Investing on Broadway: Just Another Song and Dance?

The destination for many aspiring singers, Broadway is a famous mainstay of New York City night life. Some Broadway shows become such runaway successes that they are considered part of Broadway itself, and the show itself can become even bigger than one city street. Investors who get involved with these breakaway successes (Cats, for example) can make a pretty profit from their upfront dollars. But is investing on Broadway a good idea?

Some Broadway hits are too big to contain in the theatre alone. Stage shows (like Dreamgirls) become blockbuster movie hits, and investors can reap rewards more ways than one. But does that mean investing in Broadway is always advisable?

The entertainment industry (television, films, music, plays) garners hundreds of billions of dollars a year hundreds of billions! With money like that being shelled out by paying customers, somebody is certainly getting rich. But not all movies, TV shows, records, and plays strike it big. In fact, some do nothing but flop even the big-budget, big-name projects that seem very much like a sure thing.

The problem with the entertainment industry is that nothing is a sure thing. No one can predict how the public at large will react, or even what theyll like. Some entertainment hits come as a complete surprise, while many flops are equally astounding. Investors who back big names, big budgets, and star power might get let down, while other investors might invest in much smaller, low-key projects and gain big.

When its your money, you have to go on a mixture of knowledge and instinct. In entertainment investing, it helps to consider projects that have worked in the past. What Broadway shows have become the most successful, and what did they have in common? What movies gained the most revenue? Look at the entertainment facts, and make sure you know a little bit about the project itself, before you invest. Do you like the plot? Do you like the script? Does your gut tell you that this might be a big hit? Sometimes, instinct alone guides investors into making those big dollars. Sometimes, even instinct lets you down.

The entertainment industry is risky, but exciting. Some entertainment investments grow quickly and bring returns after a short period of time. In this industry, you can often see how your investment is doing. Youll know how many people are watching, how many tickets have been sold, the number of records bought, and youll be able to keep track of your investment real-time. If you find an entertainment investment, like a Broadway play, that you believe in and you can stand to lose your investment dollars, its not a bad idea to take a risk. But resign yourself to losing your investment, as this is a real possibility. In entertainment, nothing is for sure.