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