Chiefly British, the phrase bums on seats denotes the members of an audience, at a theatre, cinema or other place of entertainment, especially when viewed as a source of income.

The earliest instance that I have found is from the column Douglas A. Grosvenor’s Theatre Pages, in the Coventry Standard (Coventry, Warwickshire) of Thursday 12^th October 1967:

IS THE THEATRE DYING?

Why can’t the British Theatre pay its own way?
In my view, goods resulting from private commercial enterprises are likely to excel a subsidised product. They HAVE to be good to sell.
So why can’t the Theatre, if it is any good, sell its seats at their present economic price, while keeping its costs to a level which will ensure a profit?
I ask because, many a provincial theatre would no more than cover its bare costs, even if it regularly played to good houses.
The Belgrade is fairly typical of such theatres. If it played to eight full houses a week, it would gross only £2,000, allowing for some seats at concessional prices.
No businessman calculates profit-potential on an unattainable 100 per cent. sell-out. So suppose that, instead of its average of a bleak 40 per cent. capacity audience, the Belgrade played to 75 per cent. and grossed a weekly £1,500.
Surely you could mount a play for £1,500 and show a healthy profit? If not, aren’t running costs too high? If they are, it suggests someone must be skimming-off the cream.
This prompts my question—Who is “milking” the Theatre?
On the evidence of the Belgrade, more generous than some theatres, certainly not the actor. Belgrade director Warren Jenkins confirmed this when I put the question to him.
Nor (he agrees) the front-of-house staff. And, if other speculators who own theatre bricks-and-mortar are like Coventry City landlords (charging £240-a-week rent), you can add—not the landlords.
A theatre director would normally command no greater salary than he is worth and the same goes for his immediate assistants. Lighting, heating, telephones and publicity are virtually unalterable charges.
It follows that seat prices must be too low. Mr. Jenkins estimates that the economic price for an unsubsidised seat would be at least two pounds. Horror! Who would pay that?
He points out—“Plenty of people pay ten shillings weekly to see a football match. Since we change our programme about every three weeks, this amounts to 30s. straightaway.” But—“This is not the answer. Money is not the criterion. It’s ‘bums’ on seats!”
At one time actors used to subsidise the theatre by appearing for starvation wages. “But,” says Mr. Jenkins, “you won’t catch them doing that now.” He points out: “When an actor not long out of drama school can earn £30,000 a year in films, how can I keep him here?”
[…]
Who is milking the theatre? Mr. Jenkins thinks: “The agents put on the blackmail. What is £10 to £30 at the Belgrade? How many people are going to see you, compared with the £10,000-a-year you might earn in a television serial?”
I agree with Mr. Jenkins. “Films—and to a degree television—offer processed food. You don’t have to think so much. The director shoots scenes as he wants you to see them. And, as with processed food on the table, you become so that you cannot stomach the real raw thing.”

The second-earliest instance of bums on seats that I have found is from Jesus who?, an article by John Larkin about what he called “the Jesus movement” in Melbourne, published in The Age (Melbourne, Victoria) of Saturday 15^th January 1972:

Like a thief in the night, has come the Jesus Christ Revolution, at the Comedy Theatre.
Implying that it is a very successful American rock musical, its people, right up to opening night, were very mysterious about who was behind it, etc. All they would say was it was an anonymous group called the Jesus People. All we knew about the Jesus People was this was a copyrighted name.
A subsequent check in Sydney has shown the Jesus People was registered in October last year by Harry Wren, Pty. Ltd.
Harry Wren, an old-time Australian showman, appeared on the Comedy stage after opening night and announced proudly how everybody had been fooled, and how the show was created and put together in only three weeks. After seeing it, we believe him. Wren was proud that the show was Australian-made.
[…]
Harry Wren had a lot to say later about how he was a Catholic and how he thought it was important to get The Message across.
One of this people put it another way: “Bums on seats. That’s what matters first.”

 

Other words or phrases of theatrical origin:
to be decent (sufficiently clothed to see visitors)
malapropism
claptrap
cloak-and-dagger
Mrs Grundy
Paul Pry
Mummerset
simon-pure
fedora
Box and Cox
Hamlet without the Prince
slapstick
old chestnut
to play to the gallery
to steal someone’s thunder