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How to Succeed in Show Business

Professor Jeffrey Simonoff finds that winning a major Tony Award

The patterns they discovered suggest that ... the type of show (e.g., musical or play), the timing of its opening and the first week’s box office receipts are key factors to its longevity.

While it is well known that along with the glamor of producing a Broadway show comes the distinct possibility of losing buckets of money, the challenge of determining just which factors can prevent that outcome is perhaps the longest-running plot line of all. New research by NYU Stern Professor Jeffrey S. Simonoff into which factors influence the longevity of Broadway productions offers some clues.
 
In “Survival of Broadway Shows: An empirical investigation of recent trends,” Professor Simonoff, former PhD student Nikolay Kulmatitskiy, Stern alumnus Lan Ma Nygren (PhD ’03), Kjell Nygren and Jing Cao, formerly of NYU’s Courant Institute of Mathematical Sciences, analyzed pre- and post-Tony Award data on 222 Broadway productions that opened between 2000 and 2009.  They specifically sought to eliminate any distortion due to both the time of year shows debuted – that is, before, during, or after Tony award season – and limited run length, adjusting their analysis to correct for these factors.
 
The patterns they discovered suggest that, along with the obvious, very powerful boost afforded by Tony awards, the type of show (e.g., musical or play), the timing of its opening and the first week’s box office receipts are key factors to its longevity.  Reviews generally mattered little (although those in the New York Daily News counted more than those in The New York Times).
 
Among other findings: Musicals typically survived longer than non-musicals, perhaps a function of the greater sunk costs that investors seek to recoup. Revivals’ risk of failure was nearly twice that of an otherwise identical non-revival. The first week’s attendance rate lowered the show’s risk of failure at any point during its run, reflecting that initial customer reaction to a show is directly related to the show’s success. And actual awards counted more than nominations in extending a production’s run.
 
Macroeconomic factors such as unemployment levels and a higher prime rate – as well as the current competition for theater space – appeared to influence a producer’s decision to lower the final curtain mainly in the post-awards season. Further, the Tony awards event affected producers’ decisions more strongly in the months just preceding and following the ceremony than in any other timeframe.