Broadway’s Billion-Dollar Problem: Strikes, Prices, and a Tech Reckoning

Broadway's billion dollar problem Strikes, prices and a tech reckoning. According to the Times, Broadway could soon face its first major strike in nearly 20 years. Unions representing actors, stage managers and musicians are threatening walkouts as talks with producers stall over pay and health care. Equity says record box office profits could mean better benefits. Producers argue the industry is fragile. Post pandemic musicals are failing faster than ever. That's an understatement. They're all failing. But the real drama isn't just backstage. It's at the box office. The average Broadway ticket now costs over $130, nearly three times higher than the earlier 2000s average of about $45. That's roughly 190% above inflation, while median US household income rose only 60% in the same time for hit shows like Hamilton, the Lion King and Harry Potter and the Cursed Child. Premium seats have topped 1 to $2,000 on resale markets, pricing out all but the top 1%. And even if AI can't replace Lin Manuel Miranda, it's already reshaping theater, lighting and set design. Broadway's next act might not be artistic. It could be digital. What's the real message here? The folks running Broadway and the unions that organize Broadway need to look what's happening out west in California with the writers strike, we are seeing more and more Hollywood go under and die and become unfunded. The same thing could happen to Broadway. Look, I'm in favor of unions. Unions have done a lot of great things to create a middle class in America. But when it's pushing up prices to sometimes $1,000 a ticket, it means not 99% of Americans can never see a Broadway show. It means 99.9%. It's going to be left at the top point. Something weird and wrong about that. Let's dig a little bit deeper here in this Broadway situation. It is true that it's not exactly like a Hollywood movie replacing Scarlett Johansson with an AI actress, which could be done for a final version of a movie. People are used to watching a movie on a screen. People go to Broadway because they want to experience live acting. They want to see real three dimensional people. So I don't think we're just going to in the next five years see people paying 90 bucks to go see holograms or AI created images on a screen or on a stage because if they wanted that, they would just stay at home and watch on a TV or a phone. So I don't think that's the way. But I do think that Broadway is ripe for disruption. Because the numbers can't keep going. We've already seen many craftsmen, craftswomen in Hollywood run out of town because producers of movies are going to less expensive places. Now, you can make a movie anywhere in the world. You cannot make a Broadway show anywhere in the world. If it's a Broadway show, it has to literally be on Broadway in New York City or something like that. The touring Broadway shows, which has to be similar. So it's heavily unionized. And again, I respect the fact that we have a middle class in America largely because of the role of unions. But it does add massive, massive amounts of expense to a Broadway show. The old cliche of, you know, someone piece of paper falls on the stage, an actor bends down to pick it up before the show, they broke in union rules and are fined. A lot of that is based in reality because everything is so highly unionized and segmented. And this is why, you see, frankly, one of the reasons, not the only reason, but one of the reasons why a show like the Stephen Colbert show, the late night show on CBS, has 200 staffers and a show with a much bigger audience. Joe Rogan has, I don't know what he has a dozen. Because if you're starting from scratch with someone saying, how can we create this the most efficient way possible? You can sometimes make things 50, 80, 90, 95% more cost effective. I feel sorry for anyone who's made a career out of managing stages or building stages. I don't want to see you unemployed. But the cost, it's in fact, the cost of living in New York City is more expensive than ever. It's certainly one of the most, if not the most expensive place to live in New York City. So if you're 55 years old and you're experienced craftsman, you're not going to be able to live on $50,000 a year. You really do need a couple hundred thousand dollars a year. And that is what some people on Broadway are making if they're in a unionized job and they have a lot of protection and seniority. I just don't know if the marketplace is going to sustain that. Here's one thing I do predict. They won't call it Broadway at first, but at some point, some producers are going to do shows in other cities that are just like Broadway shows. And they're going to have a couple of stars, maybe TV stars, maybe reality TV stars, maybe Rosie o'. Donnell. They're going to have a couple of stars, real people. They'll have a cast of two or three real people, one or two with real name id, and they're going to have synthetic music, they're not going to have real musicians. And they're going to have other AI generated actors on stage, whether it will be on a green screen or the chorus or the background players. They're going to have some kind of digitized actors who from the audience will look the same. And you're going to see shows that maybe they won't call themselves Broadway shows for legal reasons, but they're going to have the look and feel of a Broadway show without the huge, huge cast, without the live musicians. Is it going to offend some people? Yes. Are there some people who will say, I'll never do that? Yeah. But to millions of middle class Americans who in the past loved going to Broadway and feel priced out, I think it's going to be a viable option. And we are going to see disruption in this industry the same way we've seen disruption in Hollywood, the same way broadcast television has been disrupted, the same way cable has been disrupted. You can't stop technology. As Gary Vaynerchuk and others have said, technology's undefeated. It wins overtime. Will there always be some shows done at the whole giant scale that we currently have? Yes. But as we talked about on this show recently, basically every new Broadway musical that's launched in the last year has failed. You simply can't expect investors to keep piling in if the cost structure is such that it is impossible to make money. Because as much as you love acting, if you're an actor or a musician, somebody's got to put up the money and they're going to stop doing it if it's essentially a guarantee that they can't make money.