Putting the premium into the West End

Mark Shenton
Mark is associate editor of The Stage, as well as joint lead critic. He has written regularly for The Stage since 2005, including a daily online column.
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The arrival of The Book of Mormon last week from Broadway has been a game changer, in every sense, as witness its almost daily appearance in this column.

I've already written about the saturation media and marketing blitz around the show that, even before it opened, meant as I said last week that it "has been in the collective consciousness of London for months now: it has been everywhere on tubes, buses, in newspapers, on Twitter." And as I reported, "I’ve heard figures for the pre-opening marketing spend that would be enough to fund the entire budget of several West End shows in London (and keep the Union Theatre, for instance, in business from now to the end of the next half century at least)."

And now, if anything, that visibility has risen even more since it opened, with a continuing expansion of its Twitter ad campaign on tube posters and advertising hoardings all over London. You also can't open the newspaper website theatre page of The Telegraph, Independent, Guardian or the Standard without seeing an ad for Mormon there, either (and on some it hasn't just been a banner ad at the top but a border than has wrapped its way around and enfolded the entire editorial offering, so it seems to be even more prominent than the stories that the front page is sending you to).

But here's an interesting fact: click on any of those ads, and you are sent, not to the show's website or the theatre booking site, but to Ticketmaster. There, you will pay a booking fee of £7.50 (on the £72.50 top price) or £15 (on top of the £125 premium price). Book the same seats on the website of Delfont Mackintosh, who own the theatre, and the booking fee is £2 per ticket (regardless of the price).

So, as always, you have to shop around; even when an official ad directs you to buy a ticket, you are obviously not necessarily buying from the box office itself. I'm not saying this is underhand, but it is undoubtedly misleading. (You also, incidentally, have access to a far better inventory of tickets if you buy from the Delfont Mackintosh site than Ticketmaster, as I discovered on various tests I ran).

[pullquote]On Broadway, ticket inflation has been so rampant over the last few years that ordinary ticketgoers have seemingly all but been priced out of the market[/pullquote]

But then this is a show that people will seemingly pay any price to see, so what's a few extra pounds in booking fee? As I wrote here just the other day, not only did the theatre's own premium prices shoot up to £125, with immediate effect the day after the opening, but even that seems a bargain next to the £720.31 I found a pair going for on Viagogo for this Friday (including an eye-watering £90.30 booking fee, plus £9.95 delivery, and VAT added to both of those as a further afterthought!).

Of course we are in the world of the free economy (or rather the extremely expensive one), where there are no rules, just opportunities to rake in the profits. And that's exactly how things have worked on Broadway, too, where ticket inflation has been so rampant over the last few years that ordinary ticketgoers have seemingly all but been priced out of the market.

Except, of course, that they haven't. There are only a handful of shows that sell out totally, like The Book of Mormon; most others offer, as in the West End, countless discount offers.  And in a fascinating recent blog, Michael Taustine – the box office treasurer at Broadway's Lyceum Theatre, so an authoritative inside voice – has asked extremely pertinent questions about the ongoing and future viability of what has long been dubbed the Fabulous Invalid of Broadway.

Broadway as a whole, after decades of mistaken calls of its imminent demise, continues to roll along, posting impressive yearly grosses. But if the industry's foundation was ever on uncertain shifting sands, it is now. Most of the gains in dollars are not coming from increased attendance, but from higher prices. How long can this trend continue? The answer is unknowable, but it can't go on forever...

Several Broadway houses are dark this spring, an unusual and uneasy occurrence. Sure fire marketing schemes of the past, fall flat now as often as they yield underwhelming results. Productions with big name stars fail or underperform with disheartening regularity. All that the brightest marketing minds have brought to bear, have not changed the historic and unmerciful failure rate of Broadway shows. The result is having to run ever faster just to stay in the same place. Dynamic pricing of theater tickets, an idea pioneered by the airline industry, allows for fine tuning of ticket prices to meet spikes in demand. Oddly, prices only seem to dynamically go up. Odder still, is adopting the pricing methods of the rare industry in worse shape than Broadway.

Worryingly, that dynamic pricing model in real-time was spoken of as the "Holy Grail" by Howard Panter, joint chief executive of Britain's largest theatre owning chain Ambassador Theatre Group, as I reported in a blog posted back in September 2011. And I've just heard of its provision being included in some regional theatre contracts (not by ATG), where the difference in the price made between face value and the new, higher dynamic price it is actually sold at will be pocketed not, as you would think, in favour of the theatre producer of the show that has generated the sale but overwhelmingly in favour of the theatre owner instead, in a 75% to 25% ratio for the additional money earned.

The argument in favour of premium pricing has always been that if anyone is going to earn extra revenue from a hit show, it should be the creative teams who have made it – not touts out on the street (or hiding online somewhere in Viagogo-land). But right here we have proof that where a theatre has spied an opportunity to make extra revenue, it has immediately ring-fenced it from the creators of the product. Theatre owners already pockets all the revenue from booking fees, programme sales (using content, of course, that it is the producer's job to supply), bar sales etc that the show has brought in, but now some clearly want another slice of the cake for themselves only.

Meanwhile, of course, now that The Book of Mormon has thrown down the gauntlet with its own inflated premium price, we didn't have to wait long for other shows to follow suit. Earlier this week, The Audience raised its premium rate to the same price of £125. Last week Baz Bamigboye reported in the Daily Mail that touts outside the theatre were offering a pair of tickets outside the Gielgud for £500 a pair: as a tout told him, "These are shows people are desperate to see, guv, and we haven't had that for a while."

So again, next to that, the premium rate seems a bargain. But the trouble is that it creates a perception amongst regular theatregoers that good seats are now well beyond their reach through 'normal' channels, not just tout ones. When I spoke to Matthew Byam-Shaw, the show's producer, earlier this week, he insisted to me, "I'm not greedy." But it's all a question of degree. Matt's answer was that touting should be outlawed – but that's like trying to outlaw prostitution. As long as there is a market, there will always be someone trying to offer the service. And it seems to me that theatre producers are in danger of acting like tarts – and screwing the punters.