Chapter 11 CASE ASSIGNMENT: Playbill

Cast in the Leading Role, Playbill Shines

Anyone who has ever attended live theater has probably, at some point, flipped through a copy of Playbill. Established in New York City in 1884 as the program of choice for Broadway and off-Broadway theaters, Playbill the company publishes and distributes the near-ubiquitous black and white program with the familiar yellow and black cover to theaters in almost every major and medium-sized city in the United States. Over 3 million theatergoers read the programs every month. Complete with cast rosters and biographies, show synopses, lists of prominent theater sponsors, insider gossip columns, and various feature articles on nationally known actors and theater personalities, Playbill provides its readers with a panoramic view of the performing arts. Playbill distributes its programs free to theaters, which, in turn, give them to show attendees as a complimentary item included with the price of their tickets. Like most magazine publishers, Playbill earns revenue simply by selling the advertising space—a lot of it—within its pages. Thanks to its broad distribution network and its wealth of proprietary and nationally oriented editorial content, Playbill is able to extend its revenue base with a mix of local, regional, and national advertisers. Although the audiences at the many performing arts centers represent a highly coveted and affluent consumer demographic, Playbill’s competition has been limited to one national and several regional program publishers. To establish itself as the lone national brand, Playbill purchased its primary rival, Stagebill, which publishes Performing Arts magazine, in 2002. Though Playbill’s purchase of Stagebill could be interpreted as a move to exert its dominance, closer inspection of the deal and the state of the industry reveals that Playbill was motivated simply by survival. Program publishers suffer from exceptionally low profit margins, and continual pressure to cut costs left Playbill with the ability to supply programs to only a select few of Stagebill’s most lucrative former customers. Though Playbill has eliminated its most serious rival, fallout from the takeover emboldened the theater owners who were left behind. Consequently, demand for locally published programs has increased. Sizable theater consortiums in major markets such as San Francisco, Chicago, Seattle, and Los Angeles now work with local publishers who afford them more editorial control over their programs’ content. To venue owners in those markets, providing locally focused news, information and personal profiles is the key to building audience support for live theater in their particular market. To help offset their publishing costs, some even assume responsibility for selling advertising space in their programs in exchange for a share of the ad revenue they generate. In addition to effectively monopolizing the national market for printed programs, Playbill has further extended its appeal to advertisers by forming the necessary business partnerships to take its product to the airwaves and into cyberspace. Recently, Playbill and Sirius Satellite Radio formed a strategic alliance to provide daily news features, live programming, music, special programming, and information from the world of Broadway for Sirius Radio’s Broadway’s Best channel. In return for the increased brand exposure, Playbill will promote Sirius in printed editions of Playbill and through Playbill On-Line, at Playbill.com. Playbill.com uses a mix of exclusive content, feature articles pulled from the printed Playbill, show schedules, and seating charts for all of Playbill’s partner theaters around the world to generate 20 million hits each month. Playbill has used the Web site to coordinate partnerships with ticket agencies, restaurants, and hotels that offer discounts to the hundreds of thousands of subscribers to Playbill On- Line’s Playbill Club. Consumers can join the club for free, and it offers tremendous exposure for Playbill’s business partners who are able to place their products or services directly in front of individuals with an average yearly income of $80,000. Clearly, Playbill is on solid ground. Nevertheless, it still faces the challenge of finding innovative ways to earn a profit from a product that doesn’t cost its end customers a single cent. Sources: Claudia Peschiutta, “Theatres Scramble to Find New Program Publisher before Fall,” Los Angeles Business Journal, July 29, 2002; Randy Gener, “Get with the (New) Program: There’s Been a Big Shakeup in a Business That Audiences Take for Granted,” American Theatre 20 (January 2003): 20; “Venerable Theater Guide Takes Its Enduring Show on the Road,” PR Week, October 14, 2002, 14; Laura Weinert, “End Program: Will Acquisition of Performing Arts by National Playbill Damage West Coast Arts Coverage?” Back Stage West, July1, 2002, 1; Leonard Jacobs, “Theatre Mag Shake-up: Playbill Buys Stagebill; Show People to Debut,” Back Stage, June 14, 2002, 2.