Wednesday, March 2, 2011

Lower Your Prices, Dummies!

The future of overpriced concerts

I’ve been reading a recent trend in all the major music publications lately. Concert promoters are worried that the concert industry is going to take a huge hit in 2011. Based on the drop in overall ticket sales for 2010, cancelled tours by major acts, and the worry that gas prices are going to rise to over $5.00 a gallon, promoters are concerned that there won’t be enough fans in the seats this summer. Whether that ominous premonition comes true remains to be seen, but one thing is certain---fans are finally revolting against high ticket prices by sitting on their wallets.

There have been endless articles as to why overall ticket sales dropped last summer. I’ve read and heard everything from bad luck (like U2 being forced to cancel many tour dates when Bono had emergency back surgery), to poor scheduling, to lack of major talents touring, to not enough promotion for major events. What it all equals is a scramble to come up with a story and avoid the truth.

The truth is simple, even if major concert promoters want to turn a blind eye to it---the fans are tired of overpaying to see a concert. Let’s look at a tour that had no problem selling at all, the Dave Matthews Band. Now, some would argue that maybe their announcement to not tour in 2011 helped their ticket sales, but I disagree.

DMB have never had problems selling tickets to their shows. One of the main reasons for that is the fact that they keep their ticket prices reasonable. With the exception of tickets to the Citi Field concerts in New York City, the average DMB tickets were between $50 and $75. While that’s a tad on the high side, they are reasonably priced compared with other bands. Bon Jovi tickets cost between $150 and $300. That’s just too high. And while their concerts in the NY/NJ area are pretty much sold out, their concerts elsewhere have not sold as well.

Companies like Live Nation Entertainment and AEG are scratching their heads saying that they are not exactly sure what is causing the low ticket sales. They still think it’s due to the economy. And while the economy does play a small part in the lack of attendance, it is the price of the tickets that is the biggest reason fans are staying away. It’s hard to justify spending over $100 on a concert (and that’s before fees) no matter who the performer is. The hard working citizens that are the bread and butter of concert attendees simply cannot afford it. And yet, the concert promoters don’t see this.

You could blame the band and say that they should lower their ticket prices, but in the case of the big name acts (DMB, The Eagles, Nickelback, etc.) the bands have signed a contract with a concert promoter and have little to no say in what the prices for tickets are. That is why you are seeing some concert tickets going for as much as $250 per ticket.

The formula is simple, if you want more fans to buy tickets up front and if you don’t want to slash your ticket prices at the last moment in order to sell more seats, then lower your prices from the beginning. Rather than having a tiered system where some seats (and it’s always a low number) go for $30 - $40 and then the rest of the seats range from $75 - $225, have a one price system that is a median sum of the numbers. Fans are much more apt to pay $85/ticket with an equal chance to sit on the floor than they are to spend over $150. Springsteen does this with his stadium concerts and I’ve never seen him have trouble selling tickets.

To the concert promoters, I make this plea. Lower your ticket prices for just one tour and see what happens. If you truly care about how many people attend the concerts, rather than how many millions the tour makes, then try this experiment. Put on an affordable tour. You’d be amazed at how many people will show up.

What are your thoughts? Should the industry lower their ticket prices across the board, or is this just a matter of expected inflation, as most entertainment events have gone up in price over the last few years? Comments are open. Feel free to post some.

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