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What's the Matter with Broadway? A Statistical Analysis.
Can Broadway make a dramatic comeback from its pandemic-induced downturn?
Intro: The Phantom of Broadway.
Last week, Broadway's longest-running show, The Phantom of the Opera, closed its doors after a record-setting 35-year run. The iconic musical produced an incredible 13,925 performances, created an estimated 6,500 jobs, grossed over $1.3 billion in ticket sales, and performed for over 20 million people in New York alone. Somehow, a show that initially garnered negative reviews, heavily features opera music (not the most popular genre), and is based on a French novel from 1909 established itself as a cultural institution.
But Phantom's departure is not a one-off tragedy, as the theater industry has struggled mightily since the COVID-19 pandemic. Over the past two years, Broadway news coverage has painted two contradictory pictures: 1) that of a broken industry floundering to recapture its magic and 2) a returning hero graciously welcomed back by passionate theater lovers. Consider the following selection of conflicting headlines:
'It's a hard time': why are so many Broadway shows closing early? - The Guardian, January 2023
Broadway Bounces Back With 'Best Week Since the Before Times' - New York Times, January 2023
Broadway comeback still faces hurdles to bring audiences back - Yahoo, July 2022
Broadway Shows See Some Box Office Momentum - Deadline, July 2022
So is Broadway dead or recovering gracefully from its pandemic lows? Do Broadway's perceived problems stem from COVID hardship, or were there existing faults before the pandemic? And how is the industry responding to macrolevel cost and consumer demand fluctuations? Let's find out.
Broadway's Recovery: The Good.
Coincidentally, Phantom of the Opera was the last performance to run before the COVID-19 lockdown. On March 12, 2020, Ben Crawford, the show's titular phantom had just stepped off stage when the production manager informed him of an immediate industry-wide shutdown. New York's theater district would go dark for the next 539 days.
Fifteen months later, Broadway reopened to a much different world. There were vaccines, but there was also the Delta variant, rampant inflation, and a rapidly growing television streaming market. On September 2, 2021, Tony-winner Hadestown re-premiered to cheers, tears, and standing ovations from both the audience and cast. Hadestown's triumphant return, and the subsequent return of other productions, was an inspiring end to one chapter and the beginning of an entirely new struggle.
Since reopening its doors, New York's theater scene has seen a gradual resurgence in popularity. After some initial instability during the 2021 and 2022 seasons, 2023 has seen a considerable boost in attendance figures.
Current musical and play per-show weekly ticket sales match that of Broadway's 2016 season — a time before Hamilton collectively bolstered the industry:
And sure, losing three seasons of growth is a tough pill to swallow, but it beats successive years of decline.
Furthermore, current attendance rates provide another promising sign for Broadway's post-pandemic revival, with musical theater fill rates returning to 2019 levels and play theater fill rates matching their 2017 numbers.
So with show grosses recuperating and theaters near-full, does that mean Broadway is well on its way to smashing its 2019 numbers? In short, no. While shows currently open on Broadway are performing relatively well, starting up and maintaining a full repertoire of theatrical productions remains a continuous challenge.
And this is where we get to the bad news — the risk inherent to Broadway's business model and its evolution in a world of weakening demand and rising costs.
Broadway's Recovery: The Bad.
Broadway has always been a brutal business. The lights, the performers, the sets, leasing a gigantic historical theater in an ultra-expensive real estate market — these things are not cheap. To be in the business of theater is to really really love theater (in a wonderfully naive and irrational way).
As Broadway welcomes audiences back to theaters, launching and sustaining new theatrical productions remains the biggest hurdle. With so many shows postponed or canceled during the pandemic, there is a backlog of new material eager to get on stage. And sure, the idea of a backlog sounds promising, but there is a reason many productions remain in development.
The cost of producing a Broadway show has skyrocketed in recent years, leaving new productions with a slim margin of error. A few weeks of tepid demand can quickly end a Broadway show. Additionally, the pandemic and its legacy have discouraged capital investment in the theater industry, as financiers are reluctant to put their money into a recovering business with an unclear trajectory.
So what's the total impact of these headwinds? Well, for one, New York's theater industry has experienced a significant contraction in post-pandemic revenues, even in 2023:
A Strange Loop, Broadway's 2022 Tony winner for Best Musical closed following a short ten-month run, a rarity for a recently-crowned Tony winner and an omen for the theater industry. A year and a half into its comeback, New York's theater scene is struggling to reach pre-pandemic performance volumes:
At the heart of this crisis lies an unfortunate catch-22. Is the current theater market reflective of total customer demand, or do more shows need to launch to stimulate demand and grow the industry? Unfortunately, the latter path poses a massive upfront risk for producers.
On the one hand, these newfound trends are nascent and, therefore, inconclusive. 2021 and 2022 were unprecedented years for Broadway, as the theater community navigated Omicron and Delta variants while fighting inflationary economic pressures and rebuilding casts and crews. The last few years have been unforgiving to those in the theater industry.
On the other hand, Broadway has always been an unforgiving business. According to the Broadway League, only about 20% of shows turn a profit. That's bonkers. In fact, between 30 and 40% of all musicals (new and existing) shutdown annually, a range that is shockingly consistent over time:
So how will producers ever make money? How does one succeed amidst ballooning costs, significant demand disruption (Covid), considerable shifts in consumer entertainment preferences (television streaming), and a historically high risk of failure? To date, Broadway producers have responded with a formula bemoaned by theater purists — the pre-branded musical.
Pre-Branded Musicals: A Crutch for Broadway.
The unprecedented success of The Lion King (1997) and Mamma Mia (1999) forever changed Broadway. The Lion King was theater's first mega-hit movie adaptation, while Mamma Mia proved a trail-blazing jukebox musical (a work comprised of hit songs from well-known pop artists). Of course, there is nothing inherently wrong with either show (I'm a big Abba fan, so I can't complain). However, both productions forged a template for a new type of work, adapting high-visibility intellectual property for the stage.
Producers took this formula and began cranking out jukebox musicals and movie adaptations: Mrs. Doubtfire, Jersey Boys (a Four Seasons jukebox musical), Frozen, Jagged Little Pill (an Alanis Morissette musical), Spongebob Squarepants the Musical, American Idiot (a Green Day jukebox musical), the list goes on and on. Over the past two decades, these pre-branded musicals have absorbed a large share of total box office:
And while productions from "traditional" sources still make up 40 to 60% of overall revenues, these figures include legacy productions (shows that have been on Broadway for decades, like Chicago or Les Miserables). When we look at new musicals, we see an overwhelming decline in traditionally-sourced shows:
Jukebox musicals and movie adaptations resonate with audiences, partly due to their nostalgic appeal and the familiarity of their music and story. Furthermore, these productions require less marketing investment, as they can capitalize on the recognition of well-known intellectual property.
One trend further fueling this phenomenon is Broadway's historical reliance on tourism. According to the Broadway League, in the 2019-2020 season, 67% of all Broadway tickets were sold to tourists. So imagine you are a producer, and you can choose one of the following productions (with tourist ticket-buyers in mind):
Next to Normal: a little-known psychological rock opera about a troubled suburban family.
Mrs. Doubtfire: a beloved comedy classic that grossed $443M in worldwide movie box office.
And sure, you may be a theater purist, insistent upon original works of utmost artistic merit, so you choose Next to Normal. But that's not the economical choice — at least today. On average, movie adaptations and jukebox musicals see higher weekly sales than traditionally-sourced works:
Much like Hollywood, macrolevel forces have coerced the theater industry into a reliance on existing intellectual property. Maybe Broadway will find a fresh approach to building and marketing original shows, but do we expect a paradigm shift on the heels of a pandemic shutdown that throttled customer demand?
Final Thoughts: The Never-Golden Age of Broadway.
Various cultures and mythologies often promote the idea of a "golden age" — a past era of prosperity and happiness. This concept embodies the human longing for a simpler, more idyllic time, a desire for the world to remain unchanging. We see golden age thinking in politics ("Make America Great Again"), in prominent media (Grease, Stranger Things, Mad Men), and in various other facets of culture.
I began this analysis assuming that the pandemic disrupted Broadway's burgeoning golden age — a time when Hamilton shot into the zeitgeist, buoying the entire industry. But the more I dug in, the more I realized that theater has always been frustrating and fickle. How has Broadway continuously survived these existential struggles? What binds theater professionals to this frustrating industry?
My sister is a longtime Broadway devotee, an avid theatergoer who loves to spout Broadway trivia (even if no one asks). So I texted her a few questions while researching this piece, hoping to get some hot takes on all things theater. When I asked if I could feature some of her analysis, she instantaneously responded with the following:
"You will do no such thing, Broadway is my safe place and I will not have you destroy it."
Her reply, a combination of humor and earnestness, exemplifies the undying devotion of New York's theater community. Broadway is a haven — an artform worthy of perpetual adversity. For whatever reason, the incentive to produce and consume live theater outweighs the myriad difficulties endemic to the theater business.
For every 100 failed productions, there is one Hamilton or Wicked or Book of Mormon. These hits captivate theater professionals and audiences, making the struggle "worth it."
Perhaps the numbers don't look great (at least right now). Perhaps Phantom's closing is a dire harbinger of theater's future. And perhaps shifting consumer preferences will continue transforming theatrical storytelling. These omens could signify more hardship for an embattled industry. Still, I doubt you'll dissuade theater lovers with data-driven proclamations of Broadway's continued doom — and that's probably a good thing.
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