Monday, July 18, 2011

The Concert Industry vs. the Concert Industry...

Is the concert industry at war... with itself? That was the feeling after a morning conference call with the newly-announced Fans First Coalition, a group that features a number of leading managers, venue owners, and promoters. But Live Nation executives were not part of the call, despite have a token listing on the Coalition site. The group's stated intention is to create a marketplace with 'affordable tickets at transparent prices' and to 'put fans first,' but this looks more like an intra-industry battle than a liberation crusade.

The problem is treacherously complicated. Fans typically go to one or two shows a year, according to Live Nation CEO Michael Rapino and other leading concert executives. And, nosebleed markups are becoming the norm on high-demand shows. But fans are also voluntarily paying those markups, a classic case of 'willing buyer, willing seller' that often involves price-tags above $100.

But Coalition members feel that this marketplace dynamic is destroying the consumer appetite for return, regular concert attendance, because it concentrates discretionary income on that one, big gig. "It erodes the heart of our business," said Randy Levy, Coalition member and president of Rose Presents. "It's probably five or six other shows they're not attending [per year]. You just can't build a new business when fans can only afford one or two shows a year."

But wait: concert industry revenues are actually up this year on the biggest shows, according to Pollstar, despite decreased attendance. Which of course means higher prices - to the tune of 10 percent on the 100 largest North American tours.

Sounds like more money - at least right now. And that, according to Coalition members, is exactly the problem. Manager Jared Paul (Nicole Sherzinger, Hillary Duff, New Kids on the Block, Glee Live) said that bands want the luxury to comfortably return to cities year after year, instead of competing to be that once-a-year event. "The measures that we've put in place to curb the secondary market are extreme," Paul said. "We put just as much effort into that as marketing our shows."

Paul represents one of dozens of bands and managers that are participating in this coalition. But perhaps New York Times journalist Ben Sisario pointed most convincingly to the elephant in the room. After all, Live Nation owns TicketsNow, a group vilified by the Fans First Coalition for ravaging this business. "It's not a perfect world, we just have to get started, but it's a ridiculous conundrum that Live Nation has a scalping business on the side," Levy responded. "If I were a shareholder I'd be preaching for them to get out of that business."

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