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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.


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 could afford only the meanest seats on the highest balcony, whereas in the Music Halls and the new Picture 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 England was second in popular culture to those other forms of entertainment. Theatre appealed more to the more affluent portion of society, particularly the rapidly growing middle classes who no doubt saw it as an advantage that the higher prices kept the rougher elements away.

English theatre in the Edwardian era had recently undergone a major transformation as a result of several external factors. There had been a boom in the growth of public transport, both in its older forms such as horse-drawn omnibuses, as well as in the arrival of new ones like underground railways, motor buses and electric trams. Furthermore, the widespread expansion of gas street lighting had made the streets safer to walk at nights. These factors together meant that people were both willing and able to enter the streets at night and to travel greater distances in search of entertainment, thus increasing the catchment areas of the various theatres. 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 a reduction in 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 longer a play runs, the less the burden of these costs in relation to overall revenue and the more clear profit. If longer running plays reduced costs then surely the prices of theatre tickets should have fallen,but this did not happen - 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 be secured which involved paying for the services of a 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 that play 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 the third successful play needed to turn a large enough profit to cover the losses of other two. From the individual playgoers point of view, 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 expensive compared to Music Hall and other 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 Leasehold300
Actors Salaries300
Stage Expenses125
Front of House wages60
Other Expenses250
(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. So, at a conservative estimate, 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.

Primary Sources: As indicated.

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