The concert industry had a record year in 2003, taking in a whopping $2.5 billion in worldwide ticket sales and posting a 19 percent increase from the previous year. With strong-performing tours from Britney Spears, Bob Dylan and Sting under way, summer commitments from Ozzfest, Sarah McLachlan and Dave Matthews Band, and a potential fall outing from U2, 2004 seems likely to improve on last year’s success.
But many believe overall turnout is what matters, and it tells a different story.
Pollstar reported that unit ticket sales for 2003’s top 100 tours increased by 10 percent from 2002, accounting for $1.95 billion in revenue, or approximately 87 percent of all North American concert receipts. But continuing a years-long slide, attendance for the more than 13,000 shows reported to Billboard Boxscore in 2003 was down 8.6 percent, and off more than 32 percent from just four years ago. The average per-show attendance slipped to fewer than 3,900.
Taken into account with the lopsided revenue totals, the decline depicts an industry with a healthy yet limited top end that’s trailed by a sagging middle and bottom.
The inclusion of several liberally defined concert tours into the top 100 list unquestionably brightened the picture. Chief among these was Celine Dion’s “tour,” which never left Las Vegas’ Caesar’s Palace. With 145 performances and an average ticket price of nearly $136, Dion’s armchair journey accounted for a healthy chunk of revenue. In addition, non-concert productions such as “Riverdance,” “Lord of the Dance” and David Copperfield’s magic shows were factored into the top 50 tours.
But an assortment of tours played to lots of empty seats. A traditionally reliable tour market, Chicago had its fair share of examples. Beck performed to a half-empty UIC Pavilion, and The Strokes downsized their fall show from the UIC to the Aragon. The most recent Lollapalooza and Unlimited Sunshine package tours attracted more attention for their lack of an audience than they did for the music.
To entice concertgoers to see ZZ Top at Tweeter Center, promoters offered a buy one, get one free rate. Peter Gabriel agreed to cut his per-show fee guarantee to a paltry $300,000 from $600,000 so that ticket prices could be slashed in half. Even a summer double billing of The Dead and Bob Dylan couldn’t fill Joliet’s Route 66 Raceway, a venue smaller than Soldier Field that back when they were Grateful, the Dead sold out for several nights.
Few new artists
A growing problem shared by the concert and record industries is the lack of new artist development. Having gone on a building spree toward the end of the last century, metropolitan areas have an abundance of large venues and a dwindling supply of artists able to fill them.
Pollstar Editor Gary Bongiovanni maintains that the quandary stems from the major labels’ “shift to an immediate results model,” which was a direct result of consolidation and teen pop’s late ’90s success. Jerry Mickelson, co-owner and founder of Jam Productions, the Chicago area’s largest independent and fourth-highest-grossing promoter in the nation, agrees.
“The fundamental problem facing us is that the careers of musicians aren’t being built anymore. Today’s artists have shorter life spans. Labels need to create careers that promoters invest in, or we end up presenting a flavor of the month instead of an artist of the decade.”
Norm Winer, WXRT-93.1 Chicago program director and Infinity vice president of rock programming says “the current radio approach is to follow the major record labels’ hit-based strategy rather than sustaining an album.”
“In doing this, you’re not developing the caliber of artists with staying power or substance but exposing one-shot-deal talents that aren’t enough to attract crowds to pay concert-admission prices,” Winer says.
“This is bad news for concert promoters, and it’s different from when major labels used to allow artists time to develop and were willing to eat the costs of a debut album,” he says. “Now, if the record doesn’t sell, they pull the plug. It’s scary and depressing — there’s no patience or perspective.”
The last of the truly world-beating bands have either broken up or witnessed their popularity diminish. Nirvana and Smashing Pumpkins dissolved years ago. Down to one original member, Guns N’ Roses remains on life support after aborting its disastrous 2002 comeback outing. Pearl Jam and Metallica still draw large crowds on tour but have scaled back the number of shows they play, and their record sales are a small fraction of what they once were.
Pearl Jam performed two sold-out shows at Milwaukee’s Summerfest and one at Soldier Field during a four-day span in summer 1995, but on its last jaunt in 2003, it booked only one night each at the smaller United Center and Alpine Valley. Sales of the band’s last two studio albums failed to go platinum, whereas its first three albums have sold a combined 24 million copies. Likewise, Metallica sold-out three-nights at Allstate Arena in December 1991 and again in February 1997. Tickets remain available for the band’s upcoming lone August show at the same facility, while sales of its recent “St. Anger” album are less than that of any of its other studio records.
Dependent on older acts
Consequently, promoters are increasingly dependent on older acts to fill seats.
To gauge how dominant veteran (often Baby Boomer) artists have become on the concert circuit, all one has to do is look at Pollstar’s list of 2003’s top 10 grossing tours. Save Celine Dion and the Dixie Chicks, the other artists were well into their careers by the early ’90s. Of the remaining eight, Metallica was the only act to have debuted in the ’80s, having done so in 1982. Unless one counts former ‘N Sync member Justin Timberlake, who made his solo debut in 2002, the first 21st Century artist to crack the top 100 was gangsta rapper 50 Cent, at No. 22.
It’s a pattern that Bongiovanni has grown accustomed to. “This year’s list is nothing new versus last year’s or even the last 10 years. Our concern is that the rainmaker artists who have had the big fan followings over the decades will, primarily because of their age, start disappearing.”
Wondering who will pack arenas when Mick, Keith and company finally retire isn’t the only prickly issue plaguing promoters. The same graying contingent of artists largely responsible for delivering 2003’s recordyear is also liable for a cyclical progression of rampant greed and spiraling costs that has priced many fans out of the market, and which ultimately, threatens the industry with regression.
Over the past 10 years, ticket prices have risen to unprecedented levels. In 1993, according to Recording Industry Association of America figures, the average price of a ticket to a top 50 tour was $24.05; the 2003 average was $55.26, a 130 percent change that, adjusted for inflation, still represents a 50 percent leap. According to Pollstar figures, average admission prices for 2003’s top 100 tours rose by nearly 8 percent, to $50.35, over the previous year. These figures don’t include service fees, convenience charges or parking.
All tickets to the Rolling Stones’ September 1994 Soldier Field shows cost $50 each, while floor seats to the band’s January 2003 United Center concerts fetched $350. But that’s inexpensive compared with the $1,000 tickets sold to Alabama’s November 2003 “farewell” show at Allstate Arena, which included a front-row seat, a photo-op with the band and a guitar. (The group just re-upped with Clear Channel for another round of dates.)
Explanation for the cost escalation differs, but several industry experts concur that the primary factor driving the costs is how much money the artist wants to make.
Show me the money
“Ticket prices are set by the artist,” affirms Bongiovanni. “While younger bands realize that their fans don’t have a high income level and have more empathy for the crowd, older artists have no problem getting paid. In the ’60s and ’70s, you had to hold up your anti-establishment credentials and couldn’t charge those prices. But that’s all gone away. The VW buses are now Beemers.”
Mickelson has observed the same shift. “It used to be that all bands wanted to keep their prices reasonable, but now the mantra is `show me the money’ and take what you can get.” As a result, “people are speaking with their wallets because they can’t attend as many shows.”
Gelman explains that ultra-expensive productions such as Simon & Garfunkel ($250 per top ticket) and The Eagles ($175) are draining everything else, and causing a false read on the industry. Several big-name artists with current tours declined to comment for this article, including Neil Young and David Bowie.
“Although grosses are up, overall attendance is down. Because prices have gone so much higher, people who used to go to six shows a year now go to three. Others pick one or two. It’s a hard decision.” To date, these circumstances have resulted in a growing disparity between tour haves and have-nots, with a minority of players receiving a disproportionate bulk of the revenue pie.
John McEntire, member of the critically acclaimed Chicago quintet Tortoise, says his band keeps value in mind when determining prices. While advice from promoters and agents are factors, McEntire says “we look around and see what the market will dictate, but don’t feel comfortable charging inordinate amounts.” Tickets to Tortoise’s forthcoming tour average between $14 and $16, topping out at $20 to $22 for the largest markets.
Rather than artist avarice, Gelman believes that the perpetual boost in show size is chiefly responsible for the price upsurge for big-name concerts. Technological advances in sound, lighting and production have translated into tours requiring additional labor, trucks, gas, food and equipment, all of which add up to extra expenses.
“Tours have gotten huge,” he says. “The average hanging weight for sound amplification now ranges between 40 to 50 tons. Eight years ago, it was 10 to 20.” Hanging weight includes lights, speakers and any other equipment hanging from stage rafters. However, Gelman concedes that one of the reasons behind these moves is a sense of competition among bands, or who can fit the most LCD displays onstage.
This one-upmanship extends to the actual pricing itself, which Bongiovanni claims has stretched the acceptable limits and left little room for error. “There are a lot of egos in what is a limited market. It amazes me that the pool of people buying $250 tickets is as big as it is. Revenues are going up, but the money is going to the artist.” Meanwhile, profit margins for promoters continue to shrink. “If they’re spot-on and it’s a sellout, they only make a small amount of money. Today, a promoter might need eight sellouts to cover for one miss, or lose on an arena show that’s at 80 percent capacity.
“The barrier of entry is much higher, and the number of players has shrunk due to corporatization from House of Blues and Clear Channel,” Bongiovanni adds. “Artists like it because they get big checks, but if and when Clear Channel cuts its willingness to pay those fees, the artists might change their opinion.”
Renowned for buying up independent promoters and tours, Clear Channel’s actions have generated accusations that the media giant is trying to control the market so it can drive up prices.
But Clear Channel President Gelman maintains those charges are baseless, noting that competition in a marketplace causes several parties to bid for one event and, “Sometimes, one promoter is willing to pay more.”
He also stresses a concert’s entertainment value. “Concerts are one-time events that are here for one night, which means their value is that much greater than a baseball game that occurs 80 or so times a year.”
The industry’s present maladies are too complex to be attributed to single source. Frustrated concertgoers looking for an initial reason ticket prices soared would be better served targeting scalpers, who often sell tickets at three times their face value.
Technically, scalping is illegal in Illinois, but licensed ticket brokers who charge indiscriminate service fees are permitted.
Bongiovanni contends that scalpers were the first to lead artists to believe that concerts were worth more than what they were charging. And because the public continues to meet the scalpers’ asking price, they in turn deem that the elevated rate is the market’s true value.
In 1994, this trend prompted The Eagles to become the first band to break the $100 ticket barrier, a move that at the time many predicted would be disastrous. But the group’s “Hell Freezes Over” excursion was a smash, and ever since, big-name artists keep raising the bar without experiencing any drastic attendance falloff. The Eagles also introduced so-called “gold-circle” seats and tiered pricing, or multiple ticket prices based on seating location for each concert.
According to Bongiovanni, up until then, tickets were almost always one price. Now that’s the exception. Since no one wants to be stuck with the less-privileged seats, the demand for prime tickets remains high, while the “gold-circle” regions keep expanding.
Keep prices reasonable
“The key to putting more people in venues is keeping the prices reasonable,” Mickelson says. “If more artists did that, the industry would be healthier.”
Performers that follow this ideal have posted numbers that support Mickelson’s logic. Pearl Jam, Radiohead, John Mayer, Toby Keith, Kenny Chesney, Coldplay, Foo Fighters and Red Hot Chili Peppers are all platinum-selling acts that kept 2003 average ticket prices under $40 and had outstanding tours. This custom is one reason jam bands such as String Cheese Incident and Widespread Panic have built dedicated followings, and why they are valued by fans and promoters.
To this extent, Gelman would like “to go back to what worked with putting three developing bands on the same bill for $15.” Such shows take place regularly at small venues such as Double Door and Metro, but are scarce at large arenas. One reason is that record-label support money, which used to fund such ventures, has been cut or completely withdrawn.
Another is the decline of record sales. To compensate for what they are losing in music sales, artists are relying on tours and often charging more.
“Originally, touring was a break-even proposition. Now it’s totally reverse of what it used to be. The demise of record labels and public-relations machines means that a band often promotes itself.”
Tortoise’s McEntire agrees, having experienced the shift from touring as primarily about promoting a new record to touring as having become a more central part of making a living.
“Recordings have less intrinsic value,” he says. “You can get them for free with just a little bit of effort. But the positive trend is that more people are putting more worth in live music, resulting in an emphasis on performance that was somewhat overlooked in the past.”
As artists feel the pinch of tightened budgets, smaller contracts, limited studio time and other cost-cutting measures instituted by budget-minded record labels, they are looking for other revenue sources. The most accessible are touring and band-related merchandise.
As McEntire puts it, “You have to deliver onstage.”
To this extent, artists are using their Web sites to e-mail fans privileged information about concerts, news and exclusive goods.
The Grateful Dead pioneered the grass-roots approach in the late ’60s with mail-order ticketing and newsletters. In the ’90s, Pearl Jam took it to a new level with its Ten Club, the popularity of which factored into the band’s decision to terminate its 13-year relationship with Epic Records. It’s become the model hundreds of artists follow, especially as more become involved with the peddling of live-concert discs, a practice started by the Dead and updated by Pearl Jam and jam bands. Metallica and Buddy Guy are the latest to realize the quick and easy revenue potential from soundboard recordings that fans previously had to purchase from bootleggers.
Word-of-mouth buzz
But as musicians progressively bypass conventional methods of contracts, promotion and distribution, they are discovering that practical pricing has its own rewards. Metal, hip-hop and indie-rock artists have long known that good press and word-of-mouth buzz are more effective than big-budget advertising or videos.
And while increased radio support of new music would be welcome, bands such as My Morning Jacket, Queens of the Stone Age, Shadows Fall and Drive-By Truckers found moderate success by playing as many accessible shows as possible. Though these aren’t arena names, many of those who are — Tool, Red Hot Chili Peppers, Slipknot, No Doubt — traveled the same path.
Not surprisingly, package tours that stand out in the overcrowded market have newfound popularity. Even nostalgia-rockers Aerosmith and Kiss realized teaming up would result in a bigger draw than headlining separately. The twosome’s 2003 tour was one of the few to outperform expectations and add extra dates. Sting and Annie Lennox announced last week they will tour North America together this summer.
Initial reports have this year’s Ozzfest, boasting 14 hours of music and its best lineup in recent memory, charging fees similar to and less than last year’s edition. By offering fans the opportunity to meet second-stage performers, Ozzfest has also helped newer bands overcome exposure obstacles.
But the package tour frequently mentioned as the one to imitate is Vans Warped, which for $25 features eight-plus hours of music, more than 60 punk and pop-punk bands on multiple stages, and skateboarding activities.
In 2003, Vans Warped played to 45 cities, selling an average of 11,644 tickets per show. It grossed $13.4 million.
Bongiovanni admits that he doesn’t know how it makes money, but credits “the great buzz it creates among the artistic community.” A beneficial consequence of people voting with their wallets and refusing to flock to acoustically challenged arenas, more artists are playing multiple-night stands in smaller venues. In the past year, Tom Petty, David Bowie and Neil Young have deliberately retreated from stadiums to theaters, and though tickets have ranged up to $85, it’s a price that fans — thrilled to see artists return to intimate confines — are willing to pay.
As nostalgia-based artists creep into their late 50s and 60s, it’s conceivable that with its assurances of a big payday, relaxed schedule, glitzy accommodations and warm climate, more will join Celine Dion and Elton John in the desert. Imagining Motley Crue at Circus Circus or Rod Stewart at Bellagio isn’t all that far-fetched.
No matter what happens, everyone agrees that things must change. The alternative? To Gelman, there isn’t one. “We either adapt and create, or we die.”
