I think that the majority of audiences are engaged with big, over the top, expensive stage musicals. I would be one of those people. The question that remains is "Are those spectacle shows with million dollar budgets just as good with a minimal budget?" One would have to take into consideration the score, singing and overall talent.
One of my favorite shows is The Phantom of the Opera. Last year I received a back stage tour to the US touring production of this show. I have to say as a set designer I was very overwhelmed with the backstage workings. Stage scenery was dangling over are heads like the big elephant that rolles out in act one and over 60 flys with backdrops and staircases attached to them are 70 feet above you. The cost for this spectale in 1992 was 12 million dollars! Carlotta's costumes alone range on an average of $40-$70 thousand dollars per look. The chandelier costs $250 thousand dollars just to rig it per city! This information was given to me by he company manager as I stumbled through the labyrinth size set.
This past year I worked on the first, Texas, college production of The Phantom of the Opera with a minimal budget. Was the show just as good? Yes it was in certain areas. The 40 plus cast sang this show just as good as the US tour. The principal roles were amazing and they could possibly sing this in London or New York, they were that good. The costumes were ample and lush in this production. Costumes had two or three rows of lace and embellishments instead of ten rows of hand dyed, imported from Africa embellishments.
Was this production a spectacle? No it was not. But it did have talent, ambition and precise direction that made it just as entertaining to watch.
So at the end of the day you do not need exessive set peices and million dollars worth of costumes to make a show. You need a strong storyline, music and good actors to take direction.
The pictures that are shown below are comparing the New York and movie version of Phantom with the local college production I consulted with.