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331 lines
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finance
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newsbysector
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retailandconsumer
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7604697
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# Thank you for the music, the tills are ringing - London theatre shows the
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way to profit
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## I got life. I got million-dollar charm." So sings the cast of Hair, the
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peace-and-love musical that opened in London's West End last week to rave
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reviews.
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![Will Swenson surrounded by other members of the cast of Hair at the Gielgud
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Theatre in London
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][1]
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Will Swenson surrounded by other members of the cast of Hair at the Gielgud
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Theatre in London Photo: Alastair Muir
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By Roland Gribben 9:05PM BST 18 Apr 2010
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[Comments][2]
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The exuberance displayed by _Hair_'s hippies appears to be in strong supply in
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London's theatreland right now. Musical theatre is booming. Its rude health
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would give no hint that the UK is emerging from a crippling recession.
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The West End is no stranger to boom or nearly bust, but the current mood is
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almost euphoric. Last year box office revenues topped £500m for the first
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time, an increase of 7.6pc on the previous year's level. Audience totals hit a
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new record of 14.2m, up 5.5pc with musicals accounting for almost £329m of the
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revenue stream and 8.6m customers. Box office receipts have continued to grow
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at around 8pc in the first four months this year.
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Further, a strong pipeline of new plays and musicals should be providing
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theatres with healthy returns and the opportunity to increase the pace of
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investment to give more of theatreland an overdue facelift.
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So why is this area of the economy doing so well? What is behind the current
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boom? And what are the pitfalls for the businesses that put on such shows?
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Nica Burns, president of the Society of London Theatre and head of a five-
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strong theatre chain, says that musical theatre is thriving thanks to a
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helping hand from television. A new generation of theatregoers is descending
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on the capital, their curiosity aroused by the way Lord Lloyd-Webber, the
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composer, has harnessed TV to catapult unknown singers and dancers on to the
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West End stage. Shows like _Strictly Come Dancing_ have also encouraged
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people's inner Wayne Sleep.
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## Related Articles
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* [West End musicals: the biggest hits - and misses][3]
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30 Apr 2010
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Ms Burns is making confident noises about maintaining heady growth for another
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18 months at least.
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"All these 'discovering talent' shows have caught the imagination of the
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public. It's helped make musicals particularly exciting. We've had a survey
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showing that 23pc of people who have come to the theatre and seen a musical
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are now in the mood to try a play."
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The Victorian settings of many West End theatres are now being done up. "We
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have just restored the front of the Apollo for the first time in 40 years.
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I've taken a sledgehammer to the ladies lavs in the Duchess. For me it's the
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year of the loo," says the bubbly Burns.
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It is also the year of consolidation. The £90m purchase of Live Nation's UK
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theatres by the Ambassador Theatre Group (ATG) gives the combined group
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considerable playing and pulling power with 39 venues in the West End and
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11,000 seats to rival the businesses headed by Sir Cameron Mackintosh and Lord
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Lloyd-Webber.
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The arrival of husband-and-wife team Rosemary Squire and Howard Panter, joint
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founders of ATG, at centre stage provides three big West End players. It also
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means that for the first time theatreland is now in the hands of producers,
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rather than landlords.
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"This is a massive development and we're waiting to see what the effects will
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be," says Nick Salmon, a veteran producer who is starting a new production
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company with two colleagues. There are others waiting, watching and
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anticipating as well.
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Sir Cameron Mackintosh, who has seven theatres and an almost magical business
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touch, likes to back winners. _Les Mise_rables, _Phantom of the Opera_, _Cats_
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and a host of other musicals have produced a steady stream of earnings and
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given him a fortune estimated at up to £650m.
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His company, Cameron Mackintosh Ltd, achieved a near 20pc increase in turnover
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in the year to end March last year to £32.3m and a 65pc leap in pre-tax
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profits to £23.1m while keeping a handy £87.4m cash pile.
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Lord Lloyd-Webber, said to be ahead in the rich stakes with a paper value of
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£750m, has demonstrated his marketing as well as musical ability through his
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auditioning programme to "discover" unknowns over the past two years. He is at
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it again with a carefully staged TV extravaganza to promote next year's big
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musical event, an adaptation of the _Wizard of Oz_, by "finding" Dorothy - and
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her dog. (However, his master company, The Really Useful Group Holdings, saw
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pre-tax profits slide from a disposal-inflated £73.1 to £9.4m).
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There are pitfalls. A shortage of suitable theatres rather than playhouses
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limits the settings for the big musical and there is always the risk of a
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flop. _Gone With T_he Wind failed to take off after costing £4.75m. Imagine
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This was another casualty, but neither has reached the £30m associated with
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putting Bono's _Spider-Man_ musical fantasy on Broadway, a show which has been
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years in development but is yet to open.
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Fast-forward 18 months and the scene might be less cosy. The expected cuts in
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Government spending on the arts will have a knock-on effect on the commercial
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theatre that Burns feels will be damaging. The subsidised theatre has funding
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to nurture costly productions before they are transferred to the commercial
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stage. Jerusalem, for example, was commissioned in 2002 at the Royal Court and
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made its debut seven years later.
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"We would be foolish not to expect cuts and everyone will have to tighten
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their belts," says Burns. "We should look to cut the costs of administration.
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Where are the regional theatres going to get the money?"
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The Arts Council is bringing down the curtain on a £1.6bn investment
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programme. It has set a new support framework for the National Theatre, the
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Royal Opera House and other institutions taking £5m a year from the public
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purse and urging local authorities to fill the gap. Some hope.
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[Tweet][8]
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http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/7604697
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/Thank-you-for-the-music-the-tills-are-ringing-London-theatre-shows-the-way-
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to-profit.html
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Telegraph
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## [Retail and Consumer][9]
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* ### [Finance »][10]
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In finance
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][14]
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[![][15] ][16]
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Share:
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* [Tweet][8]
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![][20]
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Please enable JavaScript to view the [comments powered by Disqus.][21] [blog
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1. [What happens when Greece defaults][29]
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2. [Dominique Strauss-Kahn: IMF head 'hired prostitutes from Manhattan
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