Theater Economics
Since my recent post arguing that artists should not receive public funds for the purpose of making art, I’ve been thinking a lot about how theater artists earn money.
You know, in terms of business models, just about anything beats theater:
The product can not be mass-produced.
At best, you can replicate it a few hundred seats at a time. Maaaybe a few thousand. But as soon as you digitize it, transmit it, or otherwise pull the audience away from the performer, it’s not theater anymore.
The product must be made fresh for each purchase.
Sure, you’re not making it from scratch unless you’re doing improv. But the product is a live event, and live events don’t fit in bottles, stay fresh under heat lamps, or last beyond the first serving. And making the product fresh each time isn’t even close to a mindless task, so each time you make it you need lots of highly trained people on hand.
The cost of making the product is extremely high.
Typical production costs cover a large, purpose-built room, lots of expensive equipment, scores of educated staff (half of whom are typically shipped in from out of state, because apparently New York is the only state that has staff qualified to create this product), and truly atrocious waste (how much raw material goes into a landfill after every regional theater production?).
The company can not sell the product at a high price…
The customer gets nothing tangible for their money1. All they get is an experience. Can an experience command a high price? Sure, if it’s extreme.
- YES: space tourism, rock star concerts, high profile sporting events, elite prostitution.
- NO: movies, local cover bands, museum visits, theater performances.
…and yet the customer can not purchase the product for a low price.
Even if tickets are 2 bucks a pop, the show is not cheap. I’ll pay 2 bucks for a piece of candy and it doesn’t matter if it sucks ’cause I’m done with it in 2 minutes and I move on with my life. If the new “Post-Post-Modern Deconstructionist Christmas Carol…on Ice” sucks, that’s 2 hours of my life I can’t get back.
The quality of the product is highly unpredictable.
Perhaps no other product has a wider range of quality, from “sublime” to “unbelievable waste of time”. Moreover, there’s almost no way to know what you’re going to get—the brand of the venue is no guarantee, nor are practically any other traditional consumer signals except word of mouth. As McDonald’s will tell you, that’s no way to get lots of people in the door. Hell, even two different nights of the same show often produce wildly different experiences, depending on who shows up to watch and what mood they’re in.
The product has low demand—and probably always will.
Theater does not command much of the cultural mindscape. That’s fair; nothing gets to claim a cultural stake without earning it. Of course, America has proven that the cultural battlefield is basically the same as the economic battlefield, so waning economic leverage leads to waning cultural leverage and vice versa. It’s a nice little feedback loop that means, barring changes in human nature or laws banning the more economically viable art forms, theater will forever be a niche.
In light of all this it’s pretty obvious why theater is a non-profit endeavor, and why the Angry White Guy often argues that Theater is Not a Widget.
I’m not saying theater should be a widget, but man, this is a seriously challenging monetary model. With a model like this its almost a miracle we have any theaters left in a recession.
What should be our relationship to money in the theater? I think most of us would like to make a modest living and have health insurance. We certainly don’t get in to theater because we care about making a lot of money. But can we reasonably expect to meet even those modest goals under a business model like this? I mean, if I asked you to come up with a worse business model than that, it’d be pretty hard: high monetary costs, high temporal costs, high waste, low income, few efficiencies, an inability to scale, little consistency, little demand.
Some of what makes theater a bad business is, alas, also fundamental to what makes it theater. But surely it’s not a completely lost cause. Can we imagine a theater run in any other way? What if we start off with the assumption that a theater can’t make money from its art? 2 How would we create a theater that runs under this assumption? Could such a theater exist? Can it be made economically robust and artistically excellent?
If I may borrow Nick Keenan’s rallying call (and his GIF):
1 Exception: dinner theater. But that chimera has historically been a dead end for both the art and the food.
2 I’m not saying I think theaters should stop selling tickets. I’m advocating for a thought experiment.
March 23rd, 2009 at 9:01 pm
I noticed a video game company recently giving cds of its games away along with tshirts it sold at Target. Rather than try to sell the games, they sold cool looking shirts with games as accessories. So get some really good tshirt/merchandise designers.
Can you possibly sell DVDs after the show? Maybe your program could help a minimal camera crew shoot and quickly burn DVDs for sale as people leave… or for mail delivery.
Also the Shakespeare festival was always packed when I lived in Lexington, Ky. Hire him if you can I guess.
You’re a fabulous writer Chris – keep up the great work.
G
ps: as a final thought – consider making a list of all the known/conceivable pricing models for theater. Surely people have tried subscription models, crowd-funded models, etc, right?
April 1st, 2009 at 5:18 am
I think you bring up an excellent question about the nature of theatre in the contemporary setting. Since theatre has been largely supplanted in its cultural function by film, the question of how to make theatre a viable art without government support is enormous. You are completely correct in your summary of the economic situation theatre finds itself it: high cost, high risk, little demand. I will disagree though that a theatrical experience cannot be on par with a rock concert. The validation and confirmation of your personal validity is an incredibly profound experience that can be had as a viewer of theatre in fact.
If by a theater that makes no money, you mean non-profit theatre, yes that is completely possible as an economic and artistic force. Then though, it becomes about larger economic forces either way, when you have to consider can you pay your staff? People cannot commit themselves completely to the creation of interesting, fresh, and still relevant content for an entire season if they’re working a different job that requires a completely different skill set. If pay for artists is completely removed, then artists have to give up their trade in favor of something that will put food on the table. Then, it becomes about finding artists who are effective as mediums between the material and the audience, which you are less likely to find because the time to invest is not available.
Shakespeare sells, but if that’s all we know how to do, then what happens when Shakespeare stops selling? Or what if we want to do something that isn’t Shakespeare? We can create commercial art that people will consume, but that just presents the same things over and over again, repackaged in different productions. It’s not interesting to create and in short, only feeds the current system, it doesn’t change it.
RE Garrett: There are subscription models and such for theatre. Most regional theaters, even the enormous ones like the Guthrie in the Twin Cities, rely heavily on season subscriptions to keep themselves alive. Try whatever combination you’re looking for, but ultimately theatre companies survive based on ticket sales (both subscription and at-the-door), private donations, and grants. The ONLY functional exception are the major Broadway houses, which survive purely on ticket sales and merchandising.
In both cases, providing DVDs would be really interesting, but it undercuts demand. If someone can get a copy of a production and share it with their friends, then their friends are less likely to come because they don’t need to pay to see it. In the cases of Broadway houses, where long runs are the standard, it also means that the original customer is much less likely to come a second, third, or eleventh time.
October 14th, 2009 at 11:34 am
[...] since jotting down a few observations on theater’s crappy business model, I’ve found myself mildly obsessed with finding a solution to the problem of funding [...]