R330 Steel Magnolias may not be the best play ever written, but there's no denying its impact and beloved place within our culture at large, primarily via its film version but also by virtue of being in constant circulation in regional, stock, and community theatre. All that started with the play off-Broadway. What commercial off-Broadway show has had that impact lately?
Not only are the plays at the level of Driving Miss Daisy and How I Learned to Drive and Three Tall Women gone from off-Broadway, gone too are the small comedies that would run a year or two, make money, and then go on to a healthy afterlife in subsidiary productions: Sylvia, Breaking Legs, Over The River And Through The Woods all had commercial runs. Now, small comedies or dramas that once would have been off-Broadway do limited runs on Broadway with stars and that's that.
It feels like when shows like Art (1998-99) started being on Broadway regularly, that was the beginning of the trend which continues with Meteor Shower, Red, and God of Carnage, all of which would have been off-Broadway without question once upon a time. Once commercial off-Broadway stopped being the place for smaller shows and a certain type of star, that was a turning point that couldn't be assigned to any one moment in time. Commerical off-Broadway, it could be argued, never really recovered from 9/11. The good "product" has gone to limited runs in NFP seasons or on Broadway.
The festivals pour a lot of trial product into the marketplace. And as someone mentioned, spaces are an issue. Off-Broadway has become concentrated into midtown, whereas it used to be every neighborhood had a few little playhouses. Even the upper east side had its own set of theatres. What off-Broadway show in the past ten years could fill a 299 or 499 for any length of time, beyond Jersey Boys or Avenue Q or any of the shows that had Bway runs and then moved to New World?
Part of me wonders if the reason so many of the larger off-Broadway spaces are gone (Promenade, Union Square Theatre, Variety Arts, Century Center) is simply because there wasn't a regular stream of good shows with broad enough appeal to fill them.
The closing of the gap between the Broadway and off-Broadway ticket price is a factor too. How small would a show have to be to sustain on a rush ticket price (%30-40) or even a $50 ticket?