Month: November

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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

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Even though the country is going through an economic crisis, the dollar’s value has managed to go up. While this may sound good in general, it is not bringing anything good to the touring industry. Artists and promoters are finding that the strength of the dollar is hurting their profits when touring internationally. The change in value is big given the short amount of time that it happened in, and deals that were made a while ago aren’t looking so good now. One example was with Celine Dion. When touring in Canada, the settlement was off by 20% because of the dollar change. There have also been issues with other artist’s earnings like Tom Petty. The strong value of the dollar is causing artists to reconsider touring in other countries and causing them to cancel shows or at least postpone their tours over seas until the second part of next year. Tour negotiation is going on hold for the most part to see how this currency issue plays out, because even though bands would like to tour in other countries its too hard to set out payment until the dollar is more stable.

Month: November

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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: October

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Everyone in the touring business is wondering what will come next in this current financial crisis, players both big and small included. Live Nation is a big focus after spending millions to sign the likes of Madonna, Jay-Z, U2, Nickelback, and Shakira to giant 360 deals. Their prudence shows after shedding a total of $465 million in assets since 2006, including $205 million in September to sell its Motor Sports division to Feld Entertainment. The company did this "to repay borrowings under its revolving credit facility, to permanently reduce a portion of its term loan, and to invest in its core music business." Many think Live Nation still paid too much to sign acts like Madonna, even though her current tour is about to break her own gross record. The company is still optimistic and say the current situation has not hurt ancillary revenues and ticket sales. Smaller business are worried. Tour bus outfitters will possibly see a big drop in business if stars and mid-level acts drop down their amounts spent on buses, or if some acts use them at all. Sponsorships are harder to come by when budgets tighten. The same goes for venue-naming rights. But it has been proven that these are worthy investments and typically have a high return of investment.

Month: October

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Even the strong touring business may start feeling the pinch of the current international financial crisis. Although the entertainment industry, especially live music, has been thought to be recession-proof, this sector of the industry could experience hits in several of its areas of revenue. Sponsorships will be more difficult to secure if companies are tightening their budgets. Tighter credit conditions force promoters to be more conservative about their advances to artists. Rather than $10 million up front six months prior to a tour, the advance may be more like $2 million then and the rest coming closer to the start of the tour. Currency volatility is another thing to consider. Although they may not have any idea which will be up or down, they need to know in advance how many dollars they will get and spend for each euro, sterling, and yen. Ticket pricing will of course be of consideration. $120 for a 2-hour concert will be much tougher to sell than $10-$12 tickets to a 2-hour movie. Ancillary incomes like VIP packages, ticket auctions, and merchandise will be the first streams of revenue to feel the pinch. Private and corporate events that book mid-level artists will be on the downswing, which is usually lucrative gigs for such artists. Funding and donations for new buildings and projects will also be harder to come by.

Month: September

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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

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Arenas and theaters in most small to midsize touring markets are in need of keeping their buildings filled with content. Venue Coalition is a consortium of arenas and theaters that work to keep its member's buildings under the radar of agents, promoters, and other content providers. It was created in 2006 by Neil Diamond tour producer, Jeff Apregan. Capacities of VC's buildings range from 23,500 to 4,684 seats. They help bring opportunities to these secondary markets that would not usually be considered for such tours, shows, and events. Information sharing is key in what VC provides to agents and promoters. VC provides a routing grid as well as historical and technical data for each venue. They are about identifying who's working, when, where, how much, who the decision-maker is and what the odds are of them coming to their facilities.

Month: september

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Even though the economy in the United States is not at its best, amphitheaters did quite well in the first half of the summer in 2008. Both attendance and gross per show went up when compared to the year before. While the artists that were on tour this summer at these outdoors venues helped with the success of the season, there were also other contributing factors that added strength to the mix. The over all business of running and booking an amphitheater is now operating more efficiently and because of this the number of people attending has risen and operational costs are down. Marketing by way of the Internet has shown to be a promising way to cut costs in advertising, while also enabling these venues to reach a larger audience. Another positive asset that amphitheaters have is that two-thirds of the venue is usually sold as general admission because of the lawn space that they have to offer. This offers concert goers more favorable ticket prices, and when tickets for that area are presented in a ticket package format the venues have noticed that they receive a great response from its buyers. Even though the past few years have showed a downward trend in amphitheater business, the work that has been put in to turn things around is showing and paying off. Even though fans are faced with hard economic times and higher ticket prices, this summer was evidence that live music is important to many people and that they are willing to skip on other luxury items to be able to attend outdoor music events.

Month: September

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The touring industry had a great first half to 2008, and in order to close out the year on a high note the managers of arenas are focusing on seven major points. 1.) The Economy. Venues have to be sensitive to consumers with high gas prices, unemployment, mortgages, etc. Price for fuel for the buses and trucks will hurt profitability, especially for midlevel acts that might be forced to pull back and not work as much. 2.) Ticket Prices. Venues are walking a fine line between maximizing ticket prices and alienating ticket buyers. Major shows that charge aggressive prices are causing fans to choose between one or two major shows and passing on the midlevel artist. Secondary markets are also suffering from high prices and scalping. 3.) Ticketing and Technology. With technology changing at such a fast rate, it is tough for venues to keep up with what to invest in and what different artists, agencies, fans, promoters, etc. want. 4.) The Fan Experience. Venues are trying to do anything they can to make the consumer feel as if they're getting their money's worth, or else they will do something else. The fan experience is about value. 5.) Artist Development. As the core group of artists that have sustained the live music industry for the past 30 years or so leaves the road, many feel that few current artists are stepping in to fill the coming void. Since less artists can fill 20,000 seat venues, people are turning more to theaters. Since record companies are having less of a role of breaking artists, the touring business is having to pick up the slack so promoters, agents, and venues need to rethink their roles to be more proactive about solving this issue. 6.) Competition. Overdeveloped markets are having trouble with more competition in other forms of entertainment than ever before. The challenge is balancing the budget of higher costs when higher competition causes smaller increases in revenue. 7.) The Big Picture. Buildings are at the mercy of the overall touring business. The marketplace is filled with blurred lines and undefined roles for the players, with no one knowing who is truly in control of the big decisions. The industry needs to be more flexible in moving towards a common goal based on a foundation of successful, long-lasting relationships.

Month: August

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As the future looms for Ticketmaster, the industry is watching closely to see what moves they will make to continue success after Live Nation leaves and goes from being their #1 provider of income to their #1 competitor. While Ticketmaster remains the top event entertainment website, they will have to deal with Live Nation becoming active in primary, secondary, fan club, VIP, presale and other developing ticket markets through its own website. Ticketmaster has responded with making some deals, including its purchase of secondary ticket vendor TicketsNow, which is helping them capitalize on a small, yet flourishing sector of the ticket market. While executives of Ticketmaster say they will never count out becoming a risk-taking company and look to make artist-exclusive deals and become a promoter, they say their primary source of revenue will still from ticket service charges. They are confident that their core strengths as a company will continue to bring them success in a competitive market.