Jeremy Gerard has covered the shifting fortunes of Jujamcyn Theatres since it became a formidable competitor to the larger Shubert and Nederlander organizations in the late 1980s. In 2013 producer Jordan Roth became Jujamcyn’s majority owner and the Street’s youngest power broker. Here they talk about the state of the industry, the only stipulation being no holds barred.
GERARD: My wife and I were having an early dinner on Sunday in a hamlet not far from Woodstock, NY and the only thing the customers and servers alike were interested in was the women’s soccer finals. Not only did our team defeat Japan for the title, but the game turned out to have drawn a record-breaking TV audience. I wasn’t surprised when the Broadway box office figures came in on Monday showing a sharp falloff from the week before. For some reason, other holidays mean big business on the Street where we live, but not the Fourth. I don’t buy the “traditional” argument that July Fourth is “always” bad for Broadway; I want to know why? Maybe the Japanese tourists were having their own pre-game parties, maybe all Manhattan was at Soldier Field for the last of the Grateful Dead concerts.
Looking closely at the numbers, though, many of the shows that were off by $50,000 and $100,000 and more still had near-full houses. That tells me Broadway’s high-rollers were away but there were still plenty of hoi polloi looking for tickets. So it’s really all about the premium ticket market, a “dynamic pricing” system that seems to me about as popular on Broadway as it is in the airline industry — two industries, by the way, enjoying record-making profits while still seeming to be facing long-term challenges to their survival.
ROTH: I hate to deny you an opportunity to knock premium tickets, but they weren’t the primary cause here. Across our shows at Jujamcyn, over two-thirds of the drop between the July 4th week and the week before was from the regular price category. In other words, mostly from more and deeper discounts. Not surprising, given that this week’s reputation you mentioned leads producers to offer more discounts and to promote them wider.
And that’s the part of dynamic pricing that never gets covered. Dynamic means lowering as well as raising. Adjusting prices on different seats at different performances up and down to match demand. As an industry, we had been developing the lower end of the range for decades through a robust system of discounting programs. Premiums are now developing the upper end, and we now don’t rely just on discounting to lower prices. So from lowest to highest, we are offering a widening range of available price points and continuing to try to help audiences find the one that makes sense for them.
“That’s the part of dynamic pricing that never gets covered. Dynamic means lowering as well as raising.”
The press is really great at spreading the word about the highest premium prices, but not so interested in talking about all the other price points. Why is that?
GERARD: Your last question isn’t difficult to answer: It’s all well and good to remind potential theatergoers of the various ways they can save some money — buy a year in advance and hope for a good cast; wait on line at TDF and pray the show you want is available. In the real world, however, you know and I know that entire orchestras and balconies — sorry, mezzanines — can become “premium” seating commanding upwards of $500 per ticket, even for mediocre seats at a hit show. Upping the price for an aisle seat — another place where Broadway has taken a page from the airlines’ playbook — represents yet another opportunity for raising prices and segmenting the audience. That’s one of the reasons I stress the average ticket price paid in my weekly report on Broadway grosses.
Is it bad that Broadway is a sellers’ market? Not if you’re a producer with a hit show or the landlord housing that show. I’m all for the Broadway bazaar being a varied marketplace selling art for every brow, and I’m certainly in favor of people making money rather than losing their shirts. But between dynamic pricing for seats, scarcity economics ruling star-driven limited runs (as witnessed this past season by Bradley Cooper, Helen Mirren and Larry David’s appearances: check out the average per-ticket prices on their shows), the playing field is not exactly even for the average theatergoer.
For all the talk of competition from stay-at-home entertainment, the hunger for live theater is palpable. Sometimes Broadway reflects that, whether it’s by offering superb revivals like The King And I as well as risky, who-knew? shows like Book Of Mormon or Fun Home — which the audience rewards with its hard-earned dough. But I’m not reassured that Broadway is thinking far beyond next week’s wrap. When I need a hit of optimism, I’ll head for the Signature, a few blocks west of your home base, where people can gamble on a new show because the risk is limited to $25 — and the seats in Jim Houghton’s fantastic complex are filled most every night.
ROTH: Well I guess my question isn’t so easy to answer after all, because I’m still left wondering. Why do you jump from standing on line at TDF to the entire house at $500? What about the literally millions of tickets sold every year — the majority of tickets — at regular prices, and not a year or even a month in advance? Why are you (the press collectively) invested in creating the narrative that the highest price is the only price?
My concern is if all we talk about are the $500 premiums, people who want to see a show will think there’s no other way to come and they just won’t. That’s not a good outcome for them or us or you. I love the Signature, and I love that they sell so many seats at $25, and I love that they got a tremendously generous donation from Pershing Square to subsidize all those tickets and make that price possible, and I love that every night on Broadway even more seats are sold for $27-$37, and while I know you don’t like to talk about that, I love that we just did.