Hamilton Players’ Backstage Series
This post begins our ongoing Backstage Series, where we pull back the curtain
on how community theatre really works behind the scenes.
Behind the Scenes #1 - Royalties and Licensing
One of the
largest behind-the-scenes expenses in live theatre is something many patrons
rarely think about: royalties and licensing.
When Hamilton
Players produces a show, we are not simply choosing a title and putting actors
on stage. We are legally licensing the right to perform someone else’s work.
Every musical and most plays are protected by copyright, which means we must
receive permission and pay for that right before the curtain ever rises. Licensing
is handled by theatrical agencies such as Music Theatre International, Concord
Theatricals, and Dramatists Play Service. These organizations represent writers
and composers, ensuring artists are compensated when their original,
copyrighted works are performed.
How Are Royalties Calculated?
It may surprise you to learn that royalties are not a flat fee, and are not based on how many tickets we actually sell. They are typically calculated using what is called Gross Potential Box Office. This figure is determined by:
- Our highest ticket price
- The number of seats in the theatre
- The number of performances
In other words,
royalties are based on the maximum amount we could earn if every seat were sold
at full price, not on what we actually make. From there, the licensing house
applies a percentage set by the show's creators. For musicals, this often
ranges from 10 to 15 percent of the potential gross. Most contracts also
include a minimum royalty per performance, which guarantees the authors' compensation even if attendance is low.
Why Do Some Shows Cost More Than Others?
Not all titles are priced equally.
And That Is Not All
Royalties are only part of the licensing expense. Theaters also pay for:
- Script and score rentals. We are required to purchase or rent a minimum number of scripts and librettos. We cannot purchase one and photocopy it.
- Orchestra parts. Musical scores are rented and must be returned after the production closes.
- Performance or rehearsal tracks. These are professionally recorded orchestrations used in place of, or sometimes in addition to, live musicians.
- Logo packages. These are officially branded marketing materials required for advertising the show.
- Streaming permissions, when available. It is generally illegal to record or stream a licensed production without explicit permission. Streaming rights must be separately licensed and are not available for all titles.
- Archival video rights, if permitted. This allows the production to be recorded for internal purposes only. It does not allow public posting or sales. In some cases, contracts allow cast members to receive a personal copy.
All of these
expenses and restrictions are clearly outlined in the licensing contract we
sign.
Speaking of Contracts
In addition to
securing a licensing contract to perform a show, we must have that contract
approved and paid in full before we can announce a season or hold auditions. For
Hamilton Players, royalties typically range from $2,500 to $7,200 per
production. That amount must be paid before a single ticket is sold.
Why Royalties Matter
Royalties ensure
that playwrights, composers, and lyricists are paid for their work, just as
authors are compensated when someone purchases their book. When you buy a
ticket, a portion of that purchase goes directly back to the creators who made
the story possible.
It is one of the
many invisible investments that allows community theatres to legally and
ethically bring Broadway and beyond to the Hamilton Playhouse.
Royalties may secure the rights to perform a show, but the contract determines how it must be performed. In our next Backstage Series post, we will pull back the curtain on the creative boundaries that come with licensing a production.
