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Freakonomics For You Broadway Freaks

April 29, 2025

by:

Joe Patti

For the last three weeks the Freakonomics radio podcast has run a three part series on the economics of live theater, Broadway shows in particular.

They are using the example of the effort to develop the show, 3 Summers of Lincoln, for Broadway as a backdrop for the discussion of all the forces that come into play when trying to make a show succeed.

My favorite, probably unsurprisingly, is the second episode that primarily focuses on the business side of things, including the role the owners of the Broadway house play.

For those who aren’t aware, 33 of the 41 Broadway theaters are owned by one of three companies – the Shubert Organization, the Nederlander Organization, and A.T.G. Entertainment. So they have a lot of influence over what shows appear where and how large a share of the revenue they will take. As one Broadway producer says, “ It’s a fantastic business. It’s heads I win, tails you lose.” No matter whether the show does well or not, the house always wins because they get paid first.

Of course, they also talk about the labor costs of putting on a show when 13 different unions are involved. One of the producers admits that some of the more arcane rules in the union contracts are likely the result of someone trying to cut corners at some point and creating an unsafe or exploitative environment.

But all these things are predictable. Even after 100+ years of Broadway, the producers interviewed for the episode all pretty much admit that no one really has any idea why shows do well or not. Show that were smash hits in the past get big budget revivals and fail. Meanwhile, smaller budget off-Broadway shows become unexpected runaway hits.

Even as producer Hal Luftig talks about why people may decide not to see Broadway production of Legally Blonde, there is a clear sense that while his hypothesis has merit, he simply doesn’t really know.

Shows don’t work on Broadway for a whole host of reasons. it doesn’t have to be that the show is awful. You come to Broadway, let’s just say you have 30 other choices. What people choose can be a byproduct of where they are at that moment. We learned this on

Legally Blonde. If you are coming into the city and you have two kids, a boy and a girl, invariably, the boy said, “Oh, I don’t want to see that. That’s a girl story.” So they choose another show that everyone’s happy with.

There are people who feel like I don’t need to see that on Broadway, I saw the movie — not really comprehending that a good adaptation has its own vocabulary. It’s not just the movie on stage. If a movie is associated with a star, as was Legally Blonde with Reese Witherspoon — “Well, is Reese in it? No? I’ll go see something else.”

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A core reason I liked this episode is that it did look at all levels of the life cycle of Broadway shows. Not only the original productions and revivals, but the economics of taking the show on the road for a tour and then licensing it to high schools to produce. Sometimes a show that failed economically on Broadway ends up doing pretty well on tour and/or generating a good revenue stream in high school productions.

One of the cases they mention is the Broadway adaptation of the movie Newsies! which was only intended to have a token run on Broadway for a few weeks to placate fans. It did well on Broadway because the production costs were kept low. It did well on tour because the Broadway set was designed to be taken on tour. And it has had a great career as a high school show because the cast requirements are flexible and scalable to the needs of schools.

Arts Facilities, Audience Relations, Business Models, Finance, Management Philosophy, State of the Arts, Working In The Arts

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What Do You Recommend We Do?

April 28, 2025

by:

Joe Patti

As ever, I am paying attention to data on various trends, one of which is the level of perceived trust of cultural organizations. Colleen Dilenschneider and the folks at IMPACTS Experience have reported that trust in cultural organizations has increased, particularly since the end of the pandemic.

Last week they released some findings about perceptions during the first quarter of 2025. In general they found that trust of museums has held steady and trust in performing arts organizations has seen an uptick. But they warn that it would be a mistake to assume this trend will continue. (emphasis original)

On average, Americans trust cultural entities more than the daily newspaper, other non-governmental organizations (NGOs), state agencies, and federal agencies – and this has not changed since the administration changed and attendant new policies were issued!

[…]

It is also not reasonable to infer that trust perceptions will continue to increase or remain unchanged. We are looking at national perceptual changes on a short timeline (i.e., one quarter of a year). The American public may still be watching cultural organizations’ reactions closely, or they are trusting that these entities will remain true to their previously stated missions and values.

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One of the aspects most valued in cultural organization is being mission-driven. Dilenschneider and company had reported on this about a year ago and I summarized a bit in a blog post then. At the time they warned not to assume younger audiences valued the mission focused elements of an organization more than other generations because they were deeply invested in the mission of organizations. Rather, IMPACTS suggested it may just be that they haven’t been marketed to for as long as previous generations.

In any case, they recommend organization continue to focus on and communicate their mission as they tackle challenges they may face as they move into the future.

What particularly caught my eye in this latest bit of data analysis is that the survey data reflected a belief that organizations should recommend behavior. This is certainly something to think about.

Generally speaking, Americans do not love being told what to do. However, a majority of Americans “agree” or “strongly agree” that exhibit-based and performing arts organizations should suggest or recommend certain behaviors or ways for the public to support its causes and mission…

Even now, Americans generally expect cultural organizations to recommend behaviors to help elevate their communities as it relates to their missions. Depending on your organization, this may mean suggesting ways to further art education, keep the ocean clean, protect endangered species, cultivate native plants, advocate for theater, bring music to emerging audiences, make science-based decisions, or any number of things. And these action items may range from signing up for a program, to becoming a member, to donating, to attending an event, to telling folks about an organization’s important work.

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Advocacy, Art(ist) Education, Audience Relations, Building Public Will For Arts And Culture

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How Long Have Communities Been Yearning For An Outcomes Focused Experience?

April 23, 2025

by:

Joe Patti

Ruth Hartt made a post yesterday that is getting a fair number of responses from folks in the arts community, including somewhat gratifyingly, board members who need to be invested in the goals for which she advocates.

She discusses the need for cultural organizations to align their programming, practices, and operations toward meeting outcomes desired by audiences/participants/community members. She provides some practical examples of organizations around the world who have achieved this by doing everything from publishing a children’s book, sending postcards to children, offering wellness classes, and centering activities around a decommissioned fire truck.

These support her proposal on how to shift organizational business models:

Shift the value proposition from showcasing artistic product to delivering audience outcomes (e.g., wellness, belonging, inspiration, emotional restoration).

[…]

Expand resource allocation to include different talent, tools, and partnerships—especially those outside the arts sector (e.g., wellness practitioners, educators, social service orgs).

[…]

Reframe success metrics to measure what matters to your audiences, not just what matters to insiders or funders (e.g., social connection, personal growth, first-time participation).

Rebuild your value network by cultivating funders, partners, and press outlets that validate outcomes instead of just prestige, tradition, or aesthetics.

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Something she wrote at the beginning of her piece coalesced a lot of disparate concepts for me:

Historically, the arts have been one of the few avenues for accessing beauty, intellect, and high-status cultural capital. The product itself was scarce, revered, and gatekept.

But since the early 2000s, the digital revolution has shifted power to the consumer—creating a world where people expect personalized, on-demand experiences that deliver clear value and meaningful outcomes. Shaped by pre-digital norms, the arts sector has struggled to respond.

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It occurred to me that it may not be entirely true that the shift started in the early 2000s. I have always attributed my feeling that I have had permission to access cultural experiences to the fact my parents would take us to performances, museums, and historical sites when I was younger.

But my lifetime has seen increased access to experiences. I have gone from three channel over the air television to cable to VCR to video rental stores to dial-up internet to high speed internet to video on demand (including YouTube) to streaming content.

The practice of gatekeeping experiences has always seemed silly to me. Now I wonder if it was shaped in part by the increasingly accessible world (even though neighbors had color tv, cable, and HBO years before I did.)

I suspect that even if others did not have the same perspective and experiences with cultural opportunities that I did, their expectations of accessibility were being shaped in a similar way.

In other words, I think it is perhaps a mistake to believe this shift of expectations began with generations whose first experiences with technology began in the 2000s. There has probably been a subconscious awareness of unmet need and expectations far longer than that.

Therefore it would be a mistake to think what Ruth proposes is targeted to engage and increase the participation of younger generations.

Audience Relations, Building Public Will For Arts And Culture, Business Models, Marketing/PR, State of the Arts

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Progress In Community Lives Can’t Be Standardized

April 22, 2025

by:

Joe Patti

Kyle Bowen piqued my attention today in the Museums as Progress newsletter where he discussed Goodhart’s Law.

“When a measure becomes a target, it ceases to be a good measure.

Long time readers know that subscribe to the idea that just because you can measure something, it doesn’t mean the result is meaningful. Bowen illustrates this by pointing out that having goals to increase participation among people who meet certain demographic characteristics doesn’t advance your understanding of why they are there, how you can make them feel welcome, and make it easy to decide to return.

For a lot of organizations the answers to those questions are central to their mission and vision.

Goodhart’s Law reminds us that mirroring demographic ratios in museum content is not an end in itself because ratios have little relationship to a museum’s ability to fulfill a role in a city or region.

What counts isn’t who people are on paper, but what progress they’re trying to make in their lives. Demographics might tell you something about who is in your space, but they reveal nothing about why they came or what they hoped to achieve.

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Bowen admits that it is possible for progress in their lives can fall victim to becoming a meaningless target, it is is more difficult to do. What everyone needs to achieve their goal is differs from person to person even if they have the same goal. Thus it is tough to focus on providing a standard solution to everyone. And because what everyone feels they need is specific to them, organizations have to engage in more direct and active listening to provide the outcomes community members seek. (emphasis original)

Supporting a community goal like “helping parents cultivate their child’s curiosity” requires understanding the diverse approaches people take in pursuing that goal and the alternatives people in a particular place might turn to as they seek to achieve their goal. You can’t reduce it to a single number. Second, progress metrics require ongoing listening rather than predetermined solutions. When you focus on supporting goals, you have to constantly validate whether your approaches are working, creating a natural correction mechanism.

Source

Audience Relations, Building Public Will For Arts And Culture

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