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Genuine questions:

* If it really is that lucrative (I do believe the figures he mentions) then why isn't everyone doing it?

* Who tips a guy in a costume $100 for a photo?

* If it really is that lucrative (I do believe the figures he mentions) then why isn't everyone doing it?

Yup! I suppose you wouldn't typically expect someone in a costume to be making that much.

* Who tips a guy in a costume $100 for a photo?

People on a business trip, also some people from the middle east.

Isn't there some kind of regulation for that? Where I used to live there were only a fixed amount of street performers allowed, and licenses were given out on a daily basis very early in the morning (or so I have heard).
Looks as if you're correct. http://nypost.com/2009/07/10/biff-wham-pow/

"Their comic-book adventure went awry when cops approached the dynamic duo on 43rd Street to see whether they had the required license to perform in costume in public"

There are a lot of people doing it. Look up the YouTube videos of the 'Racist Elmo' (Some paranoid man with mental issues), he also works costumes in Times Square among many others.
The performers are quite protective of their territory. I saw a short film about a guy who dresses as superman in times square, taking tips for photos. He got quite upset about the idea of other people just turning up and trying their luck, said he and the other superheroes would basically drive them out.

He took the job very seriously, priding himself on remaining in character and having a full knowledge of the superman mythos, and being able to engage with kids/fans and make them happy beyond just the photo. He got quite offended at the idea of other people turning up in a rented superman suit and not bothering with any of that.

Interesting film, interesting guy. Wish I could remember the title.

EDIT: I found it. Looks like he's not in times square, rather somewhere in california: https://www.youtube.com/watch?v=Jxfbsd-8CIw

* If it really is that lucrative (I do believe the figures he mentions) then why isn't everyone doing it?

Time Square is probably the only place in an entire country where a person can do this.

It's actually quite a small place.

Summary:

- Op noticed another street actor dressed up as Mickey Mouse in Time Square and marvelled at how he made $1 tip per photo with people.

- Op counted how many people the actor took photos with in a 10 minute period

- Op acquired a Spiderman costume ($180)

- First attempt standing at Time Square he made $40 during the day over a period of 2 hours

- Second attempt he made $220 in slightly under 2 hours in the evening.

- Op is mostly paid in coins and changed for amazon vouchers using the coincase machines

- Average tip is $3, biggest was $100.

Confessions of a Superhero (2007) http://www.imdb.com/title/tt1016164/

"Superhero Impersonators Throw Punches On Streets Of Hollywood" http://losangeles.cbslocal.com/2013/05/30/superhero-imperson...

"Temporary Injunction Means Characters Are Safe On the Boulevard." http://la.curbed.com/archives/2010/11/temporary_injunction_p...

As far as I can remember from the movie they seemed to be making a fairly reasonable living, maybe 30k a year. I'm pretty sure that you can be arrested for it, and that you have to pay taxes on that cash.

I work in Times Square. If you don't have a job, it's a place full of stupid tourists who are hemmoraging money and lacking brains. Doing the costume thing isn't really all that different from running a 3 card monte table.
Except the costume won't get you arrested. I've seen 3 card Monty hustler get arrested and even beaten by cops.