Mark Lawson, writing in today's G2, is shocked by the forthcoming closure of Betty Blue Eyes – a show he bills as "the most brilliant new musical of recent years". Is it the end for the homegrown British musical, as he suggests? Does the West End face a grisly future of jukebox hits and film adaptations?

It's a fair point – but I wonder if things are more complicated than Lawson allows. For a start, there are plenty of musicals that are arguably as "homegrown" as Betty. Ghost may be an adaptation of a Hollywood film, but it has music by Dave Stewart and opened in Manchester before transferring to the West End. Billy Elliot – which, as Lawson allows, has a claim to the most brilliant new British musical crown – is still going strong at the Victoria Palace and Matilda, a new musical based on Roald Dahl's book created by the Royal Shakespeare Company, is soon to come to the Cambridge. The immediate future looks quite bright. There's a stage adaptation of Bridget Jones in the offing, with a score by Lily Allen, and Neil Hannon of the Divine Comedy brings his Swallows and Amazons from Bristol Old Vic to the West End this Christmas. Meanwhile, shows like Legally Blonde, although US-originated, have just as much of a claim to newness as Betty – which is itself an adaptation.

Nor has Betty's closure come completely out of the blue. It's exceptionally well-performed, well-produced and has a better musical score than the majority of new shows – as was recognised in the reviews – but was somewhat old-fashioned and was never likely to appeal beyond the core musical theatre market. Stylistically, it feels like it could have been written at any point over the last half-century. Even before the show opened, there were mutterings from within the industry that it might struggle. And, as producer Cameron Mackintosh now acknowledges, while those associated with the production are top-class performers and creatives, none of them are stars who would shift tickets.

But Lawson is right that new musicals have struggled in the West End recently. The question is why. One reason is that they rarely benefit from subsidy. With a few shining exceptions – London's Theatre Royal Stratford East is one – there simply hasn't been the same level of investment in musical theatre writers in the way that venues like the Royal Court invested in developing playwrights. This has meant that musical theatre hasn't found its own version of, for example, War Horse – a commercial hit nurtured by government support from experimental beginnings.

Instead, it has been left to the commercial sector which, for perfectly understandable reasons, has adopted more of a sink or swim approach. (If War Horse had been thrown straight into the West End, it would also have struggled.)

It has also meant that it's harder to take risks, so more recognisable brands like jukebox musicals and adaptations end up taking the forefront. Thankfully, it seems that Arts Council England has wised up to this problem and has begun offering revenue support to musical theatre development agencies for the first time. Maybe we'll see the fruits of that in a few years' time.

The second problem is stylistic. In the golden age of musical theatre, it was the popular music of its day. Today, the traditional musical is, like opera, more of a niche pursuit. It needs to reinvent itself if it is to have a vibrant, popular future. You might even argue that plundering the back catalogues of pop groups such as Abba and the Spice Girls are one way forward (TV casting is another), and the best of these have no problems attracting large audiences.

Of course, there is a hard core audience of musical theatre aficionados who will visit good quality, traditional musicals like Betty Blue Eyes. But if new musicals are to find the large, popular audience required for a sustained West End run, they need to engage with popular forms of music, not sounds and forms that hark back to a long-distant golden era. And, if you look at the composers behind Matilda, Bridget Jones and Swallows and Amazons, maybe the future's not quite so bleak as all that.