Over the past year, I've become more and more involved commercially in live theatre, focusing on London in particular. I've been surprised to find more similarities in the two businesses than expected.
In tech (and specifically venture capital), it's widely acknowledged that the success lies in the outliers; in other words, the majority of the companies will either fail or not reach an outsized outcome, but a small handful will be so successful that they will return the entire fund on their own.
I've seen the same to be true in theatre. Investing in live theatre, particularly with the current set of macroeconomic factors, is a risky asset class. That said, all you need to do is look at a list of the highest grossing musicals to see that large outcomes are very possible.
Similar to the technology sector, investments take time to mature. None of the shows in the list above went from idea to opening night quickly; instead, it's a constant process of iteration to improve the material before they land on something that really works.
One difference that I have seen is that, while the above similarities seem to be true, the financing ecosystem is significantly more mature in technology than it is in theatre. In theatre, capital is raised on a per show basis, as opposed to across a range of shows. Any diversification is at the management and discretion of individual angels, who essentially act as fund managers of one.
If you travel around London regularly, you will often see ads scattered across the London Underground. I've been told by some that these are much less effective than they used to be.
In technology, it's common to run experiments with a hypothesis in mind, and to regularly iterate and adapt your approach based on the results that you see. I think this mindset could be hugely valuable in the world of theatre, and I'm only now seeing it begin to happen in the marketing of shows.
Part of the problem here is the lack of tools available to producers to actually achieve this. I believe technology can play a large role here, in giving more power and visibility to producers on what is and isn't working for a particular production.
One caveat: it's easy for me to have this observation from a distance, but I've never marketed a show directly. Still, I do believe that thinking outside of the box when marketing shows over the next couple of years will be vital, as producers compete over a likely smaller market, while consumers find their way through the cost of living crisis going into 2023.
The power of brand
The shows that have had the most success are shows that have captured the imagination of audiences; these are the shows where members of the audience are dressing up in the costumes of certain characters in the show. If you look at the list that I shared above, some of them benefitted from the strength of existing IP; in the case of Jersey Boys or Mamma Mia, they are jukebox musicals that already had the strength of the songbook of Franki Valli and the Four Seasons and ABBA, respectively. In the case of The Lion King and Beauty and the Beast, these were Disney hits a long time before they became stage musicals, and were therefore known by their audiences.
It is not yet clear to me how to go about creating brands originating from live theatre, or whether that should even be a goal. But it has certainly happened over the past few years, with examples like Six, Dear Evan Hansen and Hamilton all creating a passionate following.
I plan to get more actively involved in the theatre industry in 2023. As always, as my thinking evolves, I'll share it here.
If you're working in the industry (be it as a producer, creative or performer), do get in touch!