Some guy I know ran an idea by me the other day. It seemed radical on the face of it, but it may actually point the way to a new era of mega profitability for the biggest Broadway hits.
This guy pointed out how theater owners have been able to make a nice profit by selling the air rights to their theaters. The rights to the empty space above their theaters became quite valuable owing to the theaters landmark status. Since the buildings were protected from destruction and alteration, the rights to the thin air above them was deemed a sellable commodity, and in Manhattan, those rights became quite valuable.
This got him thinking. Selling nothing for money is a great business model. What if, in addition to selling tickets for seats to shows, if a theater would sell "stand-by" tickets the way the airlines do? Airlines frequently overbook their flights, and with Broadway copying the airline ticketing model, why not take the next logical step and sell stand-by tickets, or just plain overbook the performance?
I told him he was daft, that there was no way the public would stand for such a blatant and disrespectful practice. But, he schooled me with a dose of reality.
He explained that there is nothing new about the idea. "The airlines already employ the method and have for years. An entire culture of aiming for these seats and situations has sprung up with airline passengers hoping to grab the small perks the airlines bestow on the passengers that are "bumped". Those bumped passengers wear their status like a badge of honor, when they are allowed to sleep in the airport and sit in an unsold first-class seat hours or days after their scheduled flight. They think they've gotten one over the airlines! Hahahaha!!!"
He continued, "On Broadway, we've just entered the golden age! Customers show no aversion to ever higher prices. They don't even balk at variable pricing. The weekly grosses for the big hits are unbelievably lush! Broadway audiences can't get enough, and the producers are living la vida loca!"
I asked him to stick to English, and wondered "How might this work on Broadway? Just sell seats willy-nilly and let the first to arrive get the seats? That sounds like a recipe for disaster!", I told him.
He said, "No, no, dear boy. That doesn't leverage the power of the computers. It can be done!" So, for the price of a round of beers, he would tell me how it could work.
"Tickets are already just bits in a barcode. Theaters already scan those barcodes and mark the seat as occupied, the ticket used. But what happens when you have a sold out show, but not everyone shows up? There are specific seats, unscanned but paid for, that are unoccupied. I say, resell those locations! The original owner of those seats isn't there, so what's the difference? These seats can be sold for any price at all, even premium prices!!!"
"Now it is you who are indeed daft, sir," I interjected. "What about that bane of Broadway audiences, actors and house staff alike, the inevitable latecomers? Are they not entitled to their seats, even if they arrive late?"
My friend wiped the beer foam from the corner of his mouth. "That will have to change. As a matter of fact, it has started to change already. In more and more cases, late arrivals have been barred from entering the theater as a result of the creative decisions of the most successful producers working today. House staffs are becoming quite used to dealing with those unhappy wretches that are late to the shows."
I was still at a loss. "Why would latecomers be barred, but standbys permitted in?"
"Because," he whispered scornfully, "that's the new rule. The latecomers will have rights to the seats only up to a predetermined moment. If their bits are not scanned, the rights revert to the theater and are promptly resold. The potential increase in revenue is virtually unlimited!"
"That, sir, will be a public relations debacle! How could we justify barring a family with children to a Disney hit like The Lion King? Or anyone from the latest mega hit like The Producers, The Book of Mormon, or now Hamilton? The bad publicity would be crippling!" I complained.
"Have you heard nothing I've said, you ignoramus? I've already shown you how the public is more than happy to accept any and all offenses heaped upon them? They don't care! Besides, for every sad story the new system creates, there will be a happy one created. The "crippled theatergoer with only one night in town to see Hamilton", or the 'holiday wishes of little Timmy miraculously fulfilled' as he gets in to see Wicked at the last minute on Christmas Day. Sure, it would require the publicity and marketing departments of these shows to crank out more manufactured stories, but at least they'll finally have something useful to do!" My drinking buddy was on a roll, I could swear I saw puffs of smoke emitted from his ears.
I was taken aback by his impassioned presentation, so I tried a different tack. "What about the nuts and bolts of this? How would it actually work?"
My friend's chest stopped heaving, he took a settled breath and said, "The ticketing systems would need to be modernized. Quick and accurate information on unoccupied seats would be available to the box office. At the predetermined time, all empty seats would be available for sale. Purchasers would have no knowledge of the specific locations, because time is of the essence. Pay, ticket, go."
"I suppose people would not care where they sit, we've learned that from the TodayTix experience. Those folks have no idea where they'll sit, and are happy to pay a fee for that. It's remarkable," I mused, as I felt myself being swayed over to my friend's notion.
"That's right, I think you are finally getting this!" my friend exclaimed as he pushed his empty beer toward the bartender pointing at him obnoxiously to refill his glass, "and, the hotter the show, the higher the prices that can be charged! We know that no matter how hot a show is, there are always no-shows and late arrivals. It's time to stop leaving that money on the table!" I noticed he had put no money on the bar, so I began fishing for my credit card.
I don't know if it was the beer or the weight of received wisdom that I was feeling, but I then blurted out, "It can work! And it doesn't even have to be limited to mega hits! We can do the same thing for the orchestra section when someone in the mezzanine or balcony just wants to improve their seats!" I was giddy with the possibilities! It's so empowering to think of new and interesting revenue streams! "The hell with 'paying the difference'! Charge them the full load, baby!!!" I was now feeling a bit out of control. I didn't hold my beer as well as I used to, apparently.
My friend looked at me and smiled, satisfied, as if I had snatched the pebble from my master's hand. He finally spoke again, and he quietly said, "Sure, you'd need to hire a few more ushers, maybe an extra security guard, make an accommodation with the unions, but those are trifles. Imagine several hundred more top priced and premium priced tickets being sold on a weekly basis for the hottest of hits," he grinned.
"I have one last reservation," I said, chuckling to myself at the inadvertent pun I just made. "Won't this new policy hurt the 'lesser' shows, the ones that are just getting by? If you siphon off hundreds of seats a week from these shows, won't they be the ones to likely suffer from the loss of people getting in on stand-by at the hottest hits?"
Without skipping a beat, my friend gulped down his new ice cold beer and swiftly said, "Who cares? It's just business!"
I could not, in good conscience, disagree with him.
This guy pointed out how theater owners have been able to make a nice profit by selling the air rights to their theaters. The rights to the empty space above their theaters became quite valuable owing to the theaters landmark status. Since the buildings were protected from destruction and alteration, the rights to the thin air above them was deemed a sellable commodity, and in Manhattan, those rights became quite valuable.
This got him thinking. Selling nothing for money is a great business model. What if, in addition to selling tickets for seats to shows, if a theater would sell "stand-by" tickets the way the airlines do? Airlines frequently overbook their flights, and with Broadway copying the airline ticketing model, why not take the next logical step and sell stand-by tickets, or just plain overbook the performance?
I told him he was daft, that there was no way the public would stand for such a blatant and disrespectful practice. But, he schooled me with a dose of reality.
He explained that there is nothing new about the idea. "The airlines already employ the method and have for years. An entire culture of aiming for these seats and situations has sprung up with airline passengers hoping to grab the small perks the airlines bestow on the passengers that are "bumped". Those bumped passengers wear their status like a badge of honor, when they are allowed to sleep in the airport and sit in an unsold first-class seat hours or days after their scheduled flight. They think they've gotten one over the airlines! Hahahaha!!!"
He continued, "On Broadway, we've just entered the golden age! Customers show no aversion to ever higher prices. They don't even balk at variable pricing. The weekly grosses for the big hits are unbelievably lush! Broadway audiences can't get enough, and the producers are living la vida loca!"
I asked him to stick to English, and wondered "How might this work on Broadway? Just sell seats willy-nilly and let the first to arrive get the seats? That sounds like a recipe for disaster!", I told him.
He said, "No, no, dear boy. That doesn't leverage the power of the computers. It can be done!" So, for the price of a round of beers, he would tell me how it could work.
"Tickets are already just bits in a barcode. Theaters already scan those barcodes and mark the seat as occupied, the ticket used. But what happens when you have a sold out show, but not everyone shows up? There are specific seats, unscanned but paid for, that are unoccupied. I say, resell those locations! The original owner of those seats isn't there, so what's the difference? These seats can be sold for any price at all, even premium prices!!!"
"Now it is you who are indeed daft, sir," I interjected. "What about that bane of Broadway audiences, actors and house staff alike, the inevitable latecomers? Are they not entitled to their seats, even if they arrive late?"
My friend wiped the beer foam from the corner of his mouth. "That will have to change. As a matter of fact, it has started to change already. In more and more cases, late arrivals have been barred from entering the theater as a result of the creative decisions of the most successful producers working today. House staffs are becoming quite used to dealing with those unhappy wretches that are late to the shows."
I was still at a loss. "Why would latecomers be barred, but standbys permitted in?"
"Because," he whispered scornfully, "that's the new rule. The latecomers will have rights to the seats only up to a predetermined moment. If their bits are not scanned, the rights revert to the theater and are promptly resold. The potential increase in revenue is virtually unlimited!"
"That, sir, will be a public relations debacle! How could we justify barring a family with children to a Disney hit like The Lion King? Or anyone from the latest mega hit like The Producers, The Book of Mormon, or now Hamilton? The bad publicity would be crippling!" I complained.
"Have you heard nothing I've said, you ignoramus? I've already shown you how the public is more than happy to accept any and all offenses heaped upon them? They don't care! Besides, for every sad story the new system creates, there will be a happy one created. The "crippled theatergoer with only one night in town to see Hamilton", or the 'holiday wishes of little Timmy miraculously fulfilled' as he gets in to see Wicked at the last minute on Christmas Day. Sure, it would require the publicity and marketing departments of these shows to crank out more manufactured stories, but at least they'll finally have something useful to do!" My drinking buddy was on a roll, I could swear I saw puffs of smoke emitted from his ears.
I was taken aback by his impassioned presentation, so I tried a different tack. "What about the nuts and bolts of this? How would it actually work?"
My friend's chest stopped heaving, he took a settled breath and said, "The ticketing systems would need to be modernized. Quick and accurate information on unoccupied seats would be available to the box office. At the predetermined time, all empty seats would be available for sale. Purchasers would have no knowledge of the specific locations, because time is of the essence. Pay, ticket, go."
"I suppose people would not care where they sit, we've learned that from the TodayTix experience. Those folks have no idea where they'll sit, and are happy to pay a fee for that. It's remarkable," I mused, as I felt myself being swayed over to my friend's notion.
"That's right, I think you are finally getting this!" my friend exclaimed as he pushed his empty beer toward the bartender pointing at him obnoxiously to refill his glass, "and, the hotter the show, the higher the prices that can be charged! We know that no matter how hot a show is, there are always no-shows and late arrivals. It's time to stop leaving that money on the table!" I noticed he had put no money on the bar, so I began fishing for my credit card.
I don't know if it was the beer or the weight of received wisdom that I was feeling, but I then blurted out, "It can work! And it doesn't even have to be limited to mega hits! We can do the same thing for the orchestra section when someone in the mezzanine or balcony just wants to improve their seats!" I was giddy with the possibilities! It's so empowering to think of new and interesting revenue streams! "The hell with 'paying the difference'! Charge them the full load, baby!!!" I was now feeling a bit out of control. I didn't hold my beer as well as I used to, apparently.
My friend looked at me and smiled, satisfied, as if I had snatched the pebble from my master's hand. He finally spoke again, and he quietly said, "Sure, you'd need to hire a few more ushers, maybe an extra security guard, make an accommodation with the unions, but those are trifles. Imagine several hundred more top priced and premium priced tickets being sold on a weekly basis for the hottest of hits," he grinned.
"I have one last reservation," I said, chuckling to myself at the inadvertent pun I just made. "Won't this new policy hurt the 'lesser' shows, the ones that are just getting by? If you siphon off hundreds of seats a week from these shows, won't they be the ones to likely suffer from the loss of people getting in on stand-by at the hottest hits?"
Without skipping a beat, my friend gulped down his new ice cold beer and swiftly said, "Who cares? It's just business!"
I could not, in good conscience, disagree with him.
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