Reminder: Big Concerts Are Not All Of The Live Music Business

from the small-shows-are-doing-well dept

Whenever we discuss examples of successful bands who utilize live shows as part of their business model, or when we point to data about how live revenue is growing, people often focus just on the data available for "big concerts" in arenas and amphitheaters. For example, last year, we wrote about a research paper claiming that live revenue couldn't replace recorded music sales revenue. While an interesting bit of research, there were a few problems with it. First, we certainly have never claimed that live alone is the business model for musicians. Live is one component that seems to work well for many, but most of the business models we talk about involve a variety of revenue streams. Second, as we've shown recently, the "recorded music" revenue tends to go almost entirely to the record label, not the artist. So, from an artist's perspective, they're usually not "replacing" very much. But, most importantly, the data itself seemed to only focus on giant concerts: the kind that plays at arenas and amphitheaters. This sort of data is out there, but it's not everything. Yet, with various reports of financial problems at Live Nation, some critics are rushing around to claim that all the folks who said "live" would "replace" recorded music revenue were clearly wrong. In fact, we've had one critic submit about 30 such stories.

But, of course, while Live Nation has something of a death grip on arenas and amphitheaters, that's not how most musicians play live. Ian Rogers points us to a wide-ranging, but quite interesting, interview with indie band booking king Tom Windish, where he notes that in the realm he's working in, things are fantastic. It's in the middle of the interview, where he's asked about whether the business is "hurting":
Are promoters hurting this year?

We're not. It seems that Live Nation is. I don't really pay attention to the side of the business that is arena or amphitheatre driven. People are excited about seeing a lot of our bands. I hope more of them get popular. That would be great.

What's hurting the live business overall?

It's a combination of things. The price (of shows), and the surcharges; I think that's what is souring people the most. They are ridiculous.

Most of your roster works with cheaper ticket prices.

Yeah, I would say that most work in the $15 to $20 range before service charges are applied which are very high.
There are two key points in there concerning live music. The first is that his business -- which represents a ton of top independent acts, isn't hurting. We've spoken to a bunch of musicians who fit into that same category, and keep hearing basically the same story. If you're in the range where you're performing clubs and small theaters at $15/$20 a head, and have a decent fanbase, you can do quite well.

The second point, of course, is the sheer inefficiency of the ticketing process that has allowed middlemen to add all sorts of annoying fees and surcharges. It still seems like that's an area ripe for change.

Later in the interview, Windish makes another point that we've discussed in the past as well. "Live" doesn't necessarily mean having to go all the way around the country. It can really mean building up a really strong local audience, and gradually expanding it. That was a key part of Corey Smith's successful strategy, in that he kept touring locally, and kept slowly expanding his geographic footprint. Even today, his (massive) success is still located mostly in the southern US, and he's admitted that the next step is to slowly start to expand into the northeast. In the interview here, Windish makes a similar suggestion for bands. After talking about how many bands mistakenly just focus on playing big "festivals," the interviewer and Windish point out that building up a local audience (i.e., the old fashioned way of doing things) still works:
If a band doesn't land a festival, it can work within a region and explore opportunities.

That's a good way to do it, too. That's kind of an old school way of doing it. We have a lot of bands, especially foreign bands, that will come here and focus on New York for a week. Then, they go home to France or the U.K. and keep playing where they live. Then they come back here, play New York more, add in L.A. and, maybe, add in Toronto. Then they will go back and work in Europe again. The buzz that is generated in Europe will trickle over here pretty much immediately.
The point is, there are lots of interesting strategies that various acts can use to be successful well playing live shows -- and simply assuming that "live doesn't work" because Live Nation is having a down year sort of misses the point.


Reader Comments (rss)

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    Anonymous Coward, Jul 27th, 2010 @ 10:17pm

    big venue tickets are a ripoff. i can see 10 times as many bands at little local venues for the same price, and these aren't no-name acts, either.

     

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    Anonymous Coward, Jul 28th, 2010 @ 3:23am

    Cool, thanks for this article! One more thing to add: A lot of the bands touring also still sell quite a lot of CD's. Recently I read an interview with the Slovak band Longital (http://www.longital.com). They also have their own small label. They are saying they sell more and more CD's. Maybe the "death of CD" is not yet there really, people just don't buy them in shops anymore, but on shows.

     

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    Vincent Clement, Jul 28th, 2010 @ 4:08am

    Interesting that Live Nation talks about ticket prices possibly coming down - something that hurts the bottom line of the artist - but there was no discussion about a reduction in the fees that Live Nation charges.

    Fans, don't mind paying money to see an artist. They do mind paying $20 or $30 in convenience charges. Live Nation will mail out your ticket for free but will charge you $2.50 to print your own ticket.

     

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    JustMe (profile), Jul 28th, 2010 @ 4:24am

    Enter The Haggis!

    This small band has done exactly the same thing. They play local gigs frequently and they go on the road for a few shows in nearby cities every month or two. They aggressively promote their tours and have a larger-than-normal bunch of logo'd merch, which is also free advertising. This strategy allows them to reach a lot of new people while cultivating their local fan base.

    Plus, they put on a great show. http://www.enterthehaggis.com

     

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    Anonymous Coward, Jul 28th, 2010 @ 7:09am

    reduction in surchagres has been needed for long time

    Companies like ticketmaster have been raping fans for a really long time. They also have near monopoly control of certain venues and markets. I have to agree with Vincent too, mailing tickets for free while charging you to print your own is crazy. These companies are hurting themselves and the bands they claim to represent.

     

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    McChalium (profile), Jul 28th, 2010 @ 3:27pm

    Local Live is great fun.

    For one thing you are in a smaller venue, chances are you can actually hear the music and enjoy it. You might also get to meet a performer up close and personal. You may find out they are more accessible when they don't need a small army of security guys to be safe. And you yourself do not have to submit yourself to the possible hazards of attending a large venue such as the stampede that recently occurred in Germany.
    For another thing, you are not handing out your hard earned money to a bunch of crooks who add nothing (except disgust)to the experience.
    BTW Greyhound has apparently taken lessons from those guys. On top of the basic fare they add what seems like an endless list of gotcha fees. They even have a "window fee" if you buy your ticket at the station.

     

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    Dr Huge, Jul 28th, 2010 @ 5:10pm

    Hollistic is everything ...

    Mike, you're quite right about the state of the live industry. The obsession of most analysts with attaching definitive meaning to single aspects is nauseating. It happens as you note above, it happens with regard to recordings, it happens with regard to licensing ...

    Analysts (and Indies) need to keep everything in perspective and make sure they get the full picture of what's happened, what's happening and what's possible. Don't let any single piece of the puzzle represent the whole ...

     

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    Rosedale (profile), Jul 29th, 2010 @ 8:24am

    It's about the price

    The price is the key point that I come too plus the venue. My favorite venue in Boston is the Paradise club. They'll get top notch indie artists but the venue holds at tops 500...my guess closer to 250. The price is never over $20. And the best part is that there isn't a bad place in the joint and it is kind of more intimate with the artist. I just recently went to the house of blues for Modest Mouse. Typically I avoid that place because while it is larger and tends to get bigger bands the venue is shit...absolute shit. But the tickets were free so I went only to remember how much I hate the venue...plus the tickets were closer to $40.

    Now I don't know, but when I realize that for the total of one ticket at House of Blues I can get two tickets at Paradise club and still see the bands I like I almost always do the latter. It worked out great for me once. I wanted to see Dirty Projectors. The first concert they came through was at House of Blues. Tickets were closer to 40, so I opted out of the concert. A few months later they came to the Paradise Club. Paid $20 stood closer and had a much more enjoyable time I'm sure.

    Another venue in Cambridge is the Middle East club. This probably panders to even smaller or less known bands, but typically it is $15-20, but includes 3-4 acts. The show I went to the band I liked performed 3rd and after they were done they stood in the audience with us...dancing and having a good time. I still remember the experience to this day.

    Of course those are the prices before your booking fee, printing fee, and whatever other fee they decide to throw at you. I've thought about seeing if purchasing the tickets at the venue would avoid the price, but haven't done so yet. For paradise a $20 ticket usually gets an extra 5 or 6 added on per ticket. Still a lot cheaper as a total price then other venues, but I hate the fact that they do that.

    Last thing to add. I also got free tickets to go to a U2 concert...normally wouldn't. Now this was at the Patriots stadium. The tickets were only 25 or 30, but we were like 3 rows from the top of the stadium. The sound was so horrendous with the echo that you couldn't understand a word he said...and if it weren't for the large screen's we wouldn't have been able to tell Bonno from any other spec dancing on the stage. We tried to move up, but yea they were bitchy about that whole thing. I really shy away from large venues as a result. Even if were a die hard fan of U2 in order to get good sound I'd probably have to shell out upwards of 80-100 just to avoid the echo. But for $20 I can see world class acts that I actually enjoy in a venue where bad sound isn't even an issue.

     

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      Suzanne Lainson (profile), Jul 29th, 2010 @ 9:39am

      Re: It's about the price

      I never go to concerts in large venues. I like to see acts when they are still playing smaller clubs.

      Price is definitely an issue for the big acts, but I'm also seeing bands in the smaller clubs lowering prices, too. What was once a $10 ticket is now a $8 or $6 ticket. So it is possible that economic conditions are affecting concerts at all price points. I haven't seen any industry-wide figures on what's happening to music in bars and small clubs, but I have seen ticket prices dropping even at the cheapest levels. And of course in cities with an abundance of musicians, getting no cover is often the norm.

       

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    Suzanne Lainson (profile), Jul 31st, 2010 @ 7:10pm

    Will lower prices be pushed all the way to the club level?

    It will be interesting to see if heavy discounting of the bigger shows will impact the smaller shows. People may wait until the last minute to see what's the best deal.

    As I said, I've noticed that there has been some softening of prices for local and smaller touring acts, but I haven't seen any research to confirm that industry-wide. Perhaps what was once a $30 ticket is now a $20 ticket. What was once a $20 ticket is $15. What was once $10 is now $8. Etc.

    Summer Concert Ticket Sales Decline - NYTimes.com: For lawn tickets to the next Lilith Fair stop, at PNC Bank Arts Center on Saturday, for example, the regular price is $37.75. Live Nation was also offering a special deal of a pack of four lawn tickets for $75; with service charges they cost a total of $112.20. But on Wednesday, when the company's latest sale took effect, those same four lawn tickets were $40 flat."

     

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