Theatre audiences still show up. So why do so many shows fail to make money?
Economists say the theatre sector struggles from something called a ‘cost disease’. But what does that mean? And why is it so hard to fix?
Despite Australian theatre audiences remaining strong, many productions continue to lose money. This discrepancy between ticket sales and expenses reveals a fundamental challenge within the industry. Even as the Australian Bureau of Statistics reports that 22.8% of Australians aged 15 and over attended theatre performances in the previous year, major theatre companies are still struggling financially.
Recent cancellations of major productions, such as Waitress and Beetlejuice, have fueled speculation about the affordability of theatre in Australia.
While more people are attending plays, the financial statements of prominent theatre companies paint a grim picture. Queensland Theatre, for example, grew its mainstage audience by 5.6% in 2025 and box-office revenue by 42%, yet still recorded a deficit of A$989,000. Bell Shakespeare saw a small increase in income but saw expenses rise more rapidly.
Similarly, Sydney Theatre Company achieved a substantial revenue of $28.75 million, yet still faced a substantial $8.76 million deficit. These companies rely on various sources of funding beyond ticket sales, including grants and philanthropic donations.
The ticket price alone does not reveal the true costs of producing theatre. From paying professional actors and covering the expenses of rehearsals to venue hire, insurance, and marketing, the costs quickly add up. A single production, such as the Australian adaptation of The Book of Mormon, can cost up to $11.5 million to stage.
This cost structure, driven by the "cost disease" identified by economists Baumol and Bowen, points to the fundamental challenge of producing theatre. Live theatre cannot benefit from the same productivity gains seen in other industries, as the human element remains central to the art form.
Efforts to address the issue include government intervention, such as similar tax relief schemes to those in the UK. A refundable theatre production incentive could provide financial relief to smaller, non-profit companies. Additionally, a government-funded cultural pass for young people could increase attendance and support theatre companies in reaching a broader audience.
Ultimately, the solution likely lies in a combination of these approaches, recognizing the need for public funding alongside private and philanthropic support, while acknowledging that the core essence of theatre—the live performance on a stage—remains unchanged.
Written by urgent.news from The Conversation AU's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
