There's an interesting piece on the economy of ticket sales over at Music Think Tank:
I remember seeing Kiss for $12 in 1985. I think that in 1990 or 1991 I bought tickets to see the Cure (very good seats too) for about $29. I used to hit 6-10 major shows per year up until about 10 years ago. I've pretty much given up on seeing live arena/stadium acts because of ticket prices. While my Ga Ga ticket purchase was a gift for a family member, I won't be forking over that type of cash anymore.But the upward price trend can’t go on forever. Once you hit a certain price point you’ve soaked up the excess demand and now your good (concerts) is subject to more competitive alternatives for entertainment (i.e. movies, video games, booze).
The chart suggests that we’ve reached that price point. In 2008 (during a raging recession) average ticket prices jumped at its highest rate in the decade to $67. Gross box office revenue set a record of $4.2B. But that was actually a softer revenue figure than the trend line - if you follow the line, at that price revenue should have been closer to $5B. But it wasn’t - demand fell at that price.
In 2009 ticket prices declined (and for the first time) but the industry had its best year ever with $4.6B in box office revenue and a record numbers of tickets sold, even better than what the trend suggested would be the case.
In 2010 the industry experienced a well documented decline. But looking at the graph the year 2010 looks like it is falling into line with the past years. What I gather from this is that the concert industry as a whole cannot depend on continued price increases for tickets to grow the industry. Once we get past the $60 mark for average ticket prices, you will start to see more unpredictable results than the world when tickets were safely underpriced. We saw that this year with discounting after on-sale, excessive papering, and cancels - all things that have toxic effects for the industry as a whole.
While I agree that the music industry does need to focus more on using lives shows to drive revenue, I think they're shooting themselves in the foot right now. Under the old model, live shows used to support music sales. People would drag their friends along to see bands at arenas and they'd go home and buy a CD. If you take away radio and price most kids out of the concert market.....who the hell is going to want to buy any music at all? What's the method of prodding kids to buy music at all.
For that matter, how much of a $100 ticket ever makes it back to the band?
Here's an interview of the Godfather touching both on the "decline" of live tours and the stupidity of pricing digital music.
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