Broadway Musicals are Now Bigger Business Than Ever, and Venture Capitalists Should Take Notice


Musicals are big money — as some of you may or may not have already deduced. And with the present state of the film industry, which is wrought with unstable ticket sales mixed with a stagnant creative ecosystem (see Steven Soderbergh’s recent rant for a professional industry opinion), more producers are flocking to the bright lights of Broadway to manifest their brands — a surprising shift to analogue in the digital age, according to a recent Economist article.

Many investors view the musicals’ ‘game’ as similar to venture capital — “you can’t make a living, but you can make a killing.” Considering that the costs are lower, and the shows can run for as long as there is demand, it’s easier to digest the big numbers some of the major brands pull in — “The Phantom of the Opera” has grossed $5.6 billion on the stage since its London debut 27 years ago, more than any film or television show. Even superproducer David Geffen — who most recently produced “The Book of Mormon” — has made more money from the musical ‘Cats’ than any of his hit films.

This year, musicals will generate $1.9 billion in revenue — a relatively small market belying an ecosystem where the top dogs get to eat a ton. Major media companies will typically try to cross-pollinate existing brands to the Broadway format, and of the four Tony nominees for Best Musical this year, three are based on pre-existing stories — ‘A Christmas Story,’ ‘Bring It On,’ and ‘Matilda.’

Recognizable brands transitioning to musicals in the near future include ‘Rocky’ and ‘Charlie and the Chocolate Factory.’

If you were to ask me to invest in either a Broadway musical or a new iPhone app, I’d probably choose the musical — unlike the app, theatre’s platform will still be around 10 years from now, and you’d have a better chance of scoring a memorable brand with a musical — and subsequently transitioning to apps, TV shows, movies — then with an app. I’m not counting out an ‘Angry Birds’ movie, but something tells me it will be a while before we see any character’s from mobile apps have a significant cultural impact.