Dramatic Reality of Financially Strapped Theaters

Alan Cumming, in `Cabaret

“Cabaret,” a revival that was a huge moneymaker for Roundabout from 1998 to 2004, is coming back to Broadway with the same lead actor (Alan Cumming), the same creative team, even the same peek-a-boo poster and marketing campaign. 

But there is one key difference: the ticket prices. In hopes of erasing a deficit, Roundabout, the city’s biggest nonprofit theater, has increased the top price to $162, its highest ever. During the show’s earlier run, tickets started at $75 — or $107 today, adjusted for inflation.

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At Roundabout, higher ticket prices have met with mixed reactions from audience members.

“I used to pay $8 to see shows here,” said Marlene Cohen, 76, a Roundabout subscriber for 20 years, before a recent performance of the theater’s “Machinal.” “But I feel I get a good value.” 

Her theater companion, Margie Weinfeld, though, said that she planned to skip the revival of the revival of “Cabaret.” 

“Prices are too high,” said Ms. Weinfeld, 65. “I’ll just rent the movie version again.”

Reference: It May Be a Nonprofit Theater, but the Tickets Look For-Profit.

As a management consultant, I know there is simply no easy solution to the kind of financial squeeze these New York City theaters face.  Raising ticket prices are fine, if their target audience will, by and large, bear them.  There are theater-goers who are price elastic enough, like Cohen, and those who are simply not, like Weinfield.  If theaters have access to analytic tools, then they can determine the optimal price for their audience, that is, tapping as much of their price elasticity as possible, while minimizing audience fallout, in order to serve their financial objectives.

But aside from options for funding or revenue, these theaters may need to rethink their plans and dial down their aspirations.  In other words, they ought to draw on their creativity to work within tighter constraints and thereby solve their dilemma.  American culture is often about setting the bar high and going for it, so scaling things down and deploying more modest aims can be very difficult.

They will be, only what they can be.