Broadway theaters are finally offering refundable tickets. But for how long?

·6 min read

Here’s a COVID-19 recovery policy I hope sticks around: tickets that are both changeable and refundable.

As anyone who has bought a theater (or a concert) ticket well knows, the industry long has balked at returning anyone’s money, even in extreme situations. That means most people who go to live entertainment have, at some point in their lives, been forced to eat the cost of an unusable ducat. Or four.

But if you look at the all-new ticketing policies from Broadway producers, you’ll see a much more generous point of view going forward. For example, the Nederlander Organization, which hosts many Broadway shows and also owns Broadway in Chicago, updated its policy in recent days to permit exchanges and refunds at its theaters, even up to just a couple hours before curtain time.

Now the language is written in such a way as to permit refund and exchange “requests” (with the seller granting or not granting them at its discretion) rather than offering up a new entitlement. The Nederlanders have good lawyers. And that doesn’t mean you can buy “Hamilton” on a Tuesday night and switch to Saturday without paying the difference. But it’s still a huge improvement.

Disney is doing much the same: right now, if you buy tickets for the fall for either “The Lion King” or “Aladdin,” you can exchange your tickets without any fee. Once “Frozen” arrives in Chicago this fall, I’d expect the same policy to be in place. If your kid is sick, you’ll be able to switch your outing to the following week. What’s not to love about that?

These companies are following the lead of airlines, which also have mostly gotten rid of change fees in recent months, albeit with a growing number of exceptions for their cheapest tickets. As with theaters, the airlines have recognized that people want the security of being able to change their minds, given the continued uncertainty of the recovery landscape and the ever-changing nature of government regulations.

The big question in both industries, of course, will be whether or not this policy will stick around for the long term. On the one hand, tickets are what economists call a “wholly perishable good,” meaning they are worthless one minute after the curtain goes up. And anyone who has studied audience behavior well knows that a firm financial commitment to attend makes such attendance far more likely. Producers have the data to know that allowing too much change and cancellation will suck away a good proportion of their precious revenue.

That said, ticket prices now are politically charged, especially within the theater industry.

As a look at Twitter reveals, some radicalized theater workers see affordable tickets as an essential part of their desired reforms. And, indeed, high ticket prices to hit shows have inarguably limited who can afford to attend, notwithstanding many efforts to offer at least some affordable seats at some shows, and to work with customers seeking exchanges on a case-by-case basis.

In the pre-COVID era, producers of shows like “Hamilton” made the Robin Hood argument that high peak-pricing aimed at the well-to-do could be used to make other tickets either lower priced or available for free to school groups. They also argued that anytime a producer keeps a ticket price lower than actual demand would sustain, the inevitable result is a bonanza for the so-called secondary market, which then scoops up those tickets for resale, causing massive irritation on all sides.

The producers’ theory, which is persuasive, is that it makes more sense for that money to go to the industry itself, which at least invests in artists and productions and loses money on most shows, rather than to people who are not much different from house flippers. That way, there is more to share with the creatives responsible for a hit show, as has indeed happened at “Hamilton” and elsewhere. If potential revenue is choked off, it becomes harder for unions to bargain for increased support for their members.

But the nuances of supply and demand aren’t exactly well understood or appreciated right now. Nor is the relationship between revenue and compensation. This is especially sensitive with nonprofit theaters who claim to be mission based but still need to make money at the box office. These theaters right now are worrying far more about their image with their internal constituencies than their own bottom lines.

That’s because a large proportion of especially younger arts workers have lost trust in all of the above.

It’s fair to say that a portion of the protesters would like to see the Broadway League, or maybe the government, put a hard ceiling on ticket prices, abandoning the concept of premium pricing, now seen not as a marker of success but as a poster child for elitism (not a problem shared by most luxury brands). But in order to cap prices effectively, you’d also have to stop the secondary market from doing its thing. That means the government would have to get more involved with a broad swath of the arts economy.

As with so many things these days, this issue pits sincere socialists against market pragmatists. Most of the people in charge of commercial theater (and some nonprofits) are trying to appear open to the former without abandoning their core belief in at least some elements of the latter, as applied to live entertainment. It will be fascinating to see how it all plays out. The people who work for theaters are very different from those who work for airlines, with the latter far more willing to see the connection between revenue and their paychecks.

Then again, you’ve got the issue of all those absurdly high salaries at the top. To rebuild that trust, producers will need to pay and treat their mostly union workers better if they find themselves with a boom this fall, as I think they will. But if you don’t believe in this system at all, as many younger arts people now don’t, then even that maybe won’t change your view. It’s all very complicated. And potentially self-destructive.

But I say a significant broadening of ticket refundability and changeability is a family-friendly issue upon which both sides can agree. Many of the issues faced by the theater are internal matters that are choking off sufficient consideration of the needs of the audience, who are stakeholders, too.

But letting people change their mind when they run into personal trouble is just good customer service, no different from the generous return policy at Amazon, which is not there for altruistic reasons, believe me.

And it has the additional benefit of being the right thing to do.

We’ll talk about fee creep another time. That one really should involve the government.

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