The Economics of Terror: Why the West End Needs a New Audience

London's West End at night

Shaftesbury Avenue in the West End (photo: Stowaway)

London’s theatre season, much like New York, is informally bookended by an awards season that each year seems to stretch well beyond the interest of the casual theatregoer and tests the patience of even the hardiest arts journalist. Unlike the Broadway season, however, London’s West End does not have a formal year-to-year cut-off date, resulting in a slightly more fragmented awards trajectory for new productions. Comparing the openings between the two theatre capitals over the next few months shows New York’s obsession with the Tony cut-off date and London’s apathy at pulling together a formal season to service one single award ceremony.

The city is quieter than usual.The West End is currently a dark place, quite literally. It was recently reported that around 20% of West End seats were unavailable to be sold, as over 8,000 potential seats across a number of West End houses were without tenants, with some theatres facing renovation plans and others waiting longer periods for new shows to take over the marquee. Whilst not particularly a new phenomena for Broadway audiences, dark houses are certainly unique for the West End and the commercial industry is certainly beginning to feel the effects of having some of the major bloodlines severed. Although this is no direct relation to the terrorist attacks in Paris or Brussels, the timing is certainly not helpful when looking at the tourist implications on the city as a whole. As a Londoner, you certainly get the sense that the city is quieter than usual, and the number of dark theatres adds to that sensation.

Currently, the London Palladium, Victoria Palace, Prince Edward and The Palace are without long-term tenants, either through gaps in the scheduling or forced renovation work, totalling between them almost 7,000 seats each night. With a conservative average ticket price of around £45, that’s around £310,000 per night, or, based on an eight-show schedule, just shy of £2.5million every week.

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London’s theatre industry is reportedly booming, and if the SOLT (Society of London Theatre) economic figures are to be believed, attendance across the industry continues to climb, with the average weekly attendance hitting 283,511 people per week in 2015. This figure was announced with glee at last week’s Olivier Awards ceremony in which the audience applauded the fact that last year more people attended West End theatre than they did Premiership Football. Make of that comparison what you will.

In ordinary economics, this would push up ticket prices.It’s obviously too early to consider the figures for 2016, but I can’t help think that this “spring lull” will certainly have a knock-on effect later down the line, as the market simply does not have enough seats to offer the demand. In ordinary economics, this would push up the ticket prices, leading to greater overall attendance, but sadly that does not seem to be the case. This week three brand new shows, Mrs. Henderson PresentsHand to God and NotMoses posted early closing notices, showing that the gap in the markets is not driving audience to new productions, quite the opposite.

Debating this issue, some seem to think that this margin doesn’t actually change the wider economics of the industry as less choice invariably leads to people flocking to other shows that are available, rather than not attend all together. Whilst this may be the case for tourists considering their “check-box” theatre trip in which they are faced with deciding between shows such as The Lion King, Phantom or Mamma Mia!, I can’t help feel that the more casual theatregoer, and indeed the one that is a long-term asset to the industry, would just rather not bother, and given the lack of choice, save their £60 a head and go out for dinner.

London relies heavily on the tourist market, and quite rightly, as their presence is lifeblood for the aforementioned shows, which have their own “brand” and transcend language and culture and are as part of the furniture as a trip to Madame Tussauds. Commercially, I believe there is a huge over-reliance on this market within the theatre industry, and this year is likely to test that to the extreme. Whilst visitors to London, either first timers or returnees, can always find a production that suits their needs, the average non-traditional theatregoer from London or the home counties feels the brunt of less shows on offer, a fact that runs both ways.

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Following the atrocities in Paris last November, tourism in London, and Europe in general, took a hit. Search terms across London hotels, attractions and shows were significantly down, and commercial takings on West End theatre took a dive. Whilst the West End doesn’t report full figures like The Broadway League, you don’t have to look too far to hear producers and ticket agents talking about the aftermath in a negative light. Ticketing tends to “bounce” following such attacks with a knee-jerk reaction, but the climb to the busier Christmas months certainly helped shows recover on the whole. Despite this, there’s a definite feeling that we’re merely tap dancing on a volcano.

The attacks in Brussels once again had a similar economic hit on tourism — and the theatre industry felt it hard. In the short-term, these bounces seem quite insignificant when looking at the wider context, and the resilient nature of tourists in general — the aftermath of both the 7/7 bombings in London and, of course, 9/11 in New York — have provided the industry with historical data that shows its ability to bounce back.

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With short-term tourism proving to be a volatile market and the outlook throughout the summer somewhat bleak, the industry must rally to capture the wider London and UK market of “casual theatregoers” who will become the lifeblood of the industry if tourists continue to stay away. Having so many theatres dark at once and thousands of empty seats, the commercial West End for whatever reason picked a bad time to “go dark.”

We’re tap dancing on a volcano.Whilst London will forever remain a tourist attraction, the West End will continue to cater to and benefit from that market. Producers need to look beyond that however and not rely on the numbers of Americans heading to the capital, racing to shows such as The Book of Mormon, Kinky Boots (and soon to be Hamilton) that are much cheaper and easier to see than in New York, and instead focus on attracting a different type of theatregoer. Whether through passport schemes, cheaper tickets, loyalty points or just simply responding to what the people want to see, it is this market that will be the lifeblood of the industry for the immediate future and counterbalance the economics of terror.

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