Are New Music Tiers Segregating Fans?

from the hasn't-that-always-happened? dept

Chris O'Donnell alerts us to a post from someone who originally thought things like Trent Reznor's massively successful Ghosts I-IV business model experiment was a good thing, but who is now worried about the eventual consequences of somehow segregating fans. The argument is that only a small group of true fans will buy these really high end offerings, that include certain things that other true fans will recognize, making them part of an elite tribe. The fear is that these tribes will exclude those who don't pay up for the super duper deluxe versions.

It's an interesting theory, but I don't think there's much to support it in reality. First of all, as a recent excellent Hypebot piece explained, true fan tribes are nothing new, nor is the fact that many will shun outsiders or newbies until they've really shown themselves worthy of acceptance. So I don't see how this is particularly different. Also, a lot of these super deluxe packages aren't necessarily about stuff you can "wear" that would be noticeable in gatherings. On the whole, it just doesn't seem like that much of a problem. There will always be elitist fans and some will always snub less enthusiastic fans. I don't see how that changes now that those more enthusiastic fans have more ways to support the artists they love.


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    The Anti-Mike, Dec 24th, 2009 @ 5:22pm

    Tiers in concerts as well

    The idea of segregating fans is pretty much what I have thought of all of the "give the music away for free, charge more for everything else" theory. To make up the money lost in one place, the price of other stuff goes up.

    This concern comes out in studies like the UK and Sweden, where the total consumer dollars being spent from 2004 - 2008 didn't move much, but those dollars have shifted to live and away from recorded music. Now, even by Mike's own standards, concerts are a scarce good. For the income from concerts to have gone up 30%, either performers did a whole lot more concerts, or they charged a whole lot more for tickets.

    In the UK, it is clear that acts like Bon Jovi and Madonna have gone down the road of massively raising prices, Bon Jove selling tickets at a rate that was totally scary (I think it was upwards to $400 us per ticket), and Madonna was in the same place. Many of the UK summer festivals are sporting ticket prices in the same range as well.

    The concern would be that the high cost of "fandom" may be beyond many of the real fans. While the concerts are still selling, the prices appear to be in many cases very close to what scalpers would be selling them for. While I don't have any proof to offer, I would have to say that prices like that would marginalize many fans.

    Think about it: at $400 a seat, if you attend 6 concerts a year (different bands) you would spend $4800 for two of you to attend those shows. If disposible entertainment is 10% of your income, you have to be making 50k a year just to keep up. It doesn't take much to think that maybe a significant amount of the active fan base aren't making enough to afford even 1 or 2 shows a year at that price.

    In the end, if people cannot afford to be a fan, will they still do it?

     

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    The Mad Hatter (profile), Dec 24th, 2009 @ 7:14pm

    Ah, but you both are missing the point

    The entire concept is an excuse to try to block bands from 'monetizing their brands' other that through the 'egalitarian record companies.'

    Just think - live venues have been available only to a limited number of fans from the beginning. I went to see Deep Purple once, there were about 14,000 people in attendance, EVERY seat was sold out. The venue was in a city that had 2,000,000 population at the time. Did Deep Purple stick around so that every possible fan could see them? No, it was billed as our only chance to see them in Toronto. Ever.

    Was this egalitarian? No. Have live venues ever been egalitarian? No.

    We didn't hear this type of complaint when the Beatles record company managed to book the band on the Ed Sullivan show in 1964 even though only the rich could afford color TV sets, and many middle class homes lacked black and white sets at that time. No, they make this argument when they are in danger of losing control of the business that has made many of them very well off, often at the expense of the artists who they claim to represent.

    It all comes down to money. If Madonna is making more money off touring than recording an album, she will tour, and the record company looses album sales. They want her in the studio recording, not on tour where they can't 'monetize her brand.' Of course the 'egalitarian record companies' aren't concerned about those who can't afford to buy a CD. Only those who can't afford to buy concert tickets. Curious that.

    Sorry if I got a bit long winded - I've been wondering what the next attack vector would be, and this appears to be it.

     

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      The Anti-Mike, Dec 24th, 2009 @ 9:29pm

      Re: Ah, but you both are missing the point

      We didn't hear this type of complaint when the Beatles record company managed to book the band on the Ed Sullivan show in 1964 even though only the rich could afford color TV sets, and many middle class homes lacked black and white sets at that time.

      A meaningless argument. A TV wouldn't have been bought to only be used for two hours and thrown away. I would say that almost every middle class house at that time had at least some sort of TV, or access to one (friends, family, etc). The cost of the TV doesn't in any way equate to an over priced concert ticket.

      . If Madonna is making more money off touring than recording an album, she will tour, and the record company looses album sales. They want her in the studio recording, not on tour where they can't 'monetize her brand.'

      Madonna signed with Live Nation, which gets money on either side, they don't care. But Madonna knows that putting out new material and getting chart topping songs is a great way to drive concert ticket sales. It's just too bad that the price of seats for her concerts is out of the reach of most people, in the range of food for a couple of months for a single man.

      Live Nation is concerned about both sides, and are working to take over ticketmaster so they can just about monopolize the whole deal. They make the 'egalitarian record companies' look like wimps.

      Live concerts aren't egalitarian, and nobody is suggesting that they should be. But when the price is pushed to the absolute limit (in your Deep Purple case, setting the price so only 14,000 out of the 2 million people could afford them) isn't exactly a smooth CwF move. That the average teenage music fan can't afford to attend a concert is a crime. Yes, supply and demand says the price can be that high, but it is short term gain for long term loss, as people learn to stop even dreaming of attending over priced concerts.

      That isn't egalitarian, that is just good business, not greedy business.

       

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        zellamayzao, Dec 25th, 2009 @ 6:27am

        Re: Re: Ah, but you both are missing the point

        And for the most part I think with Ticketmaster and LiveNation, they kinda got the artists by the balls as well. If they want to sell tickets for a nationwide tour and hit the popular venues its easier for them to hook up with these two and they charge outrageous booking fees, and convenience fees, printing your e-ticket fees, another convenience fee or 2.

        So it may not be that the artist (speaking of smaller artists, not the elite stadium artists whos peak was 10-25 years ago but still hang around doing a world wide tour everyother year) charge the arm and leg and alienate potential fans from seeing them....they may be put off by the outrageous charges associated with buying from Ticketmaster and LiveNation.

        My wife and I tried seeing a smaller band in Philly a few months back. Ticketmaster listed ticket prices at 17$. We needed two...35$. By the time we were ready to complete our order....60$ We didnt purchase the tickets because thats just insane. We spoke with our wallets at the punishment of the band we were trying to support. Its not that 60$ was too much to afford or what have you, its the matter of the fact Ticketmaster almost doubled the price just for using their service. I know they need to make money too, but thats just criminal.

         

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        Kaden (profile), Dec 25th, 2009 @ 9:25am

        Re: Re: Ah, but you both are missing the point

        Um, the 14,000 seat Deep Purple venue sold out... that's not the same as "setting the price so only 14,000 out of the 2 million people could afford them".

        Stupid much?

         

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          The Anti-Mike, Dec 25th, 2009 @ 10:55am

          Re: Re: Re: Ah, but you both are missing the point

          You missed the point, I asked:

          But when the price is pushed to the absolute limit (in your Deep Purple case, setting the price so only 14,000 out of the 2 million people could afford them) isn't exactly a smooth CwF move

          Yes, the Deep Purple show you attended sold out (and then some), but what if they could manage to find the perfect price point where exactly 14,000 tickets are sold at the highest price possible, where there are only 14,000 who both want to attend the show and are willing to pay antyhing to get there?

          Bon Jovi at $400 a ticket is likely to sell out, but only just, as they are probably very close to the limits of what enough people will pay. But even at that, they leave many of their fans out in the cold, not from a lack of seats, but because they don't have enough disposable income to justify about $200 an hour per person to see Jon singing.

          For me, that is a major failure of the system, and as I mention further down the page, it almost creates a paywall or walled garden effect, where only the few who can afford to pay end up inside, and everyone else is locked out. That isn't a very good system for connecting with fans, is it?

           

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    zellamayzao, Dec 24th, 2009 @ 8:15pm

    I think.....

    Its an artist's privilege to offer a more scarce good at a higher premium to a more dedicated fan. If they have something that a person is willing to spend and arm and a leg on then more power to that fan. It is their way of CwA (A for Artist) and having a RtB. Like the article said there will always be the long-time, hardcore dedicated fans that feel they are elite in their love of a certain band over "newbies" that only found out about them after their latest cd release.

    There is a particular band I have been listening to for years and have purchased all of their cd's. Seen them numerous times live, have a t-shirt of theirs for everyday of the week and even went so far as to have their logo tattooed on myself. Spent almost 150$ on their first 3 7" ep's. I am an elite fan I guess you could say. I think I've earned that title. Do I still think I am more dedicated than some others who havent been listening to them as long as me....yes. But at the same time I am also happy that they listen to them at all because thats what keeps this band making music. New fans.

    Its a form of segregation, but if the truly elite fan is willing to pay for something a casual listener isn't then more power to them.

     

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    Anonymous Coward, Dec 24th, 2009 @ 9:08pm

    These "true fans" are usually arrogant assholes, completely full of their own shit.

     

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    The Anti-Mike, Dec 25th, 2009 @ 7:28am

    High Ticket Prices = Paywall?

    I hate the term paywall, but I got to thinking...

    Is an excessively high ticket price for a concert the same as a paywall for a website?

    Would a high ticket price have a similar effect as a paywall, limiting the public's access and effectively cutting off the vast majority of users who aren't willing or able to part with significant money to get access? In the past, ticket prices were high but passably acceptable, where the vast majority of people could afford them, and the limiting factor was seats available. Now, with such steep prices, many fans end up self-excluding from the process because they cannot even dream to pay the price.

    Thus, I think that high ticket prices are the paywalls of music, a dead end.

    I can't help but wonder if this is one of those indications that the whole "free music, expensive rarities" isn't a fully functional business model, because it leaves so many fans on the sidelines and out of the game, which might kill any connection that is made.

     

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      Luci, Dec 25th, 2009 @ 11:05am

      Re: High Ticket Prices = Paywall?

      You're arguing that only the expensive rarities make the connection when it's the music that makes the connection between fans and artists. Fans will always find a way to support their favorite artists, even if it isn't through the massively expensive live venues (which ultimately do not end up being the artists' fault, especially with Ticketmaster).

      Sorry, still not buying your FUD, but you are making interesting arguments.

       

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        The Anti-Mike, Dec 25th, 2009 @ 12:01pm

        Re: Re: High Ticket Prices = Paywall?

        Actually, I think that super high ticket (and merchandise) prices are effectively killing whatever CwF is made by giving the music away. While the biggest fans may still shell out $400 for a ticket or $75 for a shirt, I have a feeling that this is creating a gap similar to putting up a paywall, blocking out those who cannot afford to pay.

        So a band builds up a big fan base, comes to town, and only the to 2% of the fans who can afford the show can go, rather than 2% of all fans going. Yes, it's the same number of people attending, but perhaps the wrong ones. Money is no indication of true fandom, only that you have more cash to spend than others. So the band potentially shuts out it's best fans, or younger (and less affluent) fans who may still be on the upswing of fandom. You create a gap, you make them feel a little like they don't belong completely, and maybe they aren't such a rabid fan anymore.

        It comes back much to the idea I have always had: you can get $10 for 100 people, or $1000 from one. The net is the same, but only one connects you to 100 people. One is a very short term way to fill your pockets, and the other is a more long term play to have reasonably full pockets for a long time.

        Mike attacks the paywall theory for websites all the time, and I am starting to wonder if higher ticket prices hasn't created a paywall for fans.

         

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          Mike Masnick (profile), Dec 27th, 2009 @ 12:10am

          Re: Re: Re: High Ticket Prices = Paywall?

          Actually, I think that super high ticket (and merchandise) prices are effectively killing whatever CwF is made by giving the music away. While the biggest fans may still shell out $400 for a ticket or $75 for a shirt, I have a feeling that this is creating a gap similar to putting up a paywall, blocking out those who cannot afford to pay.

          The problem Anti-Mike is running into is that, once again, he assumes everyone is as uncreative and as clueless in business as he is. But they're not.

          One of the best CwF things we've seen is opening up cheaper pre-sales tickets to core fans. So if you're a member of the fan club, you get first access to the best seats at a much cheaper rate. It's everyone else who pays the high prices.

          It works great.

          As for the comparison to the paywall, this is a classic TAM misunderstanding. "Paywalls" make perfect sense for scarce goods. All scarcities have a "paywall." It's the non-scarce goods where it makes no sense. It's odd that he would act confused by this, considering I thought I explained it to him just a week or so ago. Funny how TAM has such a short memory.

           

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            The Anti-Mike, Dec 27th, 2009 @ 8:58am

            Re: Re: Re: Re: High Ticket Prices = Paywall?

            Mike, wonderful post. Not only did you manage to ignore my points, but you managed to smear me and call me an idiot (in a nice way). You have a total skill for not addressing the issues.

            The concept is simple: While supply and demand says they can raise ticket prices to the point where only the needed number of people can afford to attend the concert, is this not going directly against the idea of CwF? It gets back to basic greed, nothing more and nothing less. With companies like Live Nation and their 360 deals, this seems to be more and more of an ongoing practice.

            Are there bands who sell their tickets for less? A few. Even then, they are taking the current insane price, and lowering it somewhat, but the tickets are still very expensive. Worse, I have a feeling that when this is done, the retail ticket prices are artificially even higher, as supply and demand has again stepped in and moved the bar a little higher. Again, while you may see a few bands doing this, most are not, and even then, the ticket prices are still higher than they should be.

            Worse, if the fan base is big enough, such that all of the tickets would be sold at "fan friendly" prices, it is likely that the program would either be discontinued, or the fan friendly price raised to make up for the losses on selling discount tickets.

            It's a basic business concept Mike, you know, in the real world? If you give half the tickets away at half the price, the remaining tickets need to sell at 1.5 times your target price to make it up. If you sell all your tickets at half price, you lost half your income, or you have to fudge the original price to make the half price tickets actually match your goal price.

            So when I talk about a paywall, it's the concept of a monetary barrier to entry. Raising ticket prices by applying supply / demand rules as an absolute would seem to be a barrier designed to keep people out, not to encourage them in.

            It would seem that much of the CwF mentality runs square against the methods used to pay for it. If you are selling everything as scarcities at "what the market will bear for a limited run", you either exclude many of the fans, or you are bleeding them dry.

             

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    The Mad Hatter (profile), Dec 28th, 2009 @ 4:06am

    The Anti-Mike doesn't understand 'access'

    We didn't hear this type of complaint when the Beatles record company managed to book the band on the Ed Sullivan show in 1964 even though only the rich could afford color TV sets, and many middle class homes lacked black and white sets at that time.

    A meaningless argument. A TV wouldn't have been bought to only be used for two hours and thrown away. I would say that almost every middle class house at that time had at least some sort of TV, or access to one (friends, family, etc). The cost of the TV doesn't in any way equate to an over priced concert ticket.

    No, it's not a meaningless argument. There were those who had 'access' and those who didn't have 'access'. Those who had access were able to watch, those who didn't missed out. Just as those who have tickets to an event see it, and those who don't have tickets don't see it.


    If Madonna is making more money off touring than recording an album, she will tour, and the record company looses album sales. They want her in the studio recording, not on tour where they can't 'monetize her brand.'

    Madonna signed with Live Nation, which gets money on either side, they don't care. But Madonna knows that putting out new material and getting chart topping songs is a great way to drive concert ticket sales. It's just too bad that the price of seats for her concerts is out of the reach of most people, in the range of food for a couple of months for a single man.

    You do take things literally, don't you? How about Sir Paul McCartney? Avril Lavigne? The Rolling Stones? K-Fed? Urban Terrorists?

    Live Nation is concerned about both sides, and are working to take over ticketmaster so they can just about monopolize the whole deal. They make the 'egalitarian record companies' look like wimps.

    Live concerts aren't egalitarian, and nobody is suggesting that they should be. But when the price is pushed to the absolute limit (in your Deep Purple case, setting the price so only 14,000 out of the 2 million people could afford them) isn't exactly a smooth CwF move. That the average teenage music fan can't afford to attend a concert is a crime. Yes, supply and demand says the price can be that high, but it is short term gain for long term loss, as people learn to stop even dreaming of attending over priced concerts.

    In that case they will loose business. I will only pay so much for a concert ticket. Anything beyond that, and I'll go sit in my studio, and record something.

    That isn't egalitarian, that is just good business, not greedy business.

    If a band prices it's fans out of the market, it is greedy business. Fans are what make things work.

     

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      The Anti-Mike, Dec 28th, 2009 @ 7:20am

      Re: The Anti-Mike doesn't understand 'access'

      it's not a meaningless argument. There were those who had 'access' and those who didn't have 'access'. Those who had access were able to watch, those who didn't missed out. Just as those who have tickets to an event see it, and those who don't have tickets don't see it.

      It is meaningless because the ownership of a television is something that the bands do not control. They couldn't lower the price of televisions just for their show, could they? Concert ticket prices are something that the band can control, and that is a very different animal.

      You do take things literally, don't you? How about Sir Paul McCartney? Avril Lavigne? The Rolling Stones? K-Fed? Urban Terrorists?

      What about them? Sorry, I am not a mind reader, where are you going?

      In that case they will loose business. I will only pay so much for a concert ticket. Anything beyond that, and I'll go sit in my studio, and record something.

      The point exactly. As long as there are 14,000 butts in 14,000 seats at the maximum price possible, your voting by not buying is meaningless. So ticket prices can be raised until there is only just the needed amount of sales with little or no extra demand, and things are still right. In fact, that would be the perfect maximal price, which is what most of them are aiming for.

      If a band prices it's fans out of the market, it is greedy business. Fans are what make things work.

      At $400 to see Bon Jovi, I would have to say that the moment has been reached and passed. But my overall point is that excessively expensive tickets are part of parcel of the process of moving to a "free music, expensive rarities" model. As long as there are 14,000 fans to fill the seats at the given price, everything is fine, even if 200,000 fans couldn't afford to see the show.

       

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    Peter Tanham (profile), Jan 7th, 2010 @ 7:57am

    The creation of a core tribe with an effective entry fee seems like just another great RtB. It seems like a good development, rather than a problem to me.

     

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