Broadway Economics

By Keith Weiss
History
In 1896, the Theatrical Syndicate was an organization that controlled the
booking of productions.
Syndicate monopolized the booking of first-class theatrical attractions
nationally because of the poor way business with productions was done
by independent theater companies that competed with the Syndicate.
Shubert Brothers, bought out the Syndicate around 1920, but became just
as controlling as the Syndicate was.
Before the Great Depression, Broadway was t its peak with nearly 270
productions on Broadway.

Broadway Vs. Hollywood
Between 1910 to 1925, 1,000 independent theater companies in NYC went
bankrupt.
Audiences were being drawn away from theater by the movie industry.
Musicals kept their fan bases because they were more entertaining than
regular dramas.
Producers demanded higher guarantees or larger percentages of the gross.
Managers began investing in movies and vaudeville.
Prices for one theater ticket in 1929 ranged from $3.85 to $6.60
Prices for one movie ticket were on average $0.60.
Movies attracted low-income audiences.
Ticket buyers could sit in gallery seats when watching a movie, which was
cheaper.
Many movie theater companies eliminated their theatrical competition by
buying theaters located on Broadway.
Inflated production costs quadrupled in price in 1928, so production standards
increased, which increased the likelihood of flops, or failed productions, so this
led to the development of theatrical unions.

Unions
These unions included workers that ranged from performers to stage
crew. Unions made sure workers got the pay they deserved.
Performers started getting paid for their rehearsal time.
The leading actor of a Broadway show was paid $1,000 per week.
Inspired by the Industrial Revolution, unions demanded greater pay
for its members, and went on strike if their compromises were not
satisfactory enough.
Throughout history, multiple Broadway unions have gone on strike for
better pay, dramatically affecting the economy of New York City.

Rock Musicals=Risk Musicals
As the history of Broadway progresses, many producers have to take risks in
the interests of the audience.
Ex:
Hair
Caligula
Rent

Tourism
Tourism draws in $4.5 billion of the New York
economy, including hotels and restaurant
services.
Producers try to find family shows to attract
tourists. Ex:
Disney Shows
Spider-Man
9/11 Effect on Sales
After 9/11, the decrease in tourism decreased
attendance for Broadway shows.
After September 11, 2001, there was an initial
drop in ticket sales of 75%.
Within nine months, the drop in ticket sales
was only 12%.
Kids Night on Broadway
In 2005, the Broadway Theater League began Kids Night on Broadway, which
is a year-round national audience development program in which kids ages 6-
18 get to see a participating Broadway show for free, with the price of a
regular adult ticket.
It nurtures a new audience of young people, who will hopefully develop the
lifelong habit of going to theater when they get older.

Book of Mormon Effect
The Book of Mormon remains an extremely
successful show that has been sold out since its
opening night in February 2011.
Mormon has made a combined total, including
royalties, of $170,871,548. Trey Parker and Matt Stone,
the creators of The Book of Mormon decided to
create a new kind of musical.
This musical appealed to South Park viewers.
The producers of the show chose to remain in a theater
with a small seating capacity and their cheapest tickets
at incredibly high prices.
Theater-goers demonstrated that the demand elasticity
for tickets to The Book of Mormon is elastic.