As ticket prices for Broadway musicals consistently rise, independent record labels like Sh-K-Boom, which preserves musical theater scores, must grapple with the proliferation of free music: specifically, web services such as YouTube and Spotify that cannibalize CD sales and iTunes downloads.
“There have to be the purchases,” Sh-K-Boom President Kurt Deutsch said Aug. 3 at the Upper East Side Barnes & Noble, before a concert promoting his new Broadway cast recording of She Loves Me. His company has put out about 100 cast recordings since 2002, beginning with Jason Robert Brown’s The Last Five Years.
“The trickle down from Spotify and other streaming services is not enough to sustain a viable business for a lot of these records,” he said. (Spotify is an advertising-supported music service with the option to pay $9.99 a month for no ads. The Stockholm-based, ten-year-old company pays a tiny royalty for each song streamed.)
As Deutsch spoke, diehards were lining up with freshly purchased $18.99 CDs to solicit cast autographs and to hear soprano (and occasional Melania Trump impersonator) Laura Benanti sing selections from the recent Roundabout revival. Sh-K-Boom faces declining CD and digital download sales, which rising streaming revenue doesn’t yet offset. For some albums, Deutsch partners with the show’s producer and splits any profits. For recordings of nonprofit shows, Deutsch earns a management fee and “angels” typically subsidize expenses.
The 50-year-old Grammy Award-winning producer and former actor calls She Loves Me one of his favorite cast albums that he’s released via his Ghostlight imprint. Deutsch and co-producer Lawrence Manchester recorded the orchestra and cast simultaneously, without headphones or amplifiers. The show dates back to 1963 and the new recording was created like a classic album from that era, Deutsch said. Although the Jerry Bock and Sheldon Harnick songs were recorded in just eight hours at Avatar Studios in Hell’s Kitchen, the project cost over $200,000, which is about average for a cast album today.
Longstanding union terms inflate album expenses. For example, an orchestrator — who expands the composer’s music for an orchestra — and a copyist – who maintains and prepares the score – each earn a “re-use” fee that can run tens of thousands of dollars. Actors earn a minimum week’s pay for each day’s work in the studio. Deutsch proposes that, as in England, participants take less upfront and receive a percentage of revenue. And he’s experimenting with selling the physical CD and digital downloads for 90 days before releasing songs on Spotify. “If I can get 10 percent or 20 percent of the people who listen to it on Spotify go to iTunes and buy it, I’ll make more money than if get a million listeners on Spotify,” he said. “What I’ve concluded is, treat an album that’s coming out like a film before it starts streaming on Netflix.”
Deutsch dreams of a score’s digital download one day being baked into a musical’s ticket price. “The music is the biggest selling point of a show,” he said. “Producers should try to get it into as many people’s hands as they can.” (And in-store promotion still does the trick: Barnes & Noble sold 200 CDs the night of the event.)
His cast albums for long-running shows still do very well, including The Book of Mormon, Something Rotten and Beautiful: The Carole King Musical. And since Hamilton, sales of In the Heights, Lin-Manuel Miranda’s first Broadway musical, are up tenfold, to about 800 a week. (Hamilton from Atlantic Records, has spent 44 weeks on the Billboard Top 200 album charts, peaking at No. 3.)
Deutsch argues that improving album economics is key for musical theater, which he believes is enjoying a resurgence, thanks in part to Hamilton. A recording of even a short-lived show can inspire productions around the country in perpetuity. The Last Five Years originally ran for just two months off-Broadway, but the recording spawned hundreds of productions and a 2014 film that Deutsch produced. He ruefully noted that Shuffle Along, one of last season’s major musicals, didn’t record a cast album before it closed last month. “Without a cast album, it’s as if the musical didn’t exist.”