For centuries, humankind has been producing performances, sometimes for very different reasons. In the earliest days, these performances were mainly storytelling efforts made to preserve history and traditions. Later, they became ways for us to entertain ourselves. The overall goal of any theater company is to fill the seats of the theater. Even a nonprofit company could lose its funding if its fare isn't appealing to the market. For-profit companies depend on selling tickets as well as program advertising to earn revenue. If a theater company is going to maintain a full house through most of its season, it needs to produce plays that its audience wants to see, and then provide a quality performance. If there is more than one theater in the vicinity, or it is competing with other entertainment options, such as the ballet or movies, then it is even more important for the theater company to stand out from the competition.

The theater industry contributes much to the economy, according to the Theatre Communications Group (TCG). According to a 2012 report by TCG, it contributed nearly $1.94 billion in the form of goods and services in 2011. In the same year, 130,000 artists, administrators and technical production staff were hired. The TCG estimates that the economic impact of the industry is even greater than this because theater audiences often dine out before going to the theater, and they pay for parking and babysitters.

The ancient Greeks and Romans were among the first civilizations to produce plays for audiences similar to those performed in the modern world. In 16th century Europe, theater also rose to prominence, due mainly to playwrights, such as Shakespeare, whose plays are still being produced five centuries later. The first American acting company was established in Williamsburg, Virginia, in 1752 and by the early 20th century, new forms of theater—vaudeville and burlesque—were popular. It was also during this time that major theater centers in New York and London were established. Plays that were successful there would tour the country to other major cities for performances. By the 21st century, many large metropolitan areas such as Chicago, Seattle, Los Angeles, Minneapolis, San Francisco, were also considered important theater centers. The growth of nonprofit companies also occurred during the early 21st century, as a way of funding more experimental theater companies or those that wished to produce work outside of the mainstream. Some nonprofit companies formed simply as an alternative business model.

While there are many people who work in the theater industry, a small percentage of them work full time or support themselves solely from this work. Most people work part time in the theater and support themselves through other jobs. The most prevalent jobs in the theater industry are actors or performers, directors, producers, stage managers, set designers, lighting and sound technicians, playwrights, and makeup artists. Most of these workers are represented by a union and are required to be members of the union.

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