The differences that exist between opera and music theatre, have to do with form, dramatic structure, scale, style, and tone. In opera, the story is conveyed through aria and recitative, very rarely unaccompanied spoken word, and sometimes the dance.
In the creation of a music-theatre piece, artists borrow from many forms and structures. Sometimes, a music theatre piece will take the form of “the musical” where the story is carried in song, spoken dialogue, and dance. Often music and text are equal partners on the stage; i.e. poetry and jazz. Music-theatre composers often reach into more contemporary musical idioms, i.e. popular song, world music, hip-hop, etc.
As opera companies include time-honored American musicals in their repertoire and theatres produce opera, the distinctions between the two worlds are becoming blurred. Composers look to the operatic form through the prism of contemporary music to create their new work and have arrived at interesting fusions; jazz opera, for example.
For my part, I think the most compelling new music-theatre work combines the best of both worlds. It is happening on a chamber scale, where all of the elements – music, theatre, dance and the visual arts – are combined in highly theatrical ways. Scale in this context supports experimentation and risk.