The Costly Concert: Ticket or Leave It

Back - Index - Submissions - - What is RSS? Date: Aug 03, 2099 Source: Washington Post Submitted By: In light of the debate that has stemmed from what Alisa turned in regarding the possibility of a million bucks a show, this article turned up in my WA Post Sunday newspaper. It discusses the rising cost of ticket prices and even includes other artists, and reasons for higher ticket prices. It may not mention the Boys, but it does mention NSync, who was here several days ago, and the commanding ticket price for them was about $40.50. I think this is a good article that would really help your Backstreet.net readers understand ALL the artists in general. Note: included in the article is a breakdown graph of a ticket leveled by percentages as to how much goes to all involved. Here's how it broke down from a Hootie and the Blowfish date at an amphitheatre. The numbers are claimed of the $39 paid by consumers: $32 for the ticket plus a $4 Ticketmaster fee and a $3 facility fee: House Nut (amount that goes to the venue): 38% The Artist: 34% Ticketmaster: 10% Facility Fee (added onto ticket price): 8% Opening Act: 7% Taxes: 3% Here's the article: The Costly Concert: Ticket or Leave It By Paul Farhi, Washington Post Staff Writer Sunday, August 1, 1999; Page G01 Bruce Springsteen, legendary poet of the working stiff, is a flinty-eyed capitalist when it comes to marketing his live performances. For his three sold-out performances at the MCI Center in Washington starting later this month, Springsteen didn't leave much on the table: Better tickets sold out at $67.50 apiece--or about twice what The Boss charged when he last played an arena show here seven years ago. Pricey as Springsteen is, he's no Cher. Her show (with Cyndi Lauper) at the Nissan Pavilion in early July commanded a top price of $77.75. At least, unlike Springsteen, that included parking. It's not just beloved baby boomer icons like Springsteen, Cher or Paul Simon who are raking it in during this, the peak concert season. Ticket prices are soaring for just about every act, playing just about every kind of venue. Want to see Blondie? The re-tooled '70s pop hipsters are getting $50 a seat. Boz Scaggs, whose popularity peaked in the Peter Frampton era, commanded $35.75 for his show at the Warner Theater earlier this summer. A three-day pass to Woodstock in 1969 cost $18 (though few actually paid anything to get in). The same pass to last week's extravaganza-cum-riot cost $150, plus $20 in service charges. That means the price of Woodstock tickets went up 2.5 times faster than everything else over the past 30 years, as measured by the Consumer Price Index. Indeed, concert ticket prices are bounding upward at inflationary rates that would seem shocking even in battered Third World economies. According to a survey by Pollstar, a magazine that follows the concert business, the average ticket price rose from $25.82 in 1996 to $38.56 during the first half of 1999. That's an increase of nearly 50 percent. The big upsurge is a result of several immediate factors, say people in the concert business: * The George Lucas Effect. A generation raised on MTV expects bigger, more elaborate shows, with more lights, scenery, sophisticated sound systems and special effects. All that drives up costs. When she was an opening act a few years ago, Reba McIntyre could contain her entire show in a couple of trucks; now a train of tractor trailers follows McIntyre to her arena dates, notes Ann McKee, Wolf Trap's vice president of programming. At the same time, bigger shows mean bigger outlays for insurance, stage hands and radio and newspaper ads, says Jack Boyle, music chairman of mega-promoter SFX Entertainment. * Paying the piper. Performers are demanding, and getting, bigger upfront performance fees, known as "guarantees." Bob Dylan and Paul Simon, for example, are being paid as much as $500,000 per performance on their national tour, according to Billboard magazine. Part of this is a result of the performers' rising costs--all those sets and tractor trailers, plus manager's and agent's fees. And rising guarantees mean higher ticket prices--guarantees, after all, are the key factor in how an artist (with the promoters' help) sets ticket prices. Little wonder, then, that tickets to Barbra Streisand's New Year's Eve concert at the MGM Grand in Las Vegas range from $500 to $2,500; Babs's reported guarantee is an astonishing $13 million. * Competition among promoters. Independent promoters grumble that they're being outbid for tour rights by the industry's new giant, SFX Entertainment. The New York-based company has spent more than $1 billion in the past two years buying up independent promoters, including Alexandria's Cellar Door Cos. for $105 million last August. SFX also has control of venues across the country, such as Nissan Pavilion in Prince William County and Merriweather Post Pavilion in Columbia. With SFX's vast scale, rivals say the company is able to offer larger guarantees to ensure that acts will play in its facilities. Wolf Trap's McKee says her facility lost one performer (whom she won't name) to Merriweather Post because SFX was willing to triple the performer's guarantee. "We have ferocious competition because of . . . SFX," says Danny Zelisko, president of Evening Star Productions, a promoter in the Phoenix area. "They have a battalion of talent [bookers] for every tour that goes out. They [start] by asking, 'What's the most someone is willing to pay for a ticket?' " Not so, replies Boyle, SFX's music chairman. Though he acknowledges that prices have gone up, he also says SFX has lowered some prices, too. "We've had all kinds of reduced prices," he says, citing two-for-one deals on lawn seats for Steve Miller's appearance at Nissan. Boyle says concert patrons have greater choice since SFX introduced "tiered" pricing--five or six different price levels, rather than just two or three. "Tiering has been our salvation," he says. Boyle argues that price increases compensate both artists and promoters for years when prices were relatively low. "The last few years have made up for all of those when the risk and reward were so far out of whack," he says. "It was costing artists more to be on the road, and promoters to promote, than made business sense. For several years, a lot of shows didn't come to Washington because it cost so much to be here." There's another, simpler explanation: Ticket prices are going up because people are willing to pay more. Concert promoters say that arena and amphitheater shows have been doing solid business this summer (though typically only one in five shows sells out). That's a pretty good indication of what economists like to call "price elasticity"--the idea that demand for a product remains steady even as its price rises. In addition to a roaring economy, which has created near-full employment and considerable discretionary income, the pop music concert business is benefiting from some favorable demographics. Once, going to rock and pop concerts was a ritualized part of youth, a sociological (and sometimes political) statement. Ticket prices tended to reflect the limited means of its dominant customer base--the young and relatively poor. Not any more. Baby boomers, the group that fueled the giant arena and stadium concerts starting in the 1970s, are now in their prime earning years. They've got more to spend and don't mind spending it to relive a little bit of their vanished youth. It's thus hardly a surprise that among the highest grossing concert tours of the past five years have been massive stadium shows featuring rock's dinosaurs--the Rolling Stones, Pink Floyd, the Grateful Dead, Elton John and Billy Joel (co-billed), and the Eagles. The last group may have broken through some invisible price ceiling by charging $85 for the best seats during its 1994-95 stadium tour, its first in 16 years. That now seems quaint. On their arena tour earlier this year, the Stones charged an average price of $109.62, according to Pollstar. What's more, the boomers seem eager--or at least willing--to indulge their children. It doesn't particularly matter that most of the passionate fans of N'Sync aren't old enough to drive to the group's shows; the quintet got a very grown-up $40.50 for good seats at its show at Nissan last Wednesday. At Wolf Trap's souvenir booths, young people "buy everything," says McKee. "The number of $50 and $100 bills that come out of teenagers pockets is just astonishing." With the market this good, some popular musicians have shown remarkable self-restraint. Bonnie Raitt, Mary Chapin Carpenter, Annie DiFranco, and Peter, Paul and Mary are among those who consciously set ticket prices below market value, say promoters. Offspring, the hot, neo-punk band, has charged its youthful fans an average of $18.45 per ticket on its tour this year. Tickets to the summer "Warped" tour, which features more than a dozen punk and rap acts, go for around $25 each, though most of the tour's performers are lesser-known ensembles (Dropkick Murphys, Black Eyed Peas, Lunachicks, etc.) who are working cheap. Similarly, headliners at shows sponsored by radio stations, such as Baltimore's HFStival, also work at below-market rates, counting on airplay to make up for lost fees. Garth Brooks concerts are practically charity events. He charged $18 per ticket on his 1992 tour; on last year's worldwide swing, the price had risen to just $21. "They're $21 because Garth Brooks wants them to be $21," says Gary Bongiovanni, the editor of Pollstar. Which begs a question: If Brooks can charge $21 for his elaborately staged shows and still keep himself in cowboy hats, how much good old-fashioned greed is built into, say, a $90 ticket? Undoubtedly some, says Bongiovanni, who points out the here-today, gone-tomorrow insecurity of the music business, and the desire of some performers to make as much money as possible before that tomorrow comes. "I think Garth views his concerts as a personal connection with his fans," says Bongiovanni. "By forging a strong bond, he believes it will pay dividends for years to come, which will translate into record sales long after radio abandons him. And I bet he's right." Bongiovanni and others assert that musicians are also raising prices now to recapture revenue lost over the years to scalpers and other "after-market" ticket "brokers." "The artists ended up feeling like schmucks because some guy in the front row had paid $150 [to a ticket broker] for a $30 ticket," he says. "That tells you that the public deemed the true market value was higher" than the price the performer set. However, ticket brokers have simply raised their prices, too. At the box office price of $67.50, Springsteen tickets are a relative bargain compared with what professional brokers are getting. The Top Centre Ticket Service in the District says its Springsteen tickets are priced from $150 to $500; Stagefront Tickets in suburban Maryland quotes Springsteen prices as high as $600 and as low as $85 for an upper-level seat that originally sold for $42. Steep as the price spiral may be, SFX's Boyle suggests it's all relative. He argues that tickets to other kinds of live entertainment have been inflating, too. While that's generally true, nothing's going up as fast as concert prices. For example, a club box seat to a Baltimore Orioles game has shot up from $25 to $35 in the past three years. That's a solid 40 percent increase, but in percentage terms it's still less than what's happened to the average concert. The top ticket to a big musical at the Kennedy Center has jumped a mere 11 percent, from $65 (for "Beauty and the Beast" in 1996) to $72.50 (for the current production, "Titanic"). At a top price of $239, a ticket to the Washington Opera is indeed expensive, but not much more so than in 1996, when it cost $225. Ultimately, promoter Zelisko says, an unabated rise could be harmful to the music business, as the fan base for live shows becomes limited to the well heeled and wealthy. Soon, he and others say, a backlash will set in. "Personally, I find it astonishing," to spend more than $100 for a pair of concert tickets, says McKee of Wolf Trap, a nonprofit institution that has attempted to restrain its prices. "There isn't that much I'm willing to spend that much money on. You add in the parking, the babysitter, maybe dinner, and it turns into a major commitment. At some point, people will say, 'I'll pay it this time. But if you're coming back next year, forget it.' " Ticket Price House Nut 38% (amount that goes to the venue) The Artist 34% Ticketmaster 10% Facility Fee 8% (added onto ticket price) Opening Act 7% Taxes 3% *Rounded numbers The above example is from a Hootie and the Blowfish date at an amphi theater. The numbers are percentages claimed of the $39 paid by consumers: $32 for the ticket plus a $4 Ticketmaster fee and a $3 facility fee. 1999 BPI Communications, Inc. © Copyright 1999 The Washington Post Company Comment on this item. 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