Month: November

Full Text:

The economy in the United States has taken a hit, and even though people may still be buying the expensive concert ticket they may not be buying anything else. Because disposable income is down for the average American, once the fan is in the venue they may not look to spend on merchandise or concessions, which has become one of the best ways to generate revenue on a tour especially for the promoter and venue itself. Amphitheaters are the most vulnerable in this situation to feeling the pain because ticket grosses are smaller and to make money they have to focus and depend on money brought in from the concession and merchandise. As of right now, things have not slowed down noticeably for the larger tours, but there are worries for the future. The biggest problem is that a lot of concession owners already have contracts out with buildings and it’s hard to cut back costs. As far as merchandise goes, it will be a shame to see its sales slow down when that area has become such an important part in industry growth.

Month: November

Full Text:

Smaller bands are likely to feel the crunch of the credit crisis just as the larger arena acts. As consumers try to spare as much cash as possible, the touring acts that typically play the middle-range venues could see smaller crowds. Fans could be hesitant to see these buzz bands more than once every several years. Smaller, regional bands may be in the clear. These groups that sell $5-$15 tickets will likely have the same attendance at the small clubs that they play, especially since gas prices have dropped significantly. But the developing acts that sell $20-plus tickets will suffer. One issue is that a $20 ticket is not really $20, but more like $28 after service charges. Presales suffer because people want to save a few bucks by going to the venue to get walk-up tickets at the window. Ticket agents have reported a severe slow in ticket sales following Labor Day. One said a check bounced for a club, the first time he had ever seen such a thing. Cutting ticket prices is the only option for many acts. Unlike major touring bands, indie bands typically take a cut of the door, so the price directly relates to how much they make. The problem with cutting ticket prices is how it will affect the quality of the show. But at the same time, if the fan does not buy a ticket then none of the rest matters.

Month: September

Full Text:

After the summer concert season, high gas prices and a weak economy have not stopped the touring business from being very successful. Live Nation reported one of their best summers in recent memory, thanks in large part to tours like Tom Petty and The Police. Petty's tour grossed over $32 million, almost $9 million higher than his 2005 tour due to higher ticket prices and increased popularity among younger fans. Dave Matthews Band, Coldplay, The Police, and Rush all had their typical success, while the Jonas Brothers sold out amphitheaters and grossed over $11 million. Still, less popular artists such as Nine Inch Nails and Maroon 5 did suffer somewhat this summer. Such tours experienced fewer sellouts due to higher gas prices, people losing their jobs, and cutting back on spending because prices are higher. Festivals have been very successful over the past 5 years, but may have peaked this summer with Bonnaroo and Coachella failing to sell out due to saturation of the market. There were 15 major festivals this summer, compared to 7 in 2003. Many of the tickets for tours and festivals this summer went on sale before gas prices went up, which may have helped somewhat. The true test will be this fall when AC/DC, Metallica, and Madonna go on tour and are expected to be the top acts.

Month: September

Full Text:

The good news for the music industry is that the recent collapse of investment giants on Wall Street will have little to no effect on prospects for the music business. The bad news is that this is largely due in part to the industry already being in the tank. Music-related stocks did better than the resulting sell-offs, but this is because companies like Warner Music Group and Trans World Entertainment have fallen out of favor with investors. Also, AIG and Merrill Lynch are not involved in the music business to any degree that would have an effect. Lehman Brothers does manage a fund that provides equity funding for publisher EverGreen Copyrights, but the company has issued a statement saying that the bankruptcy filing will have no financial impact on them. The market downturn will have an effect on how major players wheel and deal. Since the industry is out of favor, it is tough to make transactions to raise capital. The trickle down will reduce consumer entertainment spending dollars, affecting the music industry as well.

Month: July

Full Text:

Music piracy has reportedly contributed to 70% of the reasons why global sales of recorded music fell 8% in 2007. But it has provided business with at least one advantage: statistics. It is helping management companies and more get insight into music-lovers interests and into what is truly popular. For every song purchased legally, 20 are said to be illegally downloaded. BigChampagne is a firm that compiles data about file-sharing to sell to its customers, like how many times a song is downloaded and where. Music executives are saying illegal downloading is no reason to put your head in the sand, because you might as well take advantage of the data available. These statistics are helping managers, labels, and more plan tours using the locations where artists are popular and can pair artists with groups their fans have similar tastes in based on people who download the same artists. Even though the execs are reluctant at first to use data from illegal use, they are coming to terms with its benefits.