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Economics Of Broadway Show Breaking Broadway Formula

July 29, 2024

by:

Joe Patti

Freakanomics did a two part show about how the Broadway play Stereophonic came together. The first part is broadly about the 11 year creative process playwright David Adjmi went through to make the show. The second part focuses a bit more on the economics behind a Broadway show.

If you have been involved with the performing arts for any length of time, you can probably predict the process Adjmi underwent – cobbled together funds from two commissions and a grant, plus had two architects let him live in their house rent free for years while he wrote. He had to put some pressure on Playwrights Horizons to consider the show and the cost of over $1 million was a lot for an off-Broadway production.

But it became a hit based on essentially breaking the formula of Broadway shows – a straight play about music, but not a musical, no stars in the cast, and runs long at 3.25 hours. Apparently it has a strong appeal to men based on the observation the men’s restroom line is longer than the women’s.

There is a lot more to the story than that. The first episode is 70 minutes alone and the second about 55 minutes.

Being the arts management nerd I am, I was even more interested in the second episode which talked about the economics and decisions that were made. Everything from the cost of putting on a show in NY vs. London, who can and how to invest in shows in both cities, what the actors got paid off-Broadway vs. after the move to Broadway, decisions about pricing tickets, and the marketing mix they used.

In terms of the pricing tickets, the producers say they can now get up to $349 for a ticket though they re-evaluate their pricing three times a week, but they started out much lower during previews:

We had preview pricing that was $40, $80, $120 to start, for the month of April. But you have to catch up to it, because now we can get $229 for them. You kind of play a game of chicken with yourself and with your audience. For something like Stereophonic, because it’s an unknown title — obviously it’s getting more well-known — but two, it does not have a major mega-star in it. It has a group of incredible rising stars, but they’re not household names. The way that we get there is by getting people in the door, and really building to that moment.

Thanks to improved audience analytics tools, the producers have changed their marketing mix from what it once was as well:

Oh, it’s almost entirely all digital now. It’s all mobile. It’s all through Meta — it’s all through Instagram, Facebook. We do still take the traditional behavioral banner ads that follow you around the internet. We still do some prints, but not a ton. We have dabbled into television, but we’re taking specific ads. We’re not taking giant flights with multiple spots on Good Morning America or the Today Show, which was always your bread and butter.

[…]

The R.O.I. is much easier to figure out because you can actually track people. Our zip code reporting is way more sophisticated now than it was before, whereas you had to blanket the market with something and then you didn’t see a direct correlation. Now it’s less things, but you can still see how your wraps jump due to specific things of press, like a C.B.S. Sunday Morning piece, or if your stars are on Morning Joe. There are fewer things that give you that pop, but at least you know, “If I’m on Morning Joe, then we’re going to have a good day at the box office.”

If this sort of information interests you and you have the time, I recommend giving the pieces a listen. Host Stephen Dubner says they are working on a longer, more involved series on the economics of making theater so I am going to keep an eye out for that as well.

Audience Relations, Business Models, Pricing, Working In The Arts

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Smoke And Heat Becoming A Bigger Threat To Summer Theater Than Rain Storms

July 24, 2024

by:

Joe Patti

American Theatre posted a really comprehensive article about the challenges summer theaters are facing.

In the wake of social unrest resulting from things like Covid, George Floyd, and Black Lives Matter, many theaters have worked to provide better working conditions for staff. Some of the changes have included shorter work hours, better pay, and childcare.

However, as expenses have gone up and philanthropic support has declined, these changes are raising increasingly difficult questions for summer theaters. Not that theaters haven’t always had a multitude of challenges to address. Staying committed to fair pay and fair hours has meant doing fewer shows, scaling back on customer service, or in one case, back office staff stepping in to sell popcorn when concessions staff exceed their hours in a week. There are concerns about whether having shorter rehearsal hours will result in lower quality performances and disappoint audiences who may be paying more for tickets than in the past.

In response to this some theaters are re-packaging their offerings for audiences. For some destination theater festivals, this may result in better experiences for audiences who felt there was more going on than they were able to experience.

Covid has continued to create consequences for these theaters. Not only have many experienced professionals left the industry, but the pandemic interrupted the continuity of training for younger professionals.

Bahr agreed, adding that “the supply chain of welders or people doing lighting is gone,” and that in Utah, the issue is deepened by the festival’s reliance on local college students, who missed several years of in-person learning. As carpenters and other skilled workers explained to him, seniors used to teach the juniors and they’d teach the sophomores, and so on, but “it’s like they’ve got four years of freshmen now.”

Climate change has also increasingly posed a challenge for summer theaters. In addition to dodging snakes and bears passing through the natural environment in which the theaters operate, forest fires and heat are becoming a central concern.

Oregon Shakespeare Festival artistic director Tim Bond noted that forest fires caused numerous cancellations in 2023:

“We had 10 cancellations last season,” he said, which is a serious financial hit. “We now have a ‘smoke team’ that monitors the smoke and the direction of the wind. They’ll know when the smoke will arrive, so sometimes we cancel even when audiences are seeing blue skies because we’ve gotten good at knowing when it will roll in.”

Utah Shakespearean Festival leadership said that smoke caused the cancellation of nine shows in 2022 resulting in a loss of $500,000.

American Theater Players in Spring Green, WI has had to cancel for heat and poor air quality and is having to budget to accommodate for increased number of refunds:

Young said that 2021 marked the first time American Players Theatre had to cancel outdoor productions in their 1,075-seat Hill Theatre for extreme heat. (Last year they lost performances due to poor air quality.) She said that while many audiences prefer matinees because they don’t want to drive at night, they increasingly have trouble sitting through them in extreme heat—weather that is also unsafe for actors. To compensate, APT is shifting outdoor matinees to late August, when it’s cooler in Wisconsin.

“We plan into our budget that we’re going to refund a certain number of tickets for weather,” she said, “but that number is getting higher, and we have to look at what it will be like in 10 years. Are we going to need a large indoor space to accommodate that shift?”

Arts Facilities, Audience Relations, State of the Arts, Working In The Arts

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When Federal Funding Of Theater Equaled The Cost Of A Battleship

July 23, 2024

by:

Joe Patti

Artsjournal.com posted an article from The Yale Review reviewing a book about the benefits the Federal Theatre Project (FTP) of the Works Progress Administration (WPA) brought to Depression Era United States. In addition to discussing these benefits the book’s author, James Shapiro, relates efforts to dismantle FTP by conservatives as an early manifestation of the culture war we experience today.

After reading about all the activity the FTP engaged in across the country, the reviewer Charlie Tyson notes that the budget was “less than 1% of the total funds allocated for federal work relief, or about the cost to build a battleship. Tyson notes that the cost to build an air craft carrier today is around $13 billion and challenges readers to think about what arts organizations and artists could do with that sort of money today.

What was most interesting was reading about the wide scope of activities the Federal Theater Project and the related Federal Dance Theater Project engaged in. If there was ever a time in the history of the US when artistic activity was viewed as populist rather than elitist, it was during the period of 1935 and 1939 when these projects were actively creating works. The works created weren’t just lighthearted fare. There were challenging pieces on topics like poverty, housing, racism, labor relations, and inequality.

The Living Newspaper program of the FTP addressed these topics and focused some criticism upon lawmakers by quoting statements made in the Congressional Record. It is probably no surprise that legislators who were already opposed to FDR’s New Deal programs targeted works drawing a great amounts of attention to the uncomfortable issues of the day.

The funds distributed to artists through FTP provided for a significant amount of community engagement. To a certain extent there are probably lessons to be drawn today from the activities of artists 90 years ago. One of the things cited by Tyson was how closely tailored to a target community some of the shows were:

“Unlike Hollywood, which delivered the same products to everyone, the Project was nimble, sensitive to local variation. For example, shows were staged in Spanish in Miami and Tampa and in Yiddish in New York. The Project gave directors license to adjust performances to satisfy local tastes; audiences in different cities might see differing versions of the same play.

A string of early successes established the Federal Theatre’s reputation. Its first hit was a production of Macbeth in Harlem, staged by one of the program’s so-called Negro Units. (The Federal Theatre was, at the time, Harlem’s largest employer.) To direct the production, the organization tapped Orson Welles, at that time a virtually unknown twenty-year-old actor with no professional directorial experience. The Harlem Macbeth—commonly known as the Voodoo Macbeth—traded Scottish gloom for Caribbean exoticism. Set in nineteenth-century Haiti with a large all-Black cast and filled, in Shapiro’s words, with “drumming and spectacle,” the production was a sensation. It moved from Harlem to Broadway and then embarked on a national tour with stops in the Jim Crow South. The play reached roughly 120,000 people.

Many of the shows were performed for free. There are apparently pictures of thousands of people filling parks to watch performances. (Though I imagine many performances also occurred indoors). In total, it was estimated “…thirty million Americans—roughly a quarter of the population—attended Federal Theatre productions.”

Toward the end of the piece Tyson notes that there have been recent calls for more federal funding of non-profit theaters and cites a criticism that theaters have only themselves to blame for producing works with themes criticizing the social and political environment. But Tyson notes that theatrical performances have a long history of containing social messages from Victorian melodramas pointing out the plight of the poor to the social commentary of Federal Theater Project works through to today.

Audience Relations, Marketing/PR, State of the Arts, Terms and Ideas, Working In The Arts

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Accountability Leadership

July 22, 2024

by:

Joe Patti

Back in June there was an article on the Harvard Business Review site about 3 Ways to Compassionately Hold Your Team accountable. The authors of the piece approach the topic from the cognitive processes associated with accountability. What appealed to me about the piece was the contrasting of punitive approaches with those that views an assignment as an opportunity for growth and acknowledges that mistakes are a part of that process.

Since the creative process involves generating, refining, and building upon multiple iterations, this seems an appropriate approach to apply to management and leadership practices in arts and cultural organizations.

The authors categorize these perceptions of accountability as “threatening” vs. “worthy challenge.”

Leaders should strive for the second type of accountability, as there is now significant research suggesting that encouraging a growth mindset accelerates individual performance, learning and adaptability, and overall well-being. And because growth-oriented accountability rewards employees for taking risks and encourages a growth mindset, it has knock-on benefits for team culture. In particular, it compels people to find solutions to the mistakes others have made rather than blaming or shaming them.

The three accountability methods they identify are: Think Ahead, Own Your Commitments, and Anchor on Solutions.

Think Ahead involves envisioning and communicating what success looks like to staff, including any difficulties staff may encounter. The example given in the article is a client that often interrupts to ask questions, but similar situations occur in arts and cultural environments in terms of details known about attendees, groups, board members, etc. The challenge to Thinking Ahead is being able to empathize with the person(s) being assigned the task. Not only in terms of what questions they may have on details you take for granted, but anticipating that they may be intimidated by a situation that wouldn’t ruffle you.

Own Your Commitments is essentially holding yourself to the same standard as employees and modeling the behavior for them rather than taking a “do as I say, not as I do approach.” The authors point out that if employees are held accountable for meeting certain benchmarks but their leaders are allowed slack, the dichotomy can cause all sorts of issues.

An arts organization related example that immediately comes to mind are policies like ticket changes, rental refunds, etc. Often it does fall to a leader to bend policies to accommodate certain people and situations. In those situations it is important to confirm that staff made the right decision with their initial refusal rather than blaming them for not knowing they were dealing with an important person and should have made an exception. The other approach is to explain why the decision to bend policy was made and either empower employees to make that decision themselves within that context or give them permission to pass the decision up the chain without repercussions.

Finally, Anchor on Solutions is essentially the practice of acknowledging errors and problems are part of becoming more skilled and productive. It is about reflecting, discussing, and seeking solutions rather than focusing on assigning blame.

Anchoring on solutions means letting go of blame and working to make things better. It means debriefing deeply on both wins and failures, and constantly seeking creative ways of solving problems instead of reasons for failure. Like owning your commitments, anchoring on solutions is a learnable skill that is heavily influenced by the actions of others around us. Therefore, leaders need to be intentional about focusing on the way forward, not on finding out whose fault it is.

Leadership, Management Philosophy, Working In The Arts

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