Business Overview

While motion pictures and television dominate much of the American entertainment industry, millions of people still enjoy live theatrical productions. Broadway alone attracted 13.27 million people in 2016-2017.

Theatre companies present plays and theatrical productions for live audiences. Some companies offer shows only at a specific theatre, which the company may own. Other companies tour to different theatres, putting on performances in many cities.

Who is this business right for?

Anyone who is passionate about theatre but also has a strong business mind may be well-suited for running a theatre company. A love for theatre is necessary because starting a theatre company is hard work and frequently doesn’t return a profit for several years. Being well-versed in running a business helps keep a company financially viable.

What happens during a typical day at a theatre company?

Running a theatre company involves a lot of work, including:

  • booking tours
  • marketing shows
  • raising funds and finding donors
  • scheduling and running rehearsals
  • creating props
  • getting press exposure
  • actually putting on performances

Because there is so much to do, it is helpful to divide roles up among a theatre company’s members.

What is the target market?

A theatre company’s ideal customer is someone who enjoys live productions and has discretionary income. Such a person will be interested in seeing plays, and they’ll be able to afford to go to several shows each season.

While ticket sales usually account for just a portion of a theatre company’s revenue, the number of tickets sold may affect a theatre company’s ability to raise funding through other means. Therefore, getting people to pay for tickets is important even if a theatre relies on other funding.

How does a theatre company make money?

Most theatre companies have several streams of revenue. These frequently include:

  • ticket sales
  • donations from benefactors
  • grants from government and nonprofit organizations
  • merchandise sales

From 1990 through 2004, the National Endowment for the Arts reports that most nonprofit theatres received between $200,000 and $400,000 annually in contributions. Because it’s much more difficult to get donations and grants as a for-profit business, the majority of theatre companies are registered 501(c)3 nonprofits.

What is the growth potential for a theatre company?

How a theatre company grows depends on its business model.

Theatre companies that have a building to host performances in grow by adding more shows and bringing in more touring groups. For example, The Theater Company had six different shows in 2017, and each performance had its own cast and crew.

Touring theatre companies that don’t have a building grow by booking more performances and larger venues. They might start in small venues that hold 100 people or less, and then eventually be able to book major performance spaces almost every weekend.