While concert ticket sales have begun to rebound for top-level acts since the Sept. 11 terrorist attacks in New York and Washington, it’s the medium-range and niche bands that have felt the pinch and are likely to suffer further, industry insiders said.
Ticket sales for such mainstream acts as Madonna, U2, Elton John, Bob Dylan and Jimmy Buffett continue to be strong, while tours catering to a niche teen demographic are not selling as well. Notable examples, according to sources, include the Family Values Tour, featuring Linkin Park, Staind and Stone Temple Pilots, and the Pledge of Allegiance tour, which includes Slipknot, System of a Down and Rammstein.
“When there is a recession and when a category like entertainment is going to fall, you’re going to see it fall first and foremost in those middle-level acts that are pushing the number of shows out there,” Ticketmaster president and CEO John Pleasants said. “It’s not going to be Madonna’s $250 tickets.”
The concert industry, plagued by a slowing economy, was hit hard by cancellations and rescheduling because of the attacks. According to a financial statement issued this month by Ticketmaster, events that were postponed or canceled for which the company had sold about 725,000 tickets resulted in significant lost revenue in the third quarter.
Additionally, while radio has traditionally played a key role promoting upcoming events, many stations have been forced to alter their regular programming schedules to cover the ever-changing war on terrorism.
“You could not get on radio (the first week after the attacks) to promote these shows,” said David Zedeck, founder of Evolution Talent Agency, which is handling Britney Spears’ tour with O-Town as well as Backstreet Boys and Aaron Carter, among others. “KIIS-FM in L.A. didn’t run promotions for 10 days – no call-in-and-wins, nothing like that. They toned it down and were much more conservative in what they were talking about.”
As a result, the concert industry is looking to the Internet as an alternative means of promoting and selling tickets.
“We can no longer depend upon radio because it’s preoccupied with news coverage and other promotions that are not music-related,” House of Blues Concerts president Jay Marciano said. “The Internet has provided an almost equal marketing vehicle to reach our customer base.”
Marciano points to the successes HOB Concerts has had with presale events done in conjunction with Ticketmaster, in which niche e-mail database marketing alerts fans of buying opportunities before they are offered to the general public. Ticketmaster has launched presale campaigns for such acts as Spears, Dylan, U2 and Neil Diamond and often partners with Internet service providers MSN and America Online.
“Presales is a way of driving media attention to the events that are upcoming or that are running now,” Pleasants said.
Additionally, as a result of this e-mail notification network, concert promoters can reduce their advertising costs in such traditional media as radio and television. Internet ticket sales account for one-third of overall ticket sales, Pleasants said. Presales for a specific event can boost the sales of that show to account for as much as 60% of tickets sold.
After a burst in summer ticket prices, some in the concert industry who have been rocked by the economic downturn and the residual effects of the Sept. 11 tragedies are examining ways to reduce ticket prices.
For the Spears/O-Town tour, “We took a real look at where the business went this summer and how the ticket prices exploded,” Zedeck said. “Except for a small portion of the house – around 20% – everything else is left at $50, which in light of what shows have been bringing in over the past two years is a conservative ticket price.
“You have parents that are out there buying four to six tickets per family, and if you go at $80 or $100 a ticket, the average American is paying a week’s paycheck to take their kids to see a show, between the show, merchandise, parking and food.”
Medium-sized acts will be hurt the most if ticket prices are slashed, said Jay Sendyk, a business manager who handles such acts as Marilyn Manson and nine inch nails.
“Facility costs have gone up, union costs have gone up, and everybody wants their fair share of profits,” Sendyk said. “The cost of the band to tour has gone up, the bus that I used to get for $300 a day now costs me $650 a day. The driver (that) used to charge $110 a day is now $185 a day. You start tallying those things up. The bands are making less.”
Industry leaders Ticketmaster and Clear Channel Entertainment maintain that despite higher prices, tickets sales have continued to increase.
“When we compare our overall gross ticket sales this year to last year, we must take into account the number of artists touring, and in doing so, we have noticed that the sheer volume of artists touring this year is down nearly 10%,” Clear Channel Entertainment co-CEO of music Irv Zuckerman said. “Despite this, Clear Channel Entertainment was able to increase its first six months music ticket sales by 12% and increase its paid attendance for outdoor shows (amphitheaters and stadiums) by 7% from last year.”
However, the concert industry won’t know how deep the effects of the Sept. 11 attacks will have on business until next year’s peak spring and summer touring season.
“There is a silver lining for the concert industry,” Marciano said. “The majority of our revenue is booked during the summer time period. The majority of our revenue for the calendar year 2001 has already been booked. The tragic events of (Sept. 11) are less likely to have an impact on the current fiscal year as it will in the upcoming year. What happens next year is anyone’s guess.”
One tangible byproduct of Sept. 11 are the costs associated with additional security at concert venues, Sendyk said. Any increase in costs will come out of a band’s cut or force a further increase in ticket prices, he added.
“We have customized security plans for each of our shows, which are developed in conjunction with artists, venues and local authorities, but we are not at liberty to discuss the details of such plans,” Zuckerman said. “We do not envision a significant increase in ticket prices due to security concerns.”