07/17/2015

AKA INSIGHT

Much like movies, Broadway follows what James Surowiecki of The New Yorker noted as seasonal clustering. Both industries choose to launch new shows during extremely specific periods of the year – for movies, it is from May – mid-August and November – December, and for Broadway, it is from October – November and March – April. The issue with this clustering is that while it was based on attendance trends and based on giving shows the most amount of time to prepare for the awards season, it creates heightened competition that makes success much harder.

 

During the 2014-2015 Broadway season, there was a near record 10 musicals that opened in the spring, of which 9 opened in April. In part as a result, musicals averaged only $662,000 a week, which is the lowest average weekly gross for musicals since 2005-2006 (note this is based on inflation adjusted grosses). While there were still some musicals grossing over $1M a week, the rest of the field was hurt overall. 5 musicals that opened during this period have already announced closing or have closed.

 

Broadway could benefit from learning for movies, which have recently had blockbuster movies open just a few weeks earlier than the traditional clustering. This gives them an advantage in numerous ways for a few weeks, as they can not only capitalize on there being less competition, but they also gain a few extra weeks to educate consumers and gain word-of-mouth traction leading into a peak time period. For movies, this strategy has led to some extremely successful grosses, including “The Mummy” (was one of the first large blockbuster movies to open in the first week of May – grossed $155M domestically, $43M of which came from opening weekend) and the fourth installment of “Fast and the Furious” (opened in early April – grossed $155M domestically, $71M of which came from opening weekend).

 

On Broadway, we’ve seen a few examples of success by beginning performances outside of the traditional clustering. The most notable example is Hairspray, which began performances on July 18, typically a time that benefits the already running musicals coming off the Tony Awards. In Hairspray’s first full week, they grossed $621,405 at 85% capacity and once they got beyond opening, their grosses grew to averaging $800K-$900K a week in 2002. From that point on, they were in the top 10 grosses every week, despite beginning performances outside the usual cluster. Another example is Ragtime, which began performances on December 26, 1997 and opened on January 18, 1998. It did not suffer from starting performances in the dead of winter and grossed over $800K a week from W.E. Jan. 25 – August 30, beating Lion King in the weekly grosses for several weeks. This summer, Hamilton is hoping to capitalize on starting outside the traditional cluster, like Hairspray and Ragtime did, and is already in a strong position to do so, with a reported $27M+ advance.

 

As we enjoy the summer and look forward to the next season on Broadway, seasonal clustering will continue to play a role in the next round of winners and losers. The key to success besides having a terrific product and prudent financials, is to be strategic in this timing. All in all, there are a lot of products out on Broadway, so make sure yours is available right when people want it.