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Are Broadway Grosses Down due to Discounts?

More and more theatres are using the tools of Web 2.0 and social media to promote and market their shows.

Often this means offering deep discounts on ticket prices.

Dynamic pricing is the norm on Broadway where nearly two-thirds of the tickets are sold to tourists. Do these discounts harm or hurt the long term relationship theatres have with their audiences?

In an attempt to quantify the impact of ticket discounts, New York based theatre impresario Ken Davenport surveyed Broadway ticket statistics. He examined box office grosses and ticket sales before and after the introduction of online discounts.

He discovered that the box office grosses, and tickets sold, were much higher before the introduction of the discounts.

Although it’s tough to prove a correlation, it appears that discount ticket prices might have had a negative impact on ticket sales and grosses.

There are a number of factors at play in his research, including disposable income and the rising cost of tickets. It’s worth noting that he observed ticket prices were outpacing the rate of inflation.

His survey overlapped with the boom and bust of the late 90s.

You can see more about his excellent research, and conclusions, here. The good news is that according to the Broadway League, in 2012 both ticket box office grosses, and attendance, were up on The Great White Way.

Two of Ontario’s summer theatre festivals draw large numbers of tourists; however, in 2012 their news wasn’t as good.

The Globe and Mail’s J. Kelly Nestruck reports that the Stratford Festival’s executive director designate Anita Gaffney said that 2012 ticket sales were “a little softer than anticipated” suggesting the dip in sales was “a universal trend and largely linked to the challenges of the economy.”

Nestruck’s report received 40 comments speculating on the reasons for the decline. Regardless of what one thinks about online comments, I see it as a good sign that so many people are passionate about the Festival.

At the Shaw Festival attendance was down by 11% in 2012.

Shaw Festival Niagara-on-the-Lake, Ontario

Like Broadway, both festivals rely on tourists to purchase tickets. There’s no doubt that the currency exchange rate will continue to have an impact on tourism.

It’s too early to tell the long term impact of the revenue management strategy that uses dynamic pricing at the Stratford Festival. In the short-term it’s provided them an extra tool in their expanding efforts to engage with new audiences.

Also in this series
Three Proven Tactics to Improve Subscriptions
The Theatre Experience Begins and Ends Online
Toronto Theatre Klout Rankings
Engagement converts followers

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Are Broadway Grosses Down due to Discounts?

Keith Tomasek

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