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Broadway Musicals Economics

By Jeff Brabec and Todd Brabec
November 02, 2014

Being an investor, producer or creator involved in a Broadway musical ' whether a new show with original music and lyrics, a “catalogue/jukebox” musical using pre-existing songs or a revival ' may yield enormous amounts of money, both short term and long term, if the show is a hit, but can result in enormous financial losses if it fails to attract an audience.

The difference in why a show makes it or doesn't often isn't always about the quality of the material, reviews or the cast (although they have to be there), but the costs of operating the musical on a weekly basis. Even with significant weekly box-office ticket receipts ( e.g. , $500,000 to over $1 million), a sustainable hit depends on the difference between the box office income and the costs of the musical. If the costs are greater than the income or if the income barely exceeds the costs, the musical is on its way to closure.

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