IT WILL be the most expensive musical Australia has ever staged, so you might expect King Kong to turn a skyscraper-sized profit. But if Love Never Dies and Moonshadow are any guide, it could lose money - and still be deemed a commercial success.

Like the great ape story, which opens in June, those two shows had their world premieres in Melbourne. Neither banked on a profit here. Instead, the windfall will come when they play internationally.

It's a far cry from the late 2000s, when we had to wait years for hit shows such as Wicked and Jersey Boys. Melbourne, it seems, is now a global testing ground for big (and potentially loss-leading) musicals.

Producers attribute this to our large pool of theatrical talent, the public's love of musicals and the ability to develop a show without the scrutiny of Broadway or the West End. Massive cost savings help sweeten the deal.

''Installing the sets might cost us half a million dollars here,'' says King Kong producer Carmen Pavlovic. ''In New York, it would be up around the $A6 million mark. They've got different union provisions there which are very prohibitive.''

Pavlovic is coy about the cost of her show but confirms it is ''multiples of what a normal musical would cost in Australia … we've spent $5 million trying out various animatronics and prototypes you'll never see on stage''.

What we will see is a six-metre gorilla looming over the audience, animated by hydraulics, computers and a team of puppeteers. Pavlovic says it's too expensive to move around Australia, which is why King Kong will play a limited season in Melbourne only.

The acclaimed producer already has her sights set on the lucrative international market. ''I wouldn't take it to New York if I knew it would only run for one year,'' she says. ''I'd hope we'd be there for at least a few years. It wouldn't be worth the money or the time otherwise.

''The dream is to have a flagship production in three or four key markets around the world. That's when you start earning multiple royalties, fees and profit shares and really exploit the asset.'' When asked about the Melbourne returns, Pavlovic says: ''If we make a profit, great. But we really see this as a chance to develop the show and take it to international markets.''

Tourism Victoria estimates it will draw 50,000 interstate and international visitors and have an ''economic impact'' of $45 million.

Like Pavlovic, Love Never Dies producer Tim McFarlane admits he never expected to profit from the Melbourne world premiere in 2011.

''Its real worth was always going to be in reproducing it outside Australia,'' says McFarlane, who rebuilt the show here after the original London version flopped. ''Our goal in Melbourne was to change the show artistically and have it accepted.''

It appears to have worked: McFarlane is now negotiating a British tour and a scaled-down version is playing in Copenhagen.

The future of Moonshadow is less certain. Created by Yusuf Islam, formerly known as Cat Stevens, it closed early last year after mixed reviews. At the time, producer Anthony Georgiou said, ''Melbourne was never a money-making exercise. Critics will pick the bones out of it, then we'll tweak the show and hopefully take it around Australia before we hit Broadway or the West End.''

Georgiou confirmed it would not recoup its costs until it moved overseas. ''Melbourne is a great testing ground,'' he said. ''There's lots of talent and audiences who are willing to try something new.

''It's attractive to producers because there's a level of creative freedom you don't get overseas.''