After a significant downturn in its fortunes last summer, the live music touring business is hoping for a shot in the arm with a healthy roster of acts hitting the road this summer. But to steer things back on course, the biz also has some changes in store that may well prove precedent setting, including experiments with tour packaging, pricing and sizing.
Historically providing approximately two-thirds of the concert industry’s yearly revenue, the live music industry’s summer season suffered a number of high-profile busts and disappointing returns last year, but signs of improvement are on the horizon. For one, U2 — whose 360 Tour last week became the highest-grossing tour ever — is back on the road. Kenny Chesney, one of country’s most reliable live draws, is back onstage after a year off, and multiplatinum singer Taylor Swift remains a top draw.
According to Mark Campana, co-president of North American concerts for giant Live Nation Entertainment, signs of growth aren’t just anecdotal.
“Sales are pacing ahead of 2010,” he reports. “Many people felt that this year was going to be flat, but what we’re seeing is growth (from last year) that, if not quite to double-digits yet, is certainly in the high single digits.”
But 2010’s annus horribilis may have changed some prevailing notions about the way the industry does business.
On the whole, North American concert attendance in 2010 dipped 12% from the year before, with the combined take from the top 50 tours off 15%. Of course, the degree to which that drop was part of a cyclical downturn or simply a perfect confluence of overpriced tickets and thinning consumer wallets remains to be seen. But as Campana reports, Live Nation execs used it as a chance to meet with the company’s partners and reevaluate certain standard practices.
“There are no bad tours, just bad deals,” says Randy Phillips, CEO of AEG Live, a Live Nation competitor. He doesn’t consider last year’s stats cause for enormous concern. “When you have oversupply and not enough demand, this is what you get,” he say. “Last summer I had no problem selling Justin Bieber tickets or Bon Jovi tickets; (Live Nation) had no problem selling Lady Gaga tickets.”
Phillips says the main problem with the touring biz is that the amphitheater model is “broken. … You’re compressing 12 months into a five-month season, so these artists are touring over and over again,” he says. “How many times can you see the same act?”
Phillips’ criticism points to a common concern for the biz: With album sales tanking, musicians are increasingly forced to rely on touring to make up the difference. But with more bands on the road — and more frequently — the concert business runs the risk of cannibalizing itself.
Factor in ticket prices, which have ballooned over the past decade, and the potential for consumer apathy is ripe.
Campana recalls that Live Nation execs saw the need for reprioritizing after last summer, and, considering tightened consumer budgets, focused on more moderately priced shows.
“A lot of acts are working with us to get top dollar for the reserve seat,” he says, “but they’ll push the envelope in terms of reducing the price for the lawn.”
As Campana notes, average lawn ticket prices have fallen from $29.43 last year to $27.67 for concerts this year, and Live Nation has scaled back on service fees for its cheapest tickets.
The concert giant also responded to a consumer gripe that became particularly acute last year, after more and more promoters sought to goose sales by slashing prices on lower-end tickets to struggling shows shortly before the event, in effect penalizing hardcore fans who shelled out full price closer to the onsale date. The response: offer bargain four-packs of tickets and $5 discounts for lawn seats on the first weekend of sale.
Lower prices also open up new touring structures. Prince, who recently announced a 21-show stint in Los Angeles, hasn’t mounted a traditional national tour in years, instead relying on periodic multidate residencies in different cities. By playing so many dates in a single market, he’s able to make up for lower ticket prices with sheer ticket quantity — 85% of tickets for his L.A. residency are priced at $25 dollars.
Move on up
Of course, Prince is a proven player with a three-decade catalog from which to draw; a more revealing bellwether for the direction tours may be taking lies in tracking the number of newcomers ready to ascend the ladder to larger venues.
There are success stories: Lady Gaga has been conquering her biggest-ever stages throughout the spring, while demand for Adele was so high that her scheduled June date at L.A.’s Wiltern Theater was moved up to the larger Hollywood Palladium, with an overflow show then added on at the even larger Greek Theater. Florence and the Machine attains amphitheater status this summer.
But the paucity of younger acts who can reliably sell out the biggest venues could be worrying.
“The sweet spot in touring is in the 4,000-6,000 seat range,” Phillips notes. “I think people are willing to pay a little more to see an artist in that more intimate setting than to go to an arena. But that’s not great for the arena business, because we’re running out of headliners.”
Campana wonders if acts have been jumping to arena-sized shows too quickly.
“When the economy was hitting on all cylinders and the record industry was still funded at a high level in terms of tour marketing, you could move an artist through the star system a little more quickly. If anything, we’ve maybe slowed that process down a little bit in order to see that an artist actually has some substance to put onstage.”
A number of marquee names are adopting the model long utilized by aging classic rock and country acts and launching joint tours.
Rihanna was one of summer 2010’s earliest casualties, with six of her shows cancelled after going on sale; she’s slotted for a U.S. tour again this summer, and is again tackling big-ticket venues, though this time she’s joined on tour by Cee Lo Green — the two just added a 10th night to their stay at London’s O2 Arena.
Hot newcomers Bruno Mars and Janelle Monae both experienced breakout years in 2010, and teaming up on a summer tour enables them to reach the larger venues, rather than continue to languish in clubs or risk playing to half-empty arenas. Sade’s hotly anticipated return to the concert stage will be prefaced by full-length perfs from John Legend, and the multigenerational alliance between New Kids on the Block and the Backstreet Boys appears to have the proper mix.
Festivus for the rest of us
Multi-act packaging has always been important, especially for the multiday festival, led by California’s Coachella, Tennessee’s Bonnaroo and Chicago’s Lollapalooza, which remains a bright spot for the biz. This year, Coachella sold out its passes in six days, after last year posting its highest-ever attendance. And though festivals like All Points West, Vegoose and Langerado closed up shop in recent years — leading hip-hop festival tour Rock the Bells also downsized to four cities last year from 2009’s 11 — others like Pitchfork, Stagecoach, Sasquatch and Gotham’s Bamboozle all boast growing clout.
But the big festivals come with issues of their own, including the risk of devaluing competing events; the multiday festival is a model of economy, in which ticketbuyers can have their pick of more than 100 acts for around $300, as opposed to paying half that for a top-tier seat to single artist’s show.
There’s also possible disruption from exclusivity clauses, which can prevent some big-name festival acts from playing in nearby markets for a period before or after the fest.
Coming off strong recent album sales, Eminem, the Strokes and Kanye West all have festival slots booked, but still no full national tours scheduled in support of those albums.
But the festivals are important in a much more vital area: incubating new generations of concertgoers. With the top-selling acts rapidly graying (the median age for performers among 2009’s top-50 tours was 46), anything that attracts young people in such large numbers is music to promoters’ ears.
“I’m convinced those guys out at Coachella are growing our new concertgoers,” Campana says.