Brett CallwoodThe cost of attending concerts has increased dramatically over the past two decades. And, while inflation dictates that there would naturally be a steady rise, the actual increase has gone far beyond what could reasonably be expected.
There are many elements at play, and we’ll dig into them here. But what’s interesting is that it hasn’t seemed to deter the concert-attending public; rather, arena/stadium gigs and festivals are selling out faster than ever. Therefore, there’s no incentive for any of the ticket sellers or venues to do anything about the price hike. Money still talks.
A popular narrative right now is that people are no longer paying for recorded music, so bands make up their money and fill that “shortfall” touring. It used to be that bands would use the tour as a loss-leader, to promote the new record. Sales of said album would provide the income. That’s been reversed.
VIP packages are in vogue — massively overpriced tickets that include various frills such as meet & greets, preferred seating, shirts and/or meals. But even general sale tickets, even seats up in the gods, can cost a fortune. The Fader reported that ticket prices have increased at a rate far greater than inflation: 20 percent between 2010 and 2015.
“According to trade publication Pollstar’s end of year report in 2015, the price of tickets to live music hit an all-time high that year, with an average cost of $74.25. This decreased by 2 percent in the first half of 2016, but tickets for Drake, Adele, Rihanna, Beyoncé, and Lady Gaga still appeared on sale for hundreds, sometimes thousands of dollars.”
The numbers are frankly staggering, but when people are buying tickets in greater numbers than ever, when festivals such as Coachella are selling out in record time year after year, what incentive do sellers have to curb the rising prices? Of course, there is a cost, but it’s unlikely to be one that the sellers give a damn about: Bands are performing in front of thousands of the wealthy and privileged, while middle-income people increasingly have to stay away — and find other live music outlets.
Few, it seems, are turning to the local music scenes, which they can easily support for $5 or $10 per show. Rather, the numbers turning out for tribute band shows are greater than ever.
“Either unable to see these bands any longer (think Led Zeppelin, or the original Pink Floyd) or the cost of seeing landmark bands that tour rarely (Rolling Stones, AC/DC, or U2), fans are paying less money to see someone mimic the artists they love,” wrote Maury Brown for Forbes.
Erin O’Brien of tribute agency Ultimate Entertainment says that there is in fact room for everybody.
“I think there’s a market for all kinds of bands,” she said. “There are venues that cater to original bands just like there are venues that cater to tribute bands. There’s room for everyone.”
Michael Twombly of tribute agency Music Zirconia agrees, saying:
“Does Beatlemania take away from anybody going to see the Lion King? They’re two completely different things. Nobody is going, ‘You know, I was going to go and support local music but instead I’m going to see a tribute band.’ It’s two different audiences. In Southern California, there’s 30 million people. There’s not even a rock genre anymore — there’s 40 rock genres. They ain’t hurting anything. They’re not hurting the original band either because half the time the original band doesn’t exist, or they don’t play in that area. If somebody’s a real fan, they aren’t going to say, ‘I just seen the tribute so I won’t go see the real thing.’ That’s never a scenario that’s realistic.”
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We reached out to Ticketmaster to try to get some firsthand insight into perpetually rising prices, but they emailed back, “We’re unable to participate at this time.” That was fairly representative of a general reluctance among primary vendors to speak to us on this subject.
It is clear, though, that there are a number of common factors that go beyond the declining recording industry. Production values are higher than ever, with artists such as Beyonce and Taylor Swift putting on increasingly lavish and expensive shows.
“If Taylor Swift’s $200 million-plus grossing tour sounds impressive, and cause for the artist to provide the fans she appreciates with a break in the ticket price, it’s important to note that gross and net revenue are altogether different,” wrote Carrie Whitney for howstuffworks.com. “The cost of putting on a show, from stage production to backup dancers to indoor pyrotechnics and even holograms, has skyrocketed along with the price of concert tickets.”
From dancers and holograms to interactive wristbands and Deadmau5’s Cube, performers are constantly looking to push the boundaries of what constitutes a live performance, and those spectacles cost big money.
Jeff Poirier, general manager of theater and music for Stubhub, says that certain big league artists are getting more comfortable raising their ticket prices to capture more of the available upside while trying to balance not alienating their fans.
“One of the ways that they’re doing that, for instance, is with Ticketmaster’s product Platinum Listings, where it will take the premium rows in any given section — which used to just be on the floor or in the lower bowl — take those first couple of rows and release tickets at a certain price, monitor what they’re starting to sell for in the secondary market, release another tranche to what the secondary market or true market value is, and capture more upside that way,” he says. “Now, in some ways what they do is they use that to offset lower ticket prices in the upper parts of any given venue so that, although a wider range of ticket prices, you are able to offset the lower ticket prices with the higher ticket prices to make sure you get all the different price points for your fans that you can get — you’re capturing more upside overall. So we see the use of platinum listings go up over time, but even in general, and you’ll hear this from industry readers, they do fear that ticket prices just continue to go up and up and up over time. I think some of that is realizing that artists are making more and more on tours, and they realize the value of going on tour and they want to maximize what they get for their efforts.”
Poirier says that there is truth in the narrative that people aren’t buying recorded music anymore which has led to a need (or at least a desire) for greater upside from touring.
“I would say outside the mega artists, it is tougher for them to make a large amount of money off of streaming,” he says. “We see a lot of artists that are playing midsize, a couple of thousand or less, venues who are much more interested in leveraging Stubhub as a distribution channel for some of their inventory to make sure that they’re capturing market value, and it may not be known to the common fan but it does happen — they want to capture some of that upside because they’re not the ones who are necessarily making a whole lot of money from the streaming portion of their music. So they know they have to make as much as possible while touring, and they also know they may never make it to a point in their career where they’re filling up arenas.”
Stubhub is attempting to evolve with the secondary market, which is to say that the lines between primary and secondary are blurring. The seedy perception of the “scalper” is giving way to something more respectable.
“I think if you look roughly 20 years ago when Stubhub was founded, there was a lack of understanding about how much access there actually was for people to go to live events,” Poirier says. “If you got on the phone to Ticketmaster and tried to get a ticket, and it sold out, it was very hard to understand how you were going to find a ticket, and honestly many people didn’t feel like going and standing on street corners to get what could be a fraudulent ticket. It was a pretty big ask of people to go to live events. Fast forward to today, and you’ve got robust ticket marketplaces that are offering up a seamless way to find the event they want to go to, pay in a safe manner since they’ve found the ticket that they want, and make sure that they got the ticket and have some guarantees in place that they’ll get in the door. We’ve come a very long way.”
The number of players in the game has increased too, which has led to competition which should ultimately be good for the customer.
“I would say that, whereas there were only a couple of players in the market 20 years ago [and] maybe only one — Stubhub — that was online, today you have a multitude of marketplaces that all have a specific customer or user experience, that are competing against each other on basically experience, customer service, brand loyalty, ease of use and quality of inventory,” Poirier says. “So it’s come a really long way in the way it’s evolved over time, and these days what we believe is that we should be able to compete in a fair level playing field on our customer experience, the customer service and the quality of the product that we’re offering.”
There’s still a perception that secondary sellers are purchasing masses of tickets and jacking up the prices for resale. Poirier says that’s the narrative that gets the most press, but it doesn’t tell the whole story.
“Our U.K. business alone if you want to look at that — something just greater than 50 percent of the tickets that sell on the Stubhub UK platform are sold at face value or below,” he says. “We know that because regulations dictate that we have to have the seller input the face value that they purchased the tickets for. Similar to that, in the U.S. we have a multitude, thousands of events, that you can find inventory for that’s below face value (which, by the way, is just an arbitrarily set number). Unfortunately the press that gets the most heat I think, is when a marquee event at an arena or a stadium, it ‘sells out,’ and then ticket prices are inflated on the secondary market. Now the question that you should also be asking is, whose inventory is that? Who’s participating in the upside. I can tell you quite candidly that there are brokers that are taking advantage of that mispriced ticket, and the upside maybe captures consumer sellers — you may decide you can’t go or for any other reasons you may decide to resell it. There are artists and there are promoters, as we know from the Metallica news that came out. So there’s a whole host of people that are participating in that upside. It’s not just someone like a broker.”
He’s right, and there are occasions when secondary sellers can be useful. Still, there are problems with secondary vendors achieving a level of respectability. The perception from vendors that concert tickets were in fact undervalued for decades, that concert-goers were essentially “getting a bargain” and that the free market will offer a fairer price, is problematic to say the least. Rather, what’s happening is middle-income music fans are getting priced out of big events. And yes — sometimes the bands are in on it. Who can forget the story from the middle of the year, when it was discovered that Metallica’s people were working with Live Nation to place 88,000 tickets straight onto the secondary market?
Metallica might say that they’ve been left with no choice; it was drummer Lars Ulrich, after all, who predicted that sites such as Napster would lead to the demise of the music industry. Back then, he was labelled greedy. Looking back, his words were prophetic. Still, their move this year reeks of milking their fans, and that stinks.
So what’s the solution? At this point, it’s tough to see one. Bigger artists will continue to test the waters and see just how much they can get for a ticket before people turn their backs on them. Ticket buyers need to be smart.
“Some of the more savvy ticket buyers understand that when platinum listing are now being sold for the first three rows halfway up in an arena, it didn’t used to be like that so why is that happening?” Poirier says. “Some of the more savvy ones are picking up on that and sharing their frustrations, but I do think that many artists will continue to raise ticket prices. Some won’t. But there will always be an event for any price point to go to. It may just not always be those marquee events for those top, top mega artists. That’s really what it comes down to.”
When you consider the fact that parking at large venues can easily set you back $30 to $40, T-shirts seem to costing in the region of $45, and drinks and snacks prices are equally out of control, going to see a concert is increasingly becoming out of reach for a large percentage of the population. But again, concerts are selling out so why would the industry want to lower prices? Poirier has been at Stubhub for over seven years, and he’s seen the business change immensely.
“We started out as a secondary ticket marketplace,” he says. “We are very much a ticket marketplace now. If you think about where inventory is coming from. Some of it’s being resold, some is coming directly from artists, some of it’s coming from teams, from promoters. It is a distribution channel — we’re offering up fans the ability to find the events, to find the tickets they want at the price they want, purchase it, know that it’s guaranteed, know that they’re going to get the ticket. By offering that, we compete on basically sell-through. We want to sell through the inventory that we have for the people that are trying to sell it, so in that way we’re very much a distribution channel now for a whole bunch of different people. So if I look further out, I think that will continue to become more and more apparent to people, that we are a distribution channel for tickets for all events around the world allowing people to buy in whatever currency and language that they want.”
Jessica Erskine, head of brand communications at Stubhub, says that there’s a rise in the demand for touring that the primary market is seeing, and the secondary market follows suit.
“As more and more see that they can capture that opportunity in secondary, that the industry is going to continue to shift,” she says.
So that’s where we are. Prices are unlikely to go down anytime soon — in fact, they’re likely to go up until the marketplace dictates that sales will go down. Live music at large events is becoming a rich person’s sport. We’ll always have awesome local music, but the option of attending an arena or festival show is diminishing for the non-wealthy. And that’s just tragic.
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