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The backlash against ticket prices was
clearly evident in Europe over the summer.
Elton John, George Michael and
The Who cancelled dates at big venues, while
the Rolling Stones and Barbra Streisand
played before vast tracts of empty seats.
Ticket prices to see top acts have soared in
recent years, driven by what some pop economists
call “The Bowie Theory,” named for David
Bowie, who years ago uttered a warning about
the impact of online file sharing. Specifically,
“Music itself is going to become like running
water or electricity,” he advised. “You’d better
be prepared for doing a lot of touring.”
The theory suggests that bands that formerly
kept concert prices low to help to sell
albums and generate royalties, now regard live
events as the best way to make money. A corollary
to that might be, “Those who live by the
sword, die by the sword.”
Empty Seats and Cancelled Shows Biz
Streisand’s show at Paris’ Bercy stadium was
her first-ever at the venue, and promoters hiked
the top ticket prices to almost $500. Yet 3,000
seats went unsold. Her planned shows in Rome
and Nice were called off, officially for technical
reasons, after consumer groups campaigned
against the prices. (To be fair, her U.K. shows
in Manchester and London did all right.) Last
February, Elton John cancelled a planned Paris
mega-show, which had seats priced as high as
$1,500, and replaced it with a gig at the Paris Zenith
with a top ticket price of $300. The Stones
played to a thin crowd at the Stade de France in
Paris over the summer, and a gig in Belgium sold
only 33,000 of 70,000 seats. George Michael and
The Who abandoned plans to perform at the
same venue and opted for a smaller hall.
Are performing artists increasing the price
of tickets to offset declines in record sales? Apparenty,
they are if they think they can, and in
Europe, at least, many of them guessed wrong.
However, American promoters were more cautious
with pricing. According to a list compiled
by www.msn.com, many major touring acts
kept a lid on prices:
Beyonce: $47 to $125
Smashing Pumpkins: $20 to $25
Justin Timberlake: $54 to $155
Genesis: $57 to $260
Faith Hill & Tim McGraw: $49 to $97
The White Stripes: $40 to $50
Ozzfest: Free
Supply Side — Rock ‘n’ Roll Style Biz
Gary Bongiovanni, editor of touring business
bible Pollstar, says U.S. promoters have
cut the rate of ticket price increases this year
and, significantly, he estimates that prices for
the first half of the year were up only about 50
cents (“cents” – not “percent”) on average from
the year before. “And they’re still making a profit,
and certain acts, like the Police, can still charge
a couple of hundred dollars for the best seats
without it skewing the average,” he says.
European promoters likely will learn from
their U.S. counterparts. Though live touring
revenues have increased as recorded music
revenues have decreased over the last 10
years, and though in that time ticket prices
have more then doubled, continuing to
inflate those prices creates a backlash that
ultimately stifles growth. More artists now
receive most of their income from ticket sales,
not CD sales. Labels Warner and Universal
now are making participation in that revenue
By DanDaley Tickets to Ride
stream part of their strategy. The CD is folded
into the concert package, even being given
away, as Prince did in the U.K. earlier this
summer, igniting a firestorm of protest from
record distributors.
Finding Balance Biz
The leveling off of ticket prices in the U.S.,
combined with the increasing sophistication
of shows and the inclusion of premiums such
as CDs, suggest a maturation of the live concert
business. That’s good for the industry and,
as Bongiovanni points out, might also illustrate
that unlike the vise-like grip with which
the major record labels controlled the pricing
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of recorded music, the concert business is a
much more market-driven proposition.
“Live concerts give everyone immediate
feedback,” Bongiovanni explains. “The artist
knows immediately how the fans like a song; if a
promoter wants to charge $100 for a ticket and
no one’s buying, they know that quickly, too.”
Visceral matters affect the economics as
well. Albums are not a real-time proposition
— the process can start and stop as needed.
Tours and the revenue they generate, however,
depend on the ability and willingness of artists
to stay on the road. While their CDs might
have started out with a $17.95 list price, the
ticket prices an artist can command vary from
The Anklebiters The Biz
year-to-year, even month-to-month, creating
economic unpredictability. “There’s a flux in
the concert business that wasn’t there in the
record business,” says Bongiovanni.
This uncertainty is ultimately good for the
industry, bringing it back to the kind of meritocracy
artistry demands. But the increasing
influence in the concert space of large corporations
such as AOL, AEG and Live Nation,
whose shareholders and accountants demand
predictability, suggests that the business is
headed toward a crossroads. And the outcome
of that will largely determine if the fate of the
live music business will be the same as that of
the recorded music business.
2007 OCTOBER
39
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