Theatre Economics

The following is a reproduction of an article from a period publication in which the author, under the pen name of Polonius, is bemoaning the inequity, as he sees it, of theatre prices as they existed at the time. Following the article, by way of explanation, is a short treatise on the economics of the Edwardian theatre.

The Playgoer and Society Illustrated, Volume 9, Number 49. October 1913.
What the Playgoer Pays

The laws of supply and demand are hopelessly inoperative in the case of the theatre. The privilege of calling the tune proverbially belongs to the person who pays the piper, but never is the customer of the theatre permitted to regulate the amount of his contribution. The playgoer may certainly select his seat from a graduated scale of charges, but that only affects his comfort and convenience. The standard of prices remains the same whatever the quality of the goods. By the terms of an inexorable rule the West End theatre is committed to the system of half-a-guinea for a stall, with the other seats in proportion.

The playgoer pays. He puts down his money the same for the dullest play as for the most brilliant production, as much for the sumptuously mounted musical comedy, with all its wealth of splendour, as for the least costly entertainment put before him. Some productions there are, of course, that cannot be estimated at money's worth, but to most of them a market value can be attached.

No one wants to pay more for an article than is absolutely necessary. The millionaire is as keen to achieve a sound deal in motor-cars as the business man is to drive a hard bargain, or the housewife to replenish her larder at the lowest market prices. But the patron of the play has to take what is offered or leave it. And the theatres suffer accordingly. How much more remunerative for the stalls to be full at five shillings than empty at half-a-guinea!

Popular prices, as they are called, have been tried with encouraging success at the newer theatres. For a number of years the Lyceum has been running melodrama, Shakespeare, and pantomime with a 5s. stall and a sixpenny gallery, and the New Princes has done good business at the same tariff. Recently, the Aldwych has followed suit with every promise of prosperity.

The system of fees is one which would also bear amendment. When he has paid his entrance money, the playgoer's liabilities are by no means discharged. There are the cloakroom and the programme to settle for - 6d. each in the better portions of the house, and in the former case the voucher often bears the warning that the management are not responsible for loss or damage to the property in their charge! Americans, who are much more liberally catered for, ridicule us. The other night, I am told, a millionaire from the States, after giving sixpence to the girl who showed him to his seat, sixpence for the programme, sixpence to the cloak-room attendant, and sixpence to the commissionaire who called his motor-brougham, said to the last-named servitor, "I walked along a strip of carpet just now for which I haven't paid; please hand this shilling over to the management!"

Is it any wonder that the effort to combat the competition of music hall and picture palace is often abortive? No less an authority than Mr. Cyril Maude, who himself houses his patrons hospitably, has told his brother managers that he did not see why theatres could not seat the public as well as the music hall did. He was beginning to be convmced that as long as the ordinary seeker after amusement found that he got a real comfortable seat at a continuous show for a small price, he would decline to pay four times that amount to sit on an uncomfortable padded bench.

I do not advocate so drastic a descent as some of the prices indicated above. It might be a 25 per cent. reduction, or it might be 75 per cent., but the playgoer should be able to say: "A seat in the upper circle of this theatre is worth 4s., but a seat in the same position at that theatre is worth 2s. and no more," and select the house most compatible with his views. A revision of prices of admission would be better for the play and better tor the playgoer, and might often be the means of turning the ebbing tide of failure into the flowing tide of success.

POLONIUS.

The Economics of the Theatre

The theatre, as with any other institution, in order to be a part of popular culture must be priced at a level by which it is within reach of the pocket of the average citizen. This is as true now as it has ever been. But does the theatre attain this standard, and has it ever?

In Edwardian times the answer was probably no. In the great Edwardian theatres the average working man from the lowest social orders could afford only the meanest seats on the highest balcony, whereas in the Music Halls and, later, in the new Picture (cinema) Houses he could, for the same price, purchase a seat with a much better view of the action and within better hearing range of the music. For that reason, theatre in Edwardian Britain was subordinate in popular culture to those other forms of entertainment. Theatre appealed more to the slightly more affluent portion of society, particularly the rapidly growing middle and lower-middle classes who no doubt saw it as an advantage that the higher prices kept the 'riff-raff' away.

British theatre in the Edwardian era was riding on the crest of a boom in theatre construction that had begun around the middle of the nineteenth century, or approximately fifty years earlier. This came in line with a massive and rapid increase in demand, not only for theatrical entertainment, but for entertainment of all kinds - the reasons for which are manifold. First was the industrial revolution, which had concentrated the population into towns and cities more densely than ever before, as well as creating a new social order of higher-paid skilled professional workers with a little income to spare. Even the average unskilled worker was, for the first time in history, able to put aside a few pennies for his entertainment. Next was the introduction of street lighting which began on a small scale in London at the beginning of the nineteenth century and developed and expanded rapidly as the century progressed. By the beginning of the Edwardian era, the streets of every major town and city in Britain were well lit making them easier, and above all safer, to navigate at night. Then there was the similarly rapid expansion in the provision of public transport, both in increasing numbers of its older forms such as hansom-cabs and horse-drawn omnibuses, as well as in the arrival of new ones like underground railways, motor buses and electric trams. The cumulative effects of these developments on the average representative of the working classes was a thirst for entertainment to escape their humdrum lives, a few extra pennies in their pocket with which to purchase that entertainment, a willingness to go out on the streets at night to obtain it, and an ability to travel further in search of it.

The expansion in public transport had a secondary effect for the theatres in that it greatly extended their catchment areas as patrons could now travel from much further afield to attend the theatres. This was especially true in London where frequent trains plied between the West End and the suburbs. More potential patrons meant that plays could run longer, thus leading to the advent of the long-running play and the milestone of one hundred performances, once rarely acheived, becoming commonly surpassed.

Longer running plays led to significant savings in certain areas of cost vs revenue. Some cost elements are pretty much the same irrespective of how long a play runs, ie. the cost of producing the sets and costumes. The greater the number of performances therefore, the less the proportion of these costs that is attributable to each individual performance, hence the longer a plays runs to full houses the greater the proportion of profit. If longer running plays reduced costs then surely either the prices of theatre tickets should have fallen or theatrical entrepreneurs should have made outrageous profits, but in fact, by and large, neither was true - why?

In a word, competition! As the number of theatre patrons increased, so did the number of theatres. Whilst the potential audience for any given production had increased significantly, so had the number of other productions it found itself in direct competition with. To benefit from the larger audiences now available, a production needed to have an edge, something to set it apart and make it a preferred choice over its competitors. To be successful in that environment a play needed lavish sets and costumes, and the highest paid popular stars to draw in the crowds. Consequently, although revenues increased, costs likewise spiralled as producers tried to mount ever more lavish productions. Moreover, the public quickly came to expect these extravagances so that it became increasingly difficult for even the best of plays to succeed without them.

Much of this expense had to be incurred before ever the curtains opened on the first night. First of all a good play had to be secured which involved paying for the services of a talented script writer. If it was to be a musical play then the services of a composer must also be secured. Next, sets had to be designed and constructed and costumes assembled. Finally a cast must be gathered and a venue secured for some weeks before the production was due to open so that they might all learn and practice their roles. All of this amounted to some considerable expense before ever a single penny was earned. Once the play opened, it must recover through the price of its tickets sufficient funds to not only recover its ongoing costs in terms of wages for cast and stage hands etc., but enough extra during its run to recoup that initial outlay.

Putting on a play was a speculative investment at best, which may or may not earn sufficient funds to recover that investment. As the investment required in staging a play rose, so did the risk associated with that investment. The more it cost to stage a play, the more the producer stood to lose if it was a failure. In fact it was estimated that fully two thirds of all productions in that period failed to recover the initial investment. Furthermore, any play which, after it opened, was not grossing enough to meet its ongoing costs was not only failing to repay its initial investment, it was adding to the debt. This meant that unsuccessful plays had to be taken off quickly, which meant incurring the cost of preparing a new production to take its place.

When a play was taken off prematurely the scenery, which may have been created at some considerable cost, became virtually worthless. Likewise, the time and expense incurred in preparations and rehearsals was wasted, as were the costs of advertisements and flyers. Moreover, the actors who had to be released might have to wait until the start of a new season to secure new engagements - a fact which the more astute would be sure to consider when negotiating their contracts.

If two out of three plays were failures, this meant of course that, from the entrepreneurs point of view, the third successful play needed to turn a large enough profit to cover the losses of the other two. From the individual playgoers viewpoint, this in turn meant that when they paid admission for a show which they did wish to go and see, they were also in effect paying (in part) for two other plays which they did not wish to see. With a system as wasteful as this, it is little wonder that theatre tickets were expensive compared to Music Hall and other more sure fire forms of entertainment.

To set all of this into perspective, the following chart shows estimated weekly costs of staging a play in London.

Estimated Weekly Costs for London Theatres
Property Leasehold£300
Actors Salaries£300
Stage Expenses£125
Front of House wages£60
Other Expenses£250
(source "The Theatre of Today" Hiram Kelly Moderwell 1915.)

The initial set-up costs varied greatly but a figure of around £3500 was not out of the question, so we can add to the above £100 pounds per week to recover this investment over a 35 week season. At a conservative estimate, therefore, a play must take in a minimum of around £1100 per week just to break even. However, A full house, even at one of the smaller London theatres, could easily bring in upwards of £500 a night so, although the risks were significant, so was the potential payoff when a play was successful.

Below are reproduced some more period accounts of theatre finances.

(The Era [London, UK] - 26th March, 1892.)
THE FINANCE OF THE DRAMA

One of the most remarkable features of the modern English stage is the importance of its financial operations. Dramatists, actors, and managers who were in their prime fifty years back would be astonished could they return to earth and observe the increase in the amounts dealt with in connection with the drama. It is difficult to obtain information on the subject, and many of our ideas must necessarily be conjectural. But sufficient is known to prove the immense alteration which has taken place in the profits of author, actor, and manager.

In the case of authors, incomings have wonderfully improved since H. J. BYRON sold his capital comedies for a fixed sum down, and died a comparatively poor man. Mr DION BOUCICAULT was a dramatist who may be said to have belonged to two generations, for many of his later successes came within the cycle of higher payments. He stated, shortly before his death, that he had sometimes made as much as £40,000 a year by his pen. A recent Drury Lane success realised, in author?s fees alone, £1,000 a week, which Mr PETTITT and Sir AUGUSTUS HARRIS divided between them. Mr SYDNEY GRUNDY is said to have taken £l,800 in fees from A Pair of Spectacles up to its 250th night of representation, in addition to a large sum down. Mr H. A. JONES?s complaint against the actor-manager that when he (Mr JONES) had made £3,000 from one of his plays the manager had netted £10,000 let us a little into the secrets of authors? profits. Mr W. S. GILBERT received £90,000 in eleven years as his share of the profits of his and Sir ARTHUR SULLIVAN?s operas.

(Daily Mail [London, UK] - 27th January 1903.)
DOES SERIOUS DRAMA PAY?
MB. BEERBOHM TREE ANSWERS IN THE AFFIRMATIVE

The assertion of Mr. Henry Arthur Jones that during the past two years serious drama of modern English life had not met with monetary success at the West End theatres has caused a considerable stir among London theatre managers.

Mr. Jones poointed to the fact that while the Lyceum Theatre £1 shares were worth only 7d. the Empire Theatre 15s. shares were worth £3 5s. He also observed that a national theatre would not succeed until supported by the co-operation of the English playgoing public.

Mr. Beerbohm Tree, interviewed last night, said:-

"I should not wish to contradict Mr. Jones, who is not only a vehement but a sincere champion of his own opinions; but I cannot help thinking that the public would go to the modern drama in larger numbers if the quality of those dramas were of a higher order."

"My opinion of public opinion is as shifting as public opinion is itself. Personally I have no reason to mistrust my public - indeed, I am about to put it to a somewhat severe test in producing a drama with probably the most serious motive of modern times - I mean 'Resurrection.'"

MUSIC-HALL THE NATIONAL PASTIME.

"After the production of that play I will give you my opinion of public opinion of the present day. Of course there must be a larger number of people who care for the lighter forms of entertainment, for people betake themselves to the theatre in an after-dinner mood. In this country it is sport rather than the art of the theatre which engrosses the larger public. And, as I recently reminded my audience, the music-hall bids fair to become the national pastime, football always excepted."

"A large section of the public Press regard it as an impertinence on our part to take the theatre seriously. They persist in regarding it only as a vehicle of amusement - a mere annexe of the music-hall. But I contend that there is a residuum of the public that regards the theatre not merely as an amusement, but also as a national pastime, and I can only point to the good fortune that has attended my policy at this theatre - a policy which has been largely based upon the lin es of serious drama, when plays such as Shakespeare's 'Julius and Caesar,' 'King John,' and Mr. Phillip's 'Herod' and 'Ulyses' have been received with open arms by the public."

"If I have not produced more numerous examples of the modern drama, perhaps the reason may be found in the fact that the modern dramatists have not supplied me with the material, for which I, in chorus with my brother managers, have been panting for many years."

The following table shows the recent market value of a number of theatre and music-hall shares:-

Alhambra (£1)  - £1 10 0 to £1 15 0
Drury Lane (15s. paid)  - £1 7 6 to £1 15 0
Empire (15s. paid)  - £3 5 0
Gaiety (£1)  - £2 2 6
London Pavilion (£5)  - £8 0 0
Lyceum (£1)  - £0 0 6 to £0 1 4
Moss Empires (£5)  - £7 15 0 to £8 5 0
Oxford (£5)  - £7 10 0 to £8 0 0
Palace (9s. paid)  - £0 17 0 to £0 19 0

And it is obvious that on the system of ten per cent on the gross even a moderately successful run must bring in a little fortune to the author of the piece. An ordinary West-end theatre holds about £200 when quite full, and even half-full houses for a week would bring the author?s fees for seven days up to £60. Mr GEORGE R. SIMS stated some years since that the fees he had received from one piece alone amounted to within a trifle of £10,000, and that cash was still rolling in for it at the rate of £100 a week; and Mr WILSON BARRETT paid Mr SIMS £30,000 in fees over The Lights o? London alone. Mr GEORGE EDWARDES gave £2,000 for the right to play Carmen Up to Date in the provinces, and American and Australian rights are fruitful sources of wealth to the successful author.

The manager's profits are more difficult to ascertain, and he runs greater risks. At many London theatres the front of the house is sold to a refreshment contractor, who also has, in some cases, the privilege of selling programmes. The profit made on programmes may be judged from the fact that the "front" lets for £35 a week when programmes are sold by the contractor, and for £10 if they are given away by the management.

As for the chief source of income to the manager - the money taken at the doors - that, of course, varies immensely. Fortunes are undoubtedly made in theatrical management, but, as at the "tables" at Monaco, much depends upon the player retiring from the game at the right moment. Theatres and leading actors have their day, and woe to the house or the actor-manager which has outlived his or its popularity. Mr FALCONER made £30,000 in a single year at the Lyceum, and at the Vaudeville Our Boys was played for four years to an average profit of £400 a week. But these were exceptionally lucky hits and while the receipts of management are variable, the expenses to be met are regular and inevitable.

We may perhaps fairly put the normal weekly expenses of a West-end theatre at about £300, or £50 a night. The salaries of the company may be about £120 a week for comedy, and double that amount for comic opera. Taking an average of £480 as the weekly expenses of a West-end house, we find that it costs £80 a night to "bring up the curtain." Now a house two-thirds full will be equal to £120, bringing £40 clear profit to the management. If the house is only half full £10 will represent the managers entire gain for the evening.

We do not give these figures as being accurate, but as merely a proximate. The risk of modern theatrical management is tremendously increased by the enormous cost of mounting. Modern audiences will not put up with meagre mounting ; and the profits for many nights have often to be devoted to paying off the capital invested in costly scenery and costumes. An ordinary comic opera costs £1,000 to mount; and as for productions like that of Henry VIII. at the Lyceum Theatre, the colossal expenditure involved in them is notorious.

The position of the modern theatrical manager is, then, that of a great general engaged in a series of momentous campaigns. If he succeed, his victory is gloriously profitable; if he fail, he is too often utterly routed. The nerve and courage required for the vocation are consequently very great. The old "stock-company" manager, with his moderate expenses in mounting, his cheap company, his clientele who could be relied upon to support him pretty steadily, and his frequent changes of bill, was a very different personage from the modern theatrical financier, who often has to be speculator, leading actor, stage-manager, and acting-manager in one. Efficient as his assistants in the latter departments may be, it needs the personal inspiration of the master-mind in each to obtain competency. How some of our actor-managers can endure the combined strains of their different anxieties has often puzzled us. How much on a first night, nowadays, hangs in the balance! An accident to the scenery, or a row in the gallery, may turn the scale of public favour; and yet, withal, the actor-manager must think, first of all, of himself and of his creation. The manager of the present day is as different a personage from his predecessor of a hundred years back as is a Pullman express from an old stage coach. He must belong to the elite of doers and endurers. He must be learned enough to defend a point of archeology, polished enough to cut a good figure in society, and literary enough to write defensive articles in the leading reviews. That so many of our modern London managers are hale and hearty, that so few of them fail in business, and that they are so seldom incapacitated by illness, proves both that they possess extraordinary qualities, and that the old proverb about it being better to rub than rust still enshrines a great truism.


(Daily Mail [London, UK] - 2nd January 1904.)
THEATRE PROFIT AND LOSS
MR. GEORGE EDWARDES ON MUSICAL COMEDY

At the Actors Benevolent Fund dinner the chairman, Mr. Tree, referred to a public statement made by Mr. Jerome K. Jerome to the effect that a certain play produced in London recently had made a profit on its London run of £50,000, and another £20,000 in the provinces.

Mr. Tree was sceptical about these figures, but his reference gave them great publicity; and, as it has since leaked out that the play alluded to was "A Country Girl," now on the programme at Daly's Theatre, Mr. George Edwardes has something to say about the profits of "A Country Girl" in particular, and about the profits and losses of musical comedy production in general.

"Mr. Tree was quite right in refusing to accept figures about a play that were merely put forward without special knowledge of the true state of affairs," said Mr. Edwardes, "and I have no doubt that it will come as a surprise to the public in general to know that musical comedy production in London, for London alone, does not pay the manager.

"It has not paid me; and I think you cannot point to any one manager in London who has ever produced a sequence of musical pieces with success. By success, in this instance, I mean with a profit for all concerned."

Producing a musical comedy is apparently as great a gamble as forming a syndicate to exploit a system at Monte Carlo. In either case you may get a run of luck. In either case you may exhaust your bank without even having experienced a good "look in."

LOSSES IN LONDON

Several musical comedies other than those produced by Mr. Edwardes have been staged in London with profit. They were put on magnificently and enjoyed long runs, but two successes never came consecutively. "The Belle of New York" at the Shaftesbury and "Florodora" at the Lyric were great successes with the public. They are among the exceptions.

"I am credited with making a financial success of every play I put on," Mr. Edwardes remarked; "but I can assure you that as far as London is concerned no theatre produces a sequence of profitable musical comedies except one, and that one is the Gaiety. 'A Country Girl' at Daly's is playing to good houses, and has always done so, but for several weeks it has shown a loss of from £200 to £300 a week.

"It made money for months and months, but those early profits go to pay for the cost of the production. After a year or fifteen months business always falls off, and the margin of profit is lost. You cannot reduce your expenses by changing your principals or lessening your orchestra. What are you to do?"

"Like many other managers, I have to pay my rent and other expenses when the theatre is closed; therefore, like other managers, I often keep a piece going at a loss until I think the proper time has arrived for producing a new play."

"No, London is not a source of profit to the producer of musical plays, because the salaries and rents are so enormous. That is my experience. It pays, of course, to produce in London, because the advertisement given to the piece by people who have seen it gives an enormous help to the companies that I send to the provinces, America, Africa, and Australia."

GAINS IN THE PROVINCES

"There is another instance of a play that did not pay in London but has made money elsewhere. It is 'The Girl from Kay's,' which drew capital audiences all last year. Yet when Mr. Frohman and I paid fees, etc., we find that it shows us a loss of .£2,000 on the year."

"At the Lyric the production of 'The Duchess of Dantzic' cost a little over £10,000. With full houses - every seat occupied, I mean - my weekly profits, I find, cannot exceed £250. At that rate ten months must elapse before my initial outlay is got back. At the end of a year business must in the nature of things fall off, and there is little chance of making money with the London run."

"Every year the public demands something new, some new expense, more elaborate scenery, and more gorgeous costumes. The orchestra for a first-class production is a heavy item, to be added to a salary list of startling proportions. Where will it stop?"

The London productions of musical comedy, Mr. Edwardes admitted, pay the composers, authors, and artists. The scene painters, too, may be included. Outside of those come the costumiers, property makers, etc., etc. The manager is the only one in doubt. He is waiting to risk much that it may be returned to him by the provinces and distant continents.

At present Mr. Edwardes says he pays out about £10,000 every week in salaries, fees, etc.; yet he is looking forward another couple of years when he says that three new theatres will be completed, and of those he will occupy more than one.


Primary Sources: As indicated.

Articles Index   Home