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

Theatre is necessarily a minority activity: even in London’s five largest theatres – the London Coliseum, London Palladium, Royal Opera House, Theatre Royal Drury Lane and the Dominion – just 2,358, 2,286, 2,256, 2,196 and 2,069 people will be able to watch each performance respectively.

Other commercial West End venues range in size from 432 seats (the Fortune) to 1,500 (the Adelphi), but many important London theatres are much smaller: the Royal Court’s Theatre Upstairs (90 seats), Donmar (251 seats) and Almeida (325 seats) are three of the most high-profile producing venues in London, while the influential and unfunded fringe theatre the Finborough has just 50 seats.

By contrast, Wembley Stadium has 90,000 seats; Wimbledon Centre Court has 15,000.

No wonder that one of the most frequent frustrations for regular theatregoers is just getting in. Being a critic also no longer guarantees access, as witness the recent ticket-by-lottery schemes for the Tom Hiddleston Hamlet at RADA’s 160-seat Jerwood Vanbrugh Theatre or Punchdrunk’s new peripatetic Kabeiroi.

However, some well-heeled audiences are able to increase their chances of securing tickets by becoming high-level donors. The Guardian’s Alex Needham recently reported that 170 of the 864 tickets – or about 20% of the total – available for Kabeiroi went to people giving Punchdrunk at least £250 a year.

The National and Donmar have a sliding scale of memberships from £75 (Donmar) or £80 (NT) to £12,000 (both). At one end, these may simply give access to priority booking; at the other, a personal booking service, with the best seats held back for patrons (at the NT), or opportunities to host private events for up to 20 people (at the Donmar).

These are money generators for the theatres, but also a way of tapping into bigger support. Time was when people just joined the NT or Donmar mailing lists for a small annual subscription; now, they’re classed and graded, like a reinforcement of Britain’s ongoing preoccupation with social class.

But this isn’t just a modern version of the separate entrances some London theatres used to have for the lower orders hiking up to the remote galleries. Rather, it’s a way of regulating supply and demand, and monetising the audience at the same time. Given that many of the theatres charging for these subscriptions are publicly funded organisations, which each of us have helped pay for through our taxes, it is also another form of super-tax.

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.

Producers try to salve their consciences about maintaining accessibility through lottery schemes for a limited number of day-of-sale seats, but ultimately theatre tickets for sought-after shows are like luxury items: not everyone can have one and some people are inevitably going to be disappointed. But as ever, it is the wealthy who have a disproportionate access to acquire them: some theatre becomes in this model, as the New York Times put it: “One more exclusive preserve for the ultra-rich.”

Of course, the reality is that there’s a lot more theatre that doesn’t require its participants to enter with a heady sense of privilege.

As Thomas Schumacher, president of Disney Theatrical Group, told the New York Times: “If you’re a regular person who wants to see a Broadway show tonight, you can. There are tickets for $29. You may be priced out of the best seats at the hottest shows, but the same is true of a deluxe suite at the St Regis or a restaurant on New Year’s Day.”