I worked as a house manager all through college, and that was always a conversation I dreaded. It happened often enough, but... well.
- It wasn't at all uncommon for lecture series to have audiences consisting entirely of the husband/wife of the professor who was giving the introduction.
- We once sent up a show without an audience at all. (It was a preview which had been added 4-5 days before without any promotion except for its availability at the box office. The show itself bombed, and we wound up papering the house every single night. Even then we were lucky to hit 50% full.)
- On another occasion, the entire audience of a one-man show left at intermission--including the actor's boyfriend, who had to catch a train home.
- There was also a disasterous International Women's Day symposium where they booked our largest venue, arranged for catering and merchandise for 500, and only 12 people showed up. (The staff ate very well that day.)
Luckily, we had a fairly flexible system in place to make these conversations more comfortable. If there was almost nobody in the house at 5 minutes to curtain, and the decision was made to consider cancellation, they sent us out to talk to people with the following offer:
- A refund or a comp ticket for a future performance of this show.
- A parking waiver.
- A meal voucher. ($10, good at any on-campus food outlet for anything other than alcohol.)
Of the 8-9 times I made the rounds with this offer, it was only refused once, and we went up as normal that night.
There wasn't an especially hard line drawn as to when or when not to go up. On one occasion, we cancelled a performance with an audience of 10, while on another (excluding the no-show preview), we went up with an audience of two without even considering cancellation. The pattern was that the box office manager and the house manager would feed information to the SM, and the SM would then decide whether or not it was worth calling the producer, but it was a very gisted, "I'm getting a bad feeling" sort of process.