Wednesday, March 30, 2011

The Price Of A Concert: Breaking Down Where The Money Goes

We all have a tendency to balk when seeing the price of some concert tickets, especially for the larger tours. How on Earth can these performers justify their $100 - $250 ticket price? Don’t they realize that without the fans, they wouldn’t even have a job? And I will admit that I am the first one to scream about the cost of concert tickets, but I’ve recently given some thought to exactly where the money spent on concert tickets actually goes.

Below is a breakdown of who gets paid for putting on a concert. The band (or entertainer) takes a majority of the money, and rightfully so. They are the talent. They should be paid for entertaining us. However, there are many other people involved in producing a concert. They get paid as well. And that money all comes out of the sale of tickets.

Venue
Before anything happens on a tour, the venues have to be selected and confirmed. Doing that takes money. Most venues are paid up front, and they get paid whether the concert is successful or not. The average cost to rent an arena is around $20,000/night while the average cost to rent an amphitheater is around $10,000/night. Smaller clubs cost less, but their capacity is also less.

Promoter
The promoter takes a chunk of the ticket money, as they spend a lot up front. They also help determine the price of the tickets and how pricing will be structured. There are advertising costs that need to be compensated. Promoters have to recoup the cost of tour expenses, venue rentals, and anything else that may have been shelled out up front. They also take a nominal (or in some cases, not so nominal) fee for their services, ranging anywhere from 3% - 10% of the ticket cost.

Management
Every great band has a manager or a management company. They have to. Someone has to take care of the many affairs involved with a tour. From booking a hotel room, to checking the contract riders, to scheduling the tour bus, rides to and from the venue, and making sure the band has clean clothes, managers do a lot. And a good manager is worth his/her weight in ticket proceeds. The average manager takes between 10% - 15% of the ticket sales. Most of them earn it.

Road Crew
These guys work their asses off for the band and usually receive small wages in comparison to the amount of work that they do. Everything from lugging the equipment, to checking the guitars, drums, and microphones, to setting up the stage…it’s all covered by the road crew. Affectionately known as roadies, these men and women are the backbone of any touring band. The road crew is the gang that makes it all happen. While the band is responsible for providing the magic on stage, the roadies cover every little nuance to ensure that the band has all the tools they need to perform.

House Lights and Sound
These days, most shows, even the ones at small intimate venues, have a great light show. From different colored lights flooding the stage, to the house lights that reveal the audience, they are all operated by lighting masters. Sound engineers make sure that the band is hooked up to their speakers and on stage monitors. They verify that the sound is excellent and they stand in front of the soundboard for the entire concert, making constant small adjustments and improvements to ensure there is no feedback or change in sound quality. If the band sounds impeccable, it’s almost always due to the sound engineers who work the board.

Hotels
Even if you are in the world’s biggest band, hotels aren’t free. While some bands sleep on the tour bus, most bands prefer to stay in a hotel with some minor luxuries and a bed. Hotels in certain cities cost a lot of money, and it’s the band that has to pay for this. From the road crew to the assistants and everyone in between, hotels are needed and require cash.

Hospitality
Have you ever been backstage after a concert? If so, you may have noticed the nice spread of food that’s available to the band and crew after a show. This is all provided by a hospitality service. They take care of the menu, setting up the food, and making sure that there is a large variety of eats for the band to enjoy.

Transportation
From the tour bus to the big rigs that carry the equipment and the stage, transportation from city to city and town to town where the band is performing is required. Gas is extremely expensive these days, and the large vehicles use a lot of it. Some bands even fly from show to show on planes. That cost adds up and it’s all paid for out of the ticket sales money. As you can see, there are a lot of people other than the performers required to produce a concert.

The next time you see astronomical ticket prices, take a moment to think about where all this money goes. Why that doesn’t justify the insane prices (like $250 to sit on the floor), it does help explain where the money goes. Not all of it goes to the band or the concert promoter. A lot of it goes to the everyday men and women that are working hard to make sure you are entertained for the evening.

Comments are open. Feel free to post some.

5 comments:

Taryn said...

Very interesting! I was just thinking about the seemingly outrageous convenience fees included in (or added to) the price of a concert ticket. I LOVE music, but I'm always a bit reluctant to buy concert tickets because of this ... however my love for music generally wins provided I have the funds. I've got a degree in Marketing and knew there had to be a second side to the story. So, I figured I'd better do the research (which led me to your blog). I did a research project in school similar to this, but breaking down the price of album sales. Completely eye-opening to the whole process and behind-the-scenes workings of the industry that your average concert goer doesn't even think about. I'd like to write a post with a comical take on the concept of convenience fees on my own blog (http://marcymonologues.com/), but I'd also like to provide some legitimate information on why they exist in the first place. Your explanation is broken down in plain and simple English ... and doesn't seem very biased either. When I'm finished, do you mind if I include a link to your post?

Thanks for the great info!

Ryo Vie said...

Hi Taryn,

Glad you liked the post and thank you for the kind words.

I would be honored if include a link to this post once your article is complete.

Good luck and happy writing!

Ryo

Anonymous said...

That was very help full, but let me ask you, say I wanted put on a show in a Arena, but not a tour do the price of the artist comes with a production team n I just provide the venue or the artist just shown up and do there thing to what I put together as far as stage my own light crew n other things to make there show a good show?

Kenny said...

Wow this was a great post. Thank you!

Gee Marquis said...

Ok. I enjoyed your writing style but would like to offer a different perspective without going too in depth.
Arenas typically run around $50,000, Promoters get the bulk of ticket sales, unless there is an investor involved.
Hotels are free in exchange for sponsorship. That's why you see, "Presented by Coca Cola and a list of other businesses" but the band never pays for that. Accommodation is typically included under the Rider.
Riders cover all personal needs of the artist. Hotels, food, alcohol, REDACTED lol, etc. All the way up to what their dressing room needs to look like for them to feel comfortable enough to perform.
The serious money besides the acts is the advertising in radio, print and television. For a major act, that budget could easily run $100k or more.
Depending on the act, a few are above $750k, many are at the $500k level and most are above $100,000. Anything less than that aren't ready for an arena show.
When you hire an artist, gas for transportation, everything needed to get the artist to the event is covered under the booking cost.
House lights, sound and staging are normally sourced. In my case, I'm currently looking at a stadium 7000 miles away from my home. Because it is a rugby stadium, I have to lease everything: staging, lighting, audio and a production team to man it all.
Last, there is the cost to access the ticketing process. Some of the costs associated are passed on to the consumer but most are covered under the ticket price.
So there are many reasons why ticket prices are high. But look at it this way. Someone has the exclusive ability to see an event with their favorite artists along with (in my case) 51,000 other people. That is a pretty sweet privilege. And considering all of the hard work, sleepless nights and to be completely honest, issues that threaten a major cardiac event, be happy that you will only pay $100 bucks for a ticket. Because I would charge more if I could get away with it. And depending on the locale, I typically do.
Just some food for thought. Thanks.