Theatre Market

Earl of Glasgow Excerpts

Tuesday 11th June 2019 Lords Chamber

Asked by

[The Earl of Glasgow]

To ask Her Majesty’s Government what assessment they have made of the operation of the theatre market in (1) London, and (2) elsewhere in the United Kingdom; and what steps they are taking to ensure that theatre is accessible to as wide an audience as possible.

[The Earl of Glasgow (LD)]

My Lords, several of the Liberal Democrats think it is high time we had a debate on the state of British theatre, particularly the London theatre, which attracts millions of tourists from all over the world. London is now generally accepted as being the theatrical mecca of the English-speaking world.

I will start with the good news. London theatre is booming. In fact, some say it has never been in a healthier state. Theatres are not going dark any more, smaller theatre venues are opening all over the city and many of the popular shows, some of which have been running for more than 30 years, are still sold out every night, and certainly at weekends. More and more actors and performers are being presented with their opportunity to shine. If you still do not know who the murderer in “The Mousetrap” is, you have another year or so to find out. That is the good news.

Now I will turn to the bad news, which is what concerns many of us. Ticket prices have been rising sharply, considerably more than inflation, and are still rising. I am talking mainly about the prices for relatively good seats. It is getting more and more difficult for the average British theatregoer to afford an evening in the West End, and almost impossible if he or she hopes to bring the family.

In his speech at the Olivier Awards earlier this year, Kenny Wax, the chairman of SOLT—the Society of London Theatre—praised the London theatre’s successes, then added that the theatre should not be for only “those with means”. He said that, in his opinion, we need to,

“take a good, hard look at ticket pricing across the West End … We cannot get away from the fact that the average cost of a top-price ticket has risen steeply in the past few years”.

In an unconvincing attempt to justify these excessive prices, some theatre owners argue that it is only the top prices that have gone up. The cheaper and average-priced seats, they say, have risen only in line with inflation. In fact, the so-called high-priced seats now constitute half the seats in the theatre: the ones where you have a chance of seeing all the action and hearing all the lines—in fact, the ones most of us want to sit in. No doubt if you are prepared to sit in the back row of the stalls behind a pillar, you might find that this year will be no more expensive than last year.

As regular theatregoers among your Lordships will have noticed, the cost of theatre seats has risen dramatically. Since the musical “Hamilton” arrived in London from New York two years ago, the cost of a seat for a musical has made a huge jump. In 2015, no theatrical production, not even the most extravagant musical, would cost more than £100 for a good seat. Now the average price is about £150 and most cost more than that. The only justification for these prices is that there are still people prepared to pay them, mostly tourists who do not know any better. To be fair to the theatre owners, many provide discounted tickets for certain shows on certain days and you can usually get a cheaper seat if you arrive on the night and queue up. But, for a number of reasons, that may not suit all of us.

Once you start delving into the murky world of London theatre production you find yourself with a hundred different questions that are never satisfactorily answered. The way productions are costed is very complicated and some say it is in the interest of the theatre world to keep it complicated. But one thing is clear: those who benefit most from a successful play or musical are not so much the producers, who have taken all the initial risks, but the theatre owners and the agents who sell the tickets for them. In the present climate there is a glut of producers looking for a suitable venue in the West End to put on their show. This has put the theatres in a very strong, commanding position. The theatres have all the necessary licences and they collect all the money. Although the ticket prices are usually decided and agreed by both parties, the production company must pay its contracted rent whether or not the show is a success. The theatre owners then have the whip hand.

For the past 10 years or so, theatre owners have been employing a system called “dynamic pricing”. For those who do not know what that is, it is the same system commonly used by the hotel and travel trade. Costs vary depending on demand. If your hotel or flight is busy, costs go up; if quieter, prices drop. Apparently this works well in the hotel and travel business, but in the theatre business it is really just an excuse to put prices up. After all, theatre productions do not need any special system to drop their prices. Some musicals have been running in London for many years—“The Phantom of the Opera”, “Les Misérables”, “Wicked” and “The Book of Mormon”, for instance—and there is no sign of them lowering their prices, although they will have recouped their initial investment years ago.

Of the 45 or so main commercial theatres in London, nearly three-quarters are owned by four companies only: ATG, Delfont Mackintosh, the Really Useful Theatre Company and Nimax. Between them, they dominate the commercial theatre scene in what, in practice, has become a near-monopoly.

The Bridge Theatre, beside Tower Bridge, which first opened two years ago, is among a few independent theatres in London. It produces its own shows, as well as presenting them in its own venue, but unlike the National Theatre it gets no government subsidy. It is truly independent, run by Nicholas Hytner and Nick Starr, and while aiming, of course, to be profitable, it puts on new and classical works while keeping its ticket prices as low as possible. It is important for all of us who love the theatre that its policy proves successful.

The other main reason that prices have gone so high in the commercial theatre lies in the process of ticketing and ticket selling. The companies that sell the tickets, mostly online and often franchised by the theatres, are able to take bigger and bigger commissions, and often add a booking fee on top of that. This is an area that needs much more transparency. How much of the money you pay for your ticket goes on production costs, how much of it goes to the theatre, how much on VAT, how much on the restoration fee to keep the theatre maintained and how much on commissions to the ticket sellers? Companies working in the secondary market buy up tickets for popular shows, or those sold out at the box office, and re-sell them on the internet at exorbitant prices to wealthy people desperate for a seat. Some of them are no more than computer-literate touts, and efforts are presently being made by government agencies and some of the theatres themselves—Delfont Mackintosh in particular—to frustrate these practices.

Some of your Lordships may feel that the whole issue of rising prices for West End theatre tickets is no business of the Government, but merely the healthy working of supply and demand—the free market. However, if you care about the international reputation of the London theatre, and feel that families of modest means should be encouraged—as well as able—to afford the popular shows in the West End, or you are concerned that too much of your precious ticket money is ending up in the hands of the wrong people, you will agree that it is the Government’s job to step in and impose regulations on the excesses of the theatre world. The first step is to demand more transparency, so that we can see what is actually going on. I have been trying to achieve this for two years, but am still working mostly in the dark.