In Twist, Off Broadway Looms Larger for Hits

Any television executive knows that the big money is in reruns: Hit shows like “Seinfeld” and “Star Trek” keep raking it in long after the writers penned their last scripts. Now a group of theater producers is putting a twist on that business model, taking long-running Broadway hits and moving them Off Broadway to test if they can live on in rerun mode, where costs are lower and the profit potential is significant.

The first test case has been “Avenue Q,” a Tony Award winner for best musical. The show cost $3.5 million to mount on Broadway in 2003; an additional $4 million was spent on marketing alone in its first year. By 2009 the show wasn’t a hot seller anymore, yet “Avenue Q,” along with its potty-mouthed puppet stars, had become a brand name.

So why not capitalize on that equity, then, by moving the musical to a smaller Off Broadway house, where weekly costs would fall by two-thirds? The producers did in October 2009, and earned their entire investment back in 13 weeks. Only $700,000 was needed for marketing that first year, because like “Cheers,” everybody knew the “Avenue Q” name.

Now those producers, as well as a third partner, are trying it again. This summer they plan to revive “Rent,” another Tony winner that ran for 12 years and closed in 2008. The musical will cost $1.5 million to mount Off Broadway, about twice as much as “Avenue Q,” and will play at the same New World Stages complex on West 50th Street, one block off Broadway. The producers think audience interest in “Rent” will be big enough to fill its 499-seat theater indefinitely.

“My job is to exploit ‘Rent’ and ‘Avenue Q’ as far and wide as I can,” said Jeffrey Seller, one of the producers. “Our bet is that 4,000 people a week will still want to see these shows at $80 a seat, rather than 8,000 a week on Broadway at $120 a seat.”

Another set of producers also met with modest financial success by moving the popular cloak-and-dagger comedy “The 39 Steps” from Broadway to Off Broadway for a nine-month run, which ended last month. But not every show has had the crucial brand name: The veteran producer Barry Weissler considered making the same move for his Broadway musical “The Scottsboro Boys” this winter, but concluded that it was not well known enough to avoid an expensive marketing campaign for Off Broadway.

In these rapid-fire theatrical reruns, some producers see a rosier future for the 30 commercial Off Broadway houses, which have between 99 and 499 seats and remain a tough place to make money.

Usually hit shows move from Off Broadway to Broadway, whether musicals like “Hair” and “A Chorus Line” or plays like “Torch Song Trilogy,” “Proof,” and “Doubt” — not the other way around. Moreover, most of these shows begin at nonprofit Off Broadway theaters like the Public and Manhattan Theater Club; the for-profit Off Broadway landscape has gone through feast-famine cycles for decades.

The producers of the new “Rent” and “Avenue Q,” which are for-profit shows, hope their approach will at least stabilize commercial Off Broadway. It is a sector that once teemed with long-running shows like “The Fantasticks,” “Vampire Lesbians of Sodom,” and “Always... Patsy Cline.”

“I think what the ‘Rent’ - ‘Avenue Q’ guys are trying is very important because it’s so hard to make a brand happen Off Broadway, with its lower visibility than Broadway,” said Daryl Roth, a veteran producer. She is continuing to try, producing several new shows Off Broadway recently, including Charles Busch’s “Divine Sister,” a loving riff on happy-nun flicks.

“Perhaps,” Ms. Roth added, “we’ll learn if Broadway shows can become a renewable, low-cost resource for Off Broadway, and not just for the more expensive tours and London runs.”

Compared with Broadway and nonprofits like the Public and Lincoln Center Theater, commercial Off Broadway is now regarded as all risk, no reward by many investors. The chief risk: While 70 percent of Broadway shows lose money, the percentage is universally believed to be even greater Off Broadway. Moreover, few if any Off Broadway shows will ever make one rich, unlike Broadway’s “Wicked” (which has earned $530 million there so far) or even “Rent” ($274 million).

The rewards of producing Off Broadway, meanwhile, began declining a decade or so ago as labor costs increased and star actors began gravitating to Broadway. Producers and investors who might have put money into Off Broadway shows instead opted to double that investment and put it into a Broadway show in hopes of having a hit, winning awards, going to the Tony Awards and generally feeling fabulous. Off Broadway as a whole sold $30 million in tickets in the 2009-10 season; Broadway, about $1 billion.

That latest strategy is not without potential pitfalls. Audiences are fickle; “Rent,” an early ’90s love-and-loss story inspired by “La Bohème,” might seem old hat — it has toured extensively and a movie version came out in 2005 — even though this will be a brand-new production by the original director, Michael Greif. (Open auditions for a new cast will be held on March 18 for the production, which will start previews on July 14 and open on Aug. 11.)

Some artists may also complain that, in a theater environment that often feels like a zero-sum game, money and audiences are going toward old fare rather than the sort of ground-breaking work that “Rent” represented in the ’90s.

“As producers, we have to chose carefully where to invest money, and the fact is that we wouldn’t necessarily be investing in a different show if we weren’t investing in ‘Rent,’ ” said Allan S. Gordon, one of the “Rent” producers. Kevin McCollum is producing both “Rent” and “Avenue Q,” as is Mr. Seller; they are the respective lead producers behind the Broadway runs of those shows.

The recent commercial revival of “Our Town” Off Broadway illustrates the challenge of doing business the old way. The show cost only $400,000 to mount at the Barrow Street Theater; it drew rave reviews in February 2009, ran for 18 months and grossed more than $4 million. Yet it just broke even. The show had a relatively huge cast of 25 actors on Equity contracts, plus weekly rent, marketing and other costs, and ticket sales could barely cover expenses some weeks.

“The biggest financial success, to me, was that 50 people earned a living in the theater for 18 months, with pension and health benefits, during 2009 and half of 2010 when a lot of other Americans were struggling,” said Scott Morfee, an “Our Town” producer and a leader of Barrow Street.

Commercial Off Broadway has had its share of recent hits, like “Freud’s Last Session” and “Love, Loss, and What I Wore,” which feature small casts and inexpensive production values. “The Divine Sister” is five months into its run and its creator, Mr. Busch, is hoping that its longevity will become a sign that commercial Off Broadway is back.

Mr. Seller, the “Rent” and “Avenue Q” producer, acknowledged that his approach would not work for every Broadway hit. Still, the trend on Broadway is toward stripped-down, small-orchestra shows, like “La Cage aux Folles” and “Chicago” — two shows that could conceivably work smoothly in Off Broadway houses. And if such a move allowed shows to run longer and at a lower ticket price, Mr. Seller said, it is worth considering.

“Off Broadway used to be a flourishing, exciting place that young people went to because either the shows were interesting, the tickets were affordable, or both,” he said. “I think ‘Rent,’ a show that has always been for and about young people, will be a step back in that direction for Off Broadway.”