More crowded $1m Broadway club retains its cachet

December 26, 2016

by: Joanna S Kao in New York

Last week ‘Dear Evan Hansen’ became the seventh new Broadway show of 2016 to pull in more than $1m at the box office in a single week, at the end of a year in which New York’s theatre takings have so far been roughly flat at $1.34bn.

Rising ticket prices and better models for variable pricing have made it easier for productions to hit seven figure weekly grosses. But even as Broadway’s “million-dollar club” becomes less exclusive, producers say the number is not losing its significance as an indicator of a show’s success and potential.

Unsurprisingly, because of increasing ticket prices and inflation, the number of shows grossing a million each year are on the rise. Between 1984 and 2000, only six shows joined the club; this year alone, seven shows have done so.

“The million dollar is a magic number, particularly for a new show,” said Elliott Masie, a Broadway producer who is involved in the musical ‘Natasha, Pierre & The Great Comet of 1812,’ which last month passed the $1m mark in its second week.

Membership of the club is often a leading indicator of longevity on the Great White Way and a sign to investors that a show may have a better guarantee of a profitable life after Broadway. At least 52 per cent of shows that grossed over $1m in at least one week have followed up a Broadway run with a national tour. Only 8 per cent did the same for shows that never grossed over $1m.

While the number of shows in the club has been rising and the biggest hits, like ‘Hamilton’, ‘Wicked’ and ‘The Lion King’, are breaking $2m or even $3m, the seven-figure milestone has not lost significance among producers. Broadway producer Ken Davenport calls it more of an “emotional” marker. “$1m will always be $1m,” he says: “There’s something about that number. For a while, it’ll be a very nice target.”

In recent years, better models for variable ticket pricing — pricing on demand — have helped shows hit that target more often. “Costs [of producing a show] are so much more now, so variable pricing is a counteractive measure,” Mr Davenport said.

The Broadway League, the trade association for the theatre industry, releases weekly grosses for every show and conducts industry-wide surveys to help producers better model their potential audiences and demand.

“I would say that the basic information hasn’t changed [over time], but I think we do go deeper into the information with various tools that technology has given us over the last few years,” said Charlotte St. Martin, president of the Broadway League.

That deeper insight is helping the industry understand its current audience and pull in new ticket buyers. “What are the demographics of who are attending? That’s where you have to go beyond the gross number of a million,” Mr Masie said.

These models have made it possible for shows in smaller theatres to make seven figure grosses. Apart from popularity and demand, grosses are closely linked to the size of a theatre — a show in a small theatre is limited by its number of seats, so its potential gross will be lower than a show in a larger theatre. “Ten years ago, it wouldn’t have been possible,” Mr Davenport said.

‘Dear Evan Hansen’ is one such beneficiary — the show is playing at the Music Box Theatre, one of ten theatres on Broadway with under 1,000 seats. It is capitalised at $9.5m and has a relatively small cast and orchestra.

If it continue on its current form, it could join the exclusive club of 39 shows that have sustained an average weekly gross of more than $1m over their entire run. Helped by positive reviews, the show has been over capacity since it opened and has already racked up more than $10m in advanced sales.