April 1, 2018
Chapter 5 (Marketing), Chapter 10 (Producers & Investors), Chapter 13 (Box Office)
While this book is not about London’s West End, we can gain insight into how ticket prices rise and how much of it ends up as profit. For example, in London, about 20% goes to cover the cost of production and 20% pays the VAT (taxes). In New York, we do not have admission taxes (see The Turkus Award in Chapter 4). Another 20% goes into marketing and promotion (as well as group sales commissions etc.). Theatre costs (including utilities, staff etc.) eats up about 7%. Royalties of all sorts can add up to 20%, leaving profits of 13% on each ticket sold at 50 pounds (L50).
Of course, L50 is dirt-cheap compared to Broadway prices, but it still represents a significant rise in West End prices. The UK has always subsidized its theater community. America does very little in comparison. Also, theater costs on Broadway can be significantly higher. So while these percentages are not exactly the same for a New York show, they do help to break down where the consumer’s money is going.