online version of the paper behind a paywall was inevitable.

And now it's a reality.

I received an email from Arthur Sulzberger, Jr., the Publisher of The New York Times, last Friday, informing me that the Times was introducing the "digital subscription" which would limit the access to articles on NYTimes.com if you were not a hard paper subscriber.

However, The Times is no dummy, and at first glance it seems they have chosen to adopt a more liberal policy for the casual reader then some of the other Paywalls out there (poor Linda Weiner at Newsday - I love her stuff - but haven't read it since she got tossed behind the Wall).

Here are some of the highlights of The Times new accessibility policies:

• You can read 20 articles a month at no charge.
• On smartphones and ipads apps, you can only read Top News.  Everything else is behind the wall.
• Readers who click a link on a blog or other site that directs to a Times article will have access to that article, even if they are already at their 20 article/month cap.

So the big question is . . . if you're a NYTimes.com reader but not a subscriber to the paper, will the above change your reading habits?  Will you pay if you read more than 20/month?  

And what does all of this mean for theater features and reviews?  

Everyone who studies consumer behavior knows that the moment you add a price tag to something, you're going to lose people, no matter how minor the increase.

Even if you went from free to $1, the quantity of your customers is going to drop.  

That has to mean less of a reach, right?  

So many questions . . .which means it must be time for a poll!!!  

Click below to answer a 3 question survey about whether or not you'll read a review behind a paywall.  

Results will be published a week from today!  

Click here to take the survey!

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2 Ways to get rid of discounting on Broadway forever.

I promised this blog for yesterday, then bumped it to today.

And now I feel like a guy who is about to tell a joke and quickly realizes his audience has heard it before.

Because my two ways of decreasing discounting on Broadway are not that revelatory.  In fact, they are so simple, you'll probably want to electronically punch me in the face for hyping the thought that I had a from-the-mountain-top type of answer to solve Broadway's discounting ills.  

So, without further a-doo-doo, here they are:

1.  Make better shows.

Great shows sell tickets.  Full price tickets.  Now the real question is, "What makes a show 'better'?"  As I've said before, people aren't price resistant . . . they are value resistant.  They have no problem paying full price plus some when they feel the value of the experience outweighs the cost.  What increases value?  Great writing, big stars, big belly laughs, sloppy tears, spectacle, etc.  It varies for every audience.  Find out what your audience values and do more of that.  If you want a clue as to what the Broadway audience values, well, that's easy . . . just look at what shows sell out and at full price.  You might not like what you see, but that's the story, morning glory.

2.  Produce less shows.

There are a pretty fixed number of people that see Broadway shows every year.  It varies by a few percentage points every year (and this year it's going back in the right direction, thank whomever you pray to), but it stays somewhat constant.  If we reduced our supply for those wanna-see-a-show folks, discounting would decrease, because customers would end up fighting over seats, rather than waiting to get a discount offer in their inbox.  Less supply, greater demand.  It's Econ 101.  

So there are my two ways to get rid of discounting.  What do you think?  Want to e-punch me yet?  I kind of do, because they're both "duh" ideas.  #1 - We're all trying to create better shows, right?  No one sets out to create crap (although I do think we can get a lot better at remembering who our audience is before we spend a few million bucks).  

And #2?  People aren't just going to stop producing. And that's the great thing about this country, this city, and our business.  If you've got an idea that you're passionate about--so passionate that you can convince other people to follow you and put up a few million (and you can get a theater)--well, then, by golly, you should be able to produce your show.  But, since there are only a fixed number of people that see Broadway shows per year, and since there seems to be more available theater seats than that number, you best be prepared to discount.

Discounting is here to stay (and actually it ain't that new, it's just more out in the open).  The modern consumer doesn't just want a discount, they feel entitled to one.  

So trying to get rid of discounts altogether is futile.

What we can do is get a lot smarter about how we use them.

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FUN STUFF:

- Enter The Sunday Giveaway!  Win 2 tickets to see Billy Elliot The Musical on Broadway!  Click here and enter today!

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