The price of theatre tickets has long been a moveable feast - while producers, of course, set what are effectively “guide prices” for their box offices to sell tickets at (and build their official investors’ recoupment schedules out of), everyone knows that the theatre has followed the lead of the airline industry in following a policy of flexible pricing, which basically means getting what the market will pay, whether that is the full box office price (or even a premium beyond it, with selected seats increasingly held back, as they are at every Broadway show nowadays, for sale at a higher rate that may include a free programme and hospitality drink before the show), or a substantial discount below it, from the half price booth or mail-out offers.
Indeed, some tickets are even given away, partly in an effort to build audience word-of-mouth from within (you’re not going to get people talking about a show unless they’re actually seeing it), but also to create a greater sense of occasion for those who have actually paid to be there.
Indeed, Nancy Whitaker - who has imported the splendid Play-by-Play seat-filling and audience development scheme from New York to London - recently told me that an empty seat has a negative value, rather than a nil one, since it creates a perception amongst those who have devoted their evening (and money) to it that they’re seeing a less-than-popular show.
But whichever way a show is priced, great chunks of the revenue earned is never actually seen by a show’s producer. Theatre owners will keep booking fees, of course, and “restoration” charges (even when there is scant evidence for anything of the kind being done) - and the government, too, immediately takes 17.5% in VAT.
When VAT was first introduced on theatre tickets in this way, there was a sustained and vocal campaign to have it removed - as Peter Lathan noted in an entry posted on his British Theatre Guide website in 2000, “The ridiculous thing is, books are zero-rated - that is, publishers do not have to charge VAT on top of the book’s price - so if you buy a copy of a play, you don’t pay tax, but if you go to see a play (which is, after all, what plays are for!), you do. Whilst logic and common sense have never been the forte of politicians, this seems particularly silly.”
But if we’re stuck with it, what’s going to happen from Monday, when Alistair Daring, the Chancellor the Exchequer, introduces a temporary cut of VAT rates to 15%, for a period of 13 months? Will theatre owners and producers pass the 2.5% saving onto consumers - or merely absorb the extra revenue for themselves?
One producer has already gained the publicity advantage - yesterday, David Ian announced that his production of Grease at the Piccadilly Theatre will introduce a new price scale to reflect it. In a press statement, he commented, “The reduction in the rate of VAT will of course be passed on in full from next Monday [Dec.1] - in fact we will be rounding our prices down to the nearest logical price-break.” Box office prices, previously scaled from £20 to £55, will now be re-priced from £19.50 to £53.50, representing savings of between 50p and £1.50 per ticket. The middle range of prices from £30-£45 will each see the prices reduced by £1.
It will certainly be interesting to see who follows suit. But these savings are hardly the sort that will encourage a wholesale return to buying tickets for West End shows. As supply of theatre tickets almost invariably far exceeds demand, except in the limited number of cases like the Donmar Warehouse where the reverse typically applies, bigger price cuts than £1.50 are going to be needed to revitalize the industry in the difficult market conditions ahead.
12.30PM UPDATE: A further announcement has now been issued that Mamma Mia!, Joseph and the Amazing Technicolor Dreamcoat and The Sound of Music are also reducing their ticket prices from Monday.
Curious that Grease, Mamma Mia, Joseph and Sound of Music are routinely discounted at the half price booth and so the credit-crunched theatregoer shouldn't have to pay full price anyway!
I smell a press stunt!
The biggest crime of course is that there is still VAT on children's theatre tickets, when children's books, clothes, food and god knows what-else is either zero rated or non-vatable.
The pennies in savings made in a 2 1/2% reduction on a £10 ticket is far outweighed by the costs in administering it at Box Office, theatre and production office.
What a farce!
Come on Gordon and Alistair do it properly: scrap VAT on all kids theatre tickets - including pantos! And do it now!
JC
By the way - thanks for the discount in fuel VAT which has been outweighed by the rise in diesel duty. ie a rise in fuel costs for touring theatre companies. You can tell it's panto season!
I understand VAT is levied on delivered goods and services. If I bought tickets in August 2008 for a show that is being delivered to me in January 2009 do I get a VAT refund from the promoter?