Monday, March 15, 2010

Who Sets The Prices For Concert Tickets

You would think that the band/performer set the price of tickets, but unfortunately that is no longer the case. Managers, promoters, venues, and ticketing agencies all have a hand in it now. It makes you miss the good old days of seeing your favorite band play at the local bar.

Recently I hopped online to price tickets for Dave Matthews Band. This summer I wanted to attend a lot of their shows as a way to play catch up since I got into the band so late. They were performing at several venues within a 3-hour drive from my house, so I figured why not do a road trip? I was excited by the idea of travelling to see the band play different venues and to see them in different settings. Then I saw the ticket prices.

$50 for lawn seats at most venues and between $70 - $80 for actual seats (all before fees). What the hell was that? That’s not Dave Matthews Band, they ALWAYS kept their prices low and affordable for fans. That made me start to wonder, just who is setting the ticket prices for these concerts? I can’t imagine DMB charging that much for their concert, when just a couple of years ago, their most expensive ticket was under $50. I wanted to know if I should get mad at the band or if there are other factors involved.

Guaranteed Payments
Lately, the big thing in the concert industry is signing a hot artist to exclusive rights. Concert promoters like Live Nation and AEG salivate at the opportunity to get a top name act to deal exclusively with them. Madonna, Nickelback, Jay-Z, U2, and other acts have all signed on for this. For the artists, it’s almost a no-brainer; they are guaranteed millions of dollars whether they sell out venues or not.

Unfortunately, for the fans, these exclusive contracts are not so great. Now the promoter gets to set the price on the tickets, the merchandise, and they get to determine where the concerts will be held. Granted, the band negotiates the ticket prices before signing the contract with the promoter, but every new contract sees ticket prices rising, meaning the promoters are winning the war.

Since each promoter has a lock on certain venues, it means that if a band like Nickleback is coming to your town, there is only one arena they are going to perform at. It also means that the good seats are going to cost quite a few dollars, and if the scalpers get a hold of them, you can almost double that price.

The Concert Promoter
The concert promoter may agree to a fixed payment with the musicians for their performance and then any money left after costs is theirs to keep. The promoter also covers the bands expenses for the concert (or the tour) and the only way they can recoup that cost is through the ticket sales.

The promoter promotes the artist to the venue to book the gig, then promotes the artist to the fans to get the tickets sold. Even big acts need to convince the venue that they will sell out and that it would be good for the venue to have them there.

Below is a quote I found online from a book about breaking into concert promotion (www.concertpromotions.net):

“It's easy to overlook that concerts are actually part of the same industry as weddings, conferences, conventions, and seminars. The event planning industry comprises all of these and more.”

While that is irritating and aggravating, it’s also true. Concert promotion is a business, and while we love our favorite artists and live for the chance to see them live in concert, the simple truth is that they are entertainers, just like actors/actresses, comedians, and other types of live entertainment. It is a business and a successful one at that.

However, it’s a double-edged sword. The bands don’t want to rip off their fans, but the more popular they become, the larger the venue they need to perform at. The larger the venue (and sub sequentially the tour) the more promoters are involved. They have to be, because they own exclusive negotiating rights with the venue.

The Tiered System
Unlike attending an up and coming (or on the way down) band at a local club like the Starland Ballroom, seeing a major act is not a one low price for all. If you want good seats expect to pay. If you want great seats expect to pay more. And then expect to pay the fees on top of that.

The recent phenomenon in the concert world is the tiered system. Promoters know that not all fans can afford to pay a high price for concert tickets (especially these days), so they came up with a tiered system where the better the seat, the higher the price. This can range from $25 on the low end (RE: nose bleed or lawn) to $250 for the best seats in the house, depending on the entertainer.

The Future Of Concerts
So, what does this all mean? It’s obvious that this practice isn’t going to change anytime soon. Bands need promoters to handle the preparation of their long tours, so they can focus on practicing and creating great music that the fans will love. Unfortunately, the promoters are getting greedier and greedier as each year passes. These big national promotion companies are like the health insurance industry or the bank industry – they see an opportunity for a lot of money and they exploit it. And just like the insurance industry and the banking industry, the customers are left footing the bill. There is no hope to seeing this change anytime in the near future. As bands get bigger and bigger, adding more and more fans, concert promoters are going to charge more for tickets. It’s an unfortunate truth to the new way of seeing concerts.
For me, this means going to more club shows and if there’s a band that I really want to see, I have to sit in the bad seats, or miss them completely. For Dave Matthews Band, I’m going to try and scrape together the cash to see one of their shows this summer, but the chance of me seeing multiple shows are slim to none. I can’t justify going into major debt just to see a band perform live, no matter how much I love them.

What are your thoughts? Comments are open. Feel free to post some.

4 comments:

Viagra Online Without Prescription said...

Hi!
I think some people are always trying to get money as much as they can even though if they already have enough money...
Such a shame
Thanks for sharing!

Zack said...

I don't see how this is different from any other industry abiding by the rules of capitalism. The prices grow as demand grows. There ARE fans who can afford to pay higher ticket costs.

If DMB managed to succeed in keeping the prices low, you could end up missing out on the concert(s) you wanted to see anyway, simply because they were snatched up too quickly by people with more free time than you. I would find this situation a lot more frustrating than being unable to afford it in the first case. Guess you can't have your cake and eat it too.

Remember that the promoters are doing a good thing for the consumer in the end. As you said, their service allows the band more time to do what they do best, which ultimately has a positive effect on fans and consumers.

On a small tangent, I find it ironic that a rant against exploiting opportunities for money is followed up with a spambot ad in the comments. :)

Thank you for the read!

kim4tj said...

Thanks. I've been looking for the best site for the concert tickets. My vote goes to ticketselect. Unlike the one, you recommend this is updates each hour so you always will be the first one to know about the concerts and for the cheapest price! That's how I get my Katie Melua tickets! 3 weeks to the show and there are no tickets left already! They were sold out within 2 days! I advise you to not risk with the concerts you would love to visit and sign up for https://ticketselect.co.uk/events/london! Cheers!

Anonymous said...

Ah this makes more sense to me now. Ty.