Towards the end of the 19th century New York's theater district was given the nickname "The Great White Way" by a New York Evening Telegram reporter. Moved to lyricism by the area's marketing – theater owners would illuminate their outdoor advertisements with bright, neon lights – the writer and his "Great White Way" championed the industry's romantic mythology as much as they did its use of modern technology.
Today, there aren't many who would accuse Broadway of technological modernity. Many of the forty theaters lining 42nd to 53rd streets are hundreds of years old. While movie theaters are ditching projection booths in favor of digital upgrades, theater remains ever the same. But Broadway's paradoxes – a throwback system still named for cutting-edge advancements, say – go beyond its various pen names. In the area that matters most to audiences, contradictions abound.
According to Mike Rafael, sales and ticketing analyst for top Broadway ad agency Serino/Coyne, when it comes to theater tickets, the goal of Broadway producers is to end up on the secondary ticket market: that crowded digital bazaar where tickets sell below or above but never at face value. When you're on the Way, says Rafael, "The thing you should aspire to is the thing you hate."
Broadway and the Secondary Ticket Market
Which is both just and not nearly as crazy as it sounds. As Rafael explains, the goal of any show on Broadway is to be so successful it sells out. But, says Rafael, people can always get tickets on the secondary ticket market. Hence, the goal of producers is to end up on the "hated" secondary market.
That's where brokers resell the tickets they've bought from the primary market, from legitimate locations like Telecharge and Ticketmaster. "Brokers" are the men and women who, credit card at the ready or electronic bots at their disposal, buy up hundreds and thousands of tickets to sell for profit on third-party sites like stubhub.com (the sites we aggregate here at SeatGeek). When they take to the streets to approach patrons at the theater's entrance, they're called scalpers.
Insofar as it alters the face-value price of tickets as determined by the shows themselves, many Broadway producers take a hostile view of the secondary market. The feeling goes (not without merit) that brokers have no personal interest in an individual show. They buy tickets for the "hot" production of the moment, which they then sell for as much as people are willing to pay, dumping them for well below face value when the show cools. This additional fiscal instability only compounds the shaky standing of an industry in which 7 out of 8 plays and 4 out of 5 musicals lose everything each year.
It is also an industry which, in 2011 alone, made over a billion dollars in grosses. It is an industry in which attendance is up for 2012. It is an industry benefiting from a youthful resurgence in both subject matter and audience, thanks to the recent successes of Book of Mormon and Spiderman Turn Off the Dark.
In other words, while the secondary market is a thorn in the cash cow's side, for those willing to run the numbers, it has yet to spring a significant income leak. But what, if anything, is Broadway's relationship with the secondary market doing for the consumer?
Broadway and the Consumer
According to Rafael, the average top ticket price for a Broadway show is around $140. The average ticket purchase is 2.4 tickets. The average family purchases 4 tickets. Broadway's average, or norm, is then equal to Rafael's summation: "a lot of people paying a lot of money."
Yet, thanks to the secondary market, Rafael is among those in favor of increasing ticket prices. He is also in favor of lowering ticket prices. Both, he says, are for your benefit.
"Theater's underpriced," he explains, citing the willingness of audience members to pay the kind of exorbitant prices often found on the secondary market. "Theater tickets have almost never been valued properly. As high as prices are, we know that people are paying more than that."
The moralist in the ticketing morass would point out how much of a deterrent Rafael's price hikes pose to lower-income patrons. More pragmatically, it runs the risk of isolating the "youth" demographic so coveted by the entertainment industry, the one Broadway has just begun to entice. That's why Rafael is also in favor of lowering prices. He suggests widening the gap between a show's most and least expensive seats, a strategy he says is similar to a sports-based model: "broadening the scale that allows greater accessibility."
"Accessibility to tickets should never be a consideration. If you want to see a show, you should be able to. Period." And since the secondary market isn't going away any time soon, "getting rid of it is not going to happen," he states. It would seem the industry's best interests lie in playing ball, at least if it's looking to keep a firm grip on its product, and help a few – or millions – of fans along the way.
Tale as Old as PR
Whether or not Rafael's practical high-low model will gain traction in a business where "you can't make a living, but you can make a killing" remains to be seen. He and others are up against a conservative fear of perception - producers who are afraid of appearing greedy, or of having a bad write-up in The New York Times or Variety.
The goal is to continue providing the kind of personal, quality, effervescently romantic experience audiences have sought for centuries, in such a way as to maintain the health of the business and the trust of its clients. Or, as Rafael puts it: "You buy a ticket, you go to a show, you sit in an audience, and it changes your life. That's the goal. How do we keep it that simple?"