Broadway Standard and Its Effects on Ticket Prices
Why is it that tickets to go see a play or a musical are so expensive? Back in 1956 a ticket to go see the hot ticket item of the time, My Fair Lady was only $2.30 for a balcony seat and $4.90 for an orchestra seat. With the Consumer Price Index (CPI) rates of inflation at 244.955 or 144% the price of that same ticket would be about $36 today. However, in 2017 a ticket for a Broadway show is going for over $120 on average. So, why have the prices increased so dramatically? And why can ticket prices still be high outside big cities like New York?
Professional theatres are expensive businesses. They have to pay the actors, directors, crew, producers, box office managers, marketing and advertising staff, building fees, upkeep, set and prop supplies, and so much more. However, this alone does not explain where the Broadway ticket price standard comes from. In 2015, a comparison was done by the New York Film Academy looking at mounting and running prices compared between New York’s Broadway and London’s West End. The average show then could mount for roughly £500,000 and would cost £100,000 a week to run on the West End; that same show would cost $2.8 million to mount and nearly $300,000 a week to run on Broadway.
The idea of price gouging tickets started in 2001 when the show The Producers showed real-life producers that ticket prices could be whatever people are willing to pay for them. This created the idea of dynamic pricing. Dynamic pricing is an idea started by the airline companies that if there is a high demand for the seat and a limited number, that it makes each seat more valuable. Dynamic pricing was then transferred over to theatrical productions, and in 2014 the prices for shows hit over $100 for the first time and have stayed there since. Therefore, through using dynamic pricing, a hit show like Hamilton could go for $1,000+ a ticket several weeks or months prior to the show date, and why New York Times journalist James Stewart could get tickets for the less popular (but still good) show like Groundhog Day could go for $50 an hour prior to the show.
This dynamic ticket pricing has created a standard for theatre throughout big cities in the United States, but it also helps smaller theatres whom use set ticket pricing stand out. Theatre is still a pricey business with lots of people and fees to pay, but theatres like the Old Creamery Theatre continue to have professional theatre in local areas at a fraction of the cost of big cities.