Bloodbath on Broadway: The credit crunch hits

They don't usually stop smiling in Spring Awakening, a relentlessly cheerful Broadway musical that won eight gongs at 2007's Tony Awards. But there were frowns aplenty backstage last week, when the cast were suddenly informed that they will all very soon be out of a job.

In the latest outbreak of what has become know as the "Broadway Plague", the show's producers announced that with audiences at 60 per cent capacity – and box office takings down to $350,000 (£220,000) a week, from $750,000 a year ago – the curtain will fall for the final time in mid-January.

These are hard times for America's theatreland, which is finding itself sorely tested by the cold reality of America's spiralling economic crisis. Though lights are still shining bright in Times Square, "house full" signs are becoming increasingly hard to find. So far this month, five of New York's biggest productions have announced plans to close. In addition to Spring Awakening, adapted from the 19th-century German playwright Frank Wedekind's play about teenage romance, the plug is being pulled on Xanadu, Monty Python's Spamalot, Legally Blonde and Hairspray.

As audiences cut back on spending, at least six other major Broadway shows are now operating at below break-even, while four that were scheduled to open this year – including a $4.5m revival of Godspell – have been suddenly cancelled after investors got cold feet. And there are signs that the infection is spreading to London's West End.

The Take That musical, Never Forget, will close prematurely next month, along with the musical spoof Eurobeat. Avenue Q, the award-winning hit featuring puppets, was taking bookings until the end of next April, but will now close a month earlier. Plays such as Girl with a Pearl Earring and Riflemind have already been pulled.

"Shows that should be running for longer are closing early," said Michael Reidel, theatre columnist for the New York Post. "For the last 10 years, the industry has been living off the back of European and Asian tourists coming here, because the dollar has been so weak. Now it's stronger, they're disappearing. And ticket prices have got so high that most New Yorkers are priced out of the market."

Last week, theatres were running at 78 per cent capacity, well below their usual seasonal level of nearer 90 per cent. Average ticket prices were $76. "If this was a couple of years ago, I could predict that Thanksgiving and Christmas would be the panacea," said Hal Luftig, the producer of Legally Blonde. "But already, October isn't responding the way other Octobers have, and who knows what's going to happen during the holidays?"

Experts now say the future of hits such as Avenue Q and Grease is looking rocky. Robert Hofler, an editor at Variety, said last week that 13, A Tale of Two Cities and The 39 Steps also face tough times. January and February are traditionally quiet times at the box office, and several of the shows that were going to fill major venues have been cancelled. In addition to Godspell, it emerged this month that Harry Connick Jr's Nice Work If You Can Get It has been indefinitely postponed. An announced revival of For Colored Girls was also canned.

Any financial crisis could also cause industrial trouble in theatres. Last year, the Broadway League of venues suffered a strike by stagehands over the normally lucrative Thanksgiving holiday. "We are in a very, very serious situation," the veteran producer James B Freydberg told the New York Post. "The Broadway League needs to start planning for a troubled future. And that may mean meetings with unions to discuss the costs of this industry."