The theatre industry, just like media as a whole, is experiencing a paradigm shift. Fans no longer simply engage with the content du jour and forget about it the next day. With social media and streaming services, niche fan bases are emerging, which means niche markets are following close behind. For live theatre, this means more opportunities exist for additional, sustainable revenue streams than ever before.
While the theatre industry has been somewhat slow to adopt new technologies and trends, in terms of the overall media industry, the movement towards niche markets has been happening for some time.
Chris Anderson, an editor at Wire Magazine, wrote an article that eventually turned into the book The Long Tail: Why the Future of Business Is Selling Less of More. Anderson believes consumers who are able to find products more aligned with their specific individual tastes will migrate away from blockbuster hits and pop phenomena, and spend their money instead on those interests that are personal to them. Which means companies should look to sell smaller amounts of high valued items as customers navigate away from more mainstream offerings.
So what does this mean for live theatre?
For one, it means identifying opportunities and customer bases that make up theatre’s “long tail.”
Merchandising has always been a big part of the theatre industry. Fans of musicals and plays are willing to spend big bucks on a unique shirt or commemorative piece of paraphernalia. Usually this happens during the show, with fans lining up during intermission or after the lights go down. But capturing an audience’s attention outside of the physical theatre is key to capturing smaller market opportunities. That’s where advancements in the digital space come into play.
NFTs, or non-fungible tokens, are a great example of a niche product that will grow as the consumer experience moves online. NFTs are an example of how productions can take advantage of niche markets.
For one, the confluence of people interested in NFTs and theatre fans is a niche, but growing market. That center of the Venn Diagram, the theatre fan that overlaps with cryptocurrency enthusiast, is exactly the type of niche market Anderson defined as a “long tail.” Taking advantage of the growing popularity of NFTs, which has already permeated other fandoms like sports and gaming, is one way to capitalize on a growing, untapped market.
Secondly, by leveraging NFTs, production companies can target those micro-markets of online fans that are crazy about a specific show.
YOU DON’T HAVE TO BE STAR WARS
Think about it like this, Hamilton is sort of Broadway’s version of Star Wars. Sure, the genres are completely different, but they’re comparable from the perspective of being social phenomena. Hamilton is the biggest musical of all time, having traveled the globe and sold millions of dollars in tickets and merchandise. Star Wars is similar in terms of the property’s scope. Both are special cases in their respective industries.
Most film and theatre productions don’t enjoy the same success as Hamilton or Star Wars, but that doesn’t mean they’re failures. They’re simply enjoying niche fanbases.
Being able to leverage those fanbases is crucial to recouping investment and turning a profit. The digital space is the perfect tool to do just that. Being able to create digital merchandise (NFTs), target your fanbase, and sell them those highly valued (and limited) products is the next frontier in theatre monetization. That’s what capturing theatre’s long tail is all about.
With the internet, you don’t need a massive blockbuster hit that’s tantamount to winning the lottery. You can have a small but extremely passionate fanbase looking to invest their time and money into your show. But you don’t want them to stop after they see the show, and that’s where NFTs come into play.
Marketplaces like Third Act are leading the way in the NFT theatre crossover. Third Act is able to work with productions to create NFTs that can be marketed to that specific production’s fan in a place where those fans are always present. Online.
In addition, keeping these NFTs as limited releases help to increase demand. As Anderson’s research shows, demand overall for less popular products, when added up together, could rival demand for more mainstream products. NFTs are a great way to keep your fanbase paying attention, even when the curtain falls.
There may be some hesitance from productions who identify the segment of an audience interested in both theatre and NFTs as being one that is negligible in terms of size. And while the crossover between theatre and NFTs may be small right now, it’s going to grow steadily.
This has been proven out in other markets. Industries like sports entertainment have found great success when it comes to NFTs.
NBA Topshot is an example of a marketplace that targets a fandom (sports fans) that, traditionally, would not be linked to emerging tech. But it’s not really about the interest in tech, it’s more about marketing to a niche group within your larger market. In Topshot’s case, they are marketing towards megafans interested in purchasing collectibles. Because after all, NFTs are just collectibles that live online.
There exists in theatre a similar fanbase of people willing to spend money on collectibles. And when you’re able to produce collectibles for niche (and possibly underserved) fanbases of smaller productions, you’re able to capture smaller segments of a larger marketplace that, when added up together, are more influential than the segments of casual fans interested in more mainstream offerings.
While the heart and soul of the theatre industry will always be found on stage, as we move further into the future, the financial success of a production will rely more and more on how that production is able to capture an audience’s attention and hold it. Engaging your fanbase online with products like NFTs and spaces like Third Act is the perfect way to grab theatre’s long tail and hold onto it for it good.