You're right. It sounds like a location issue, and some of the big
theaters are on Broadway, but for all intents and purposes, "off
broadway" is really more about theater size, production budget and
commercial orientation than location.
From the Encyclopedia Britannica:
" The term off-Broadway refers to the small professional productions
that have served for years as New York City's alternative to the
commercially oriented theaters of Broadway. The plays, usually
produced on low budgets in small theaters, have tended to be freer in
style and more imaginative than those on Broadway,"
"What is the difference between on Broadway and off Broadway? And,
what is Broadway? Is is just a name for performances or is it an area
of New York?
The difference between a Broadway production and an Off-Broadway
production has to do with the number of seats in a theater. Broadway
theaters must have 500 or more seats. An Off-Broadway theater must
have 100 to 499 seats. An Off-Off-Broadway theater has 99 seats or
less. Broadway is actually a street in New York City that cuts through
the heart of the theater district. Currently all Broadway theaters are
located between 41st Street and 65th Street."
Generally, a theatre is classed as a Broadway Theatre if it is
geographically between 41st street and 54th Street and between Sixth
and Eighth Ave, and has a minimum of 499 seats.(Note, there are
exceptions!!). Broadway Theatres are also mainly commercial theatres.
** OFF BROADWAY & OFF OFF BROADWAY
Generally, a theatre is classed as Off Broadway if it has less than
499 seats and more than 99 seats and/or is outside the geographical
Broadway area. An Off Off Broadway theatre generally has less than 99
seats. Most Off Broadway theatres are also non-profit."
source: New York Theatre Guide
"Basically, to be 'Off-Broadway' means to be in a small theater, with
a play not meant for a commercial marketplace."
source: Arizona Republic
"off broadway means"
"term off broadway"
"difference between" "off broadway"
I hope this helps.