Microeconomics of Broadway Theatre - Free Essay Example

Broadway is one of the biggest attractions in New York City, New York. It is one of the biggest sole income generators of the city, but it is also one of the biggest spenders as well. Broadway Theatre has been through several economic models to try to make its revenue as large as possible to continue being as profitable as it has for the last three centuries. With averaging 25,000 people attending shows a night, it is no surprise that Broadway has rarely seen economic loss that a new business model could not fix. Although Broadway has experienced such consistent economic success through its centuries of business, it is not all dollar signs. According to the Hudson Review, Just one in five shows make a profit and musicals, though usually far more lucrative than straight theatre, are lucky if they run for six months. Actors and landlords must be paid regardless of how many seats are filled. Even popular shows can shut down early if cash is tight after a few bad weeks. That makes investing a gamble. Broadway, although famous for its incredibly popular shows, has produced hundreds of shows, most that did not last very long due to predicting economic loss since plays can take several months to breakeven on their production costs. Broadway productions are incredibly expensive because of paid actors, extravagant sets, glamorous costume designs, and paying everyone to make those things happen. During the 2012-2013 season, nearly $12 billion were generated in production costs according to a new report from the Broadway League The Broadway League is a group that publishes weekly revenue and attendance totals for every show on Broadway going back to 1984. It also contains specific information about productions regarding the cast, the popularity, how many (if any) awards it has won and other information of this nature that is provided to the public. Specifically this information is provided to potential theatre goers.