Mark Shenton: Why is my theatre ticket so expensive? It’s the economics, stupid | The Stage

Of course, market forces dictate this. We see it most keenly on Broadway, where dynamic pricing is king and popular shows regularly earn more at the box office than their own potential grosses. This is because so many tickets are sold at premiums way above the ‘regular’ top prices. These have reached $748 for the Bette Midler Hello, Dolly! and $849 for Hamilton.

In a recent feature in the New York Times, Robert Phillips, an executive from Uber, which has brought dynamic pricing to cab journeys, provided a quick economics lesson. “At the most basic level, all pricing is about allocating scarce resources,” he said.

Citing theatre tickets, he added: “This is simply a rationing problem. If you keep prices low, people will buy tickets and resell them on the secondary market. Someone is going to pay a market-clearing price, no matter how high. The only question is: who should get the money? The investors and performers and creators, or a speculator who managed to snap up the tickets the moment the box office opened?”

Premium prices though the box office mean the additional revenue goes to the production; it also drives up the secondary market tickets even higher. But unlike cinema, where a multiplex can simply turn over another of its screens to show a popular title again and again throughout the day, theatres have fixed inventories and (typically) eight-show-a-week schedules that can’t be increased to match demand.

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Mark Shenton: Why is my theatre ticket so expensive? It’s the economics, stupid | Opinion | The Stage.