MUSIC OR THE ECONOMY?
No one knows for sure. Is business bad because ticket prices are too high for acts that have been on the road too often playing old material while new acts are ever-harder to develop or is it just that the economy sucks?
But you can’t trust the prognostications.
"Pollstar" says revenue in the first half of 2010 is off 17%. Live Nation cries foul, claiming that the grosses of the Eagles weren’t included, and that brings the number down much lower…and are the statistics even accurate to begin with?
One thing we can all agree on is it’s much harder to develop an act with no medium, not radio, television or any one Website, having dominance.
Then again, more people are listening to more music than ever before.
I don’t think the economy is the main factor. Other retail industries are not off as much.
THE DARK SIDE
Used to be the touring industry was a subsidiary of the labels. Not literally, but labels created demand and promoters mopped up on the road. Now the labels are close to impotent and crying that they deserve road income. But because of their lessened importance, no one is listening to the labels, they’re listening to the promoters, and if labels were always scummy, promoters have historically been bottom of the barrel. What I mean by that is at least labels pay by check and the checks don’t bounce. Whereas touring has always been about cash, and you’re always worried, especially now that checks are prevalent, that you’re going to get stiffed.
In other words, do you work for Live Nation because you can get paid? Remember Jack Utsick? Everyone was afraid to book a national tour with his company for fear it would blow up. It did.
Each and every acquisition Rapino has made has not borne fruit. One can even argue that it was a bad idea to purchase House of Blues, never mind Trunk, etc. Pursuing dominance, streamlining to own the concert industry, Rapino has ended up with too much capacity and not enough profit. Some say he never should have gotten rid of the legitimate theatre and motor sports divisions. We can second guess his efforts all day long, but the point remains, none of his purchases have paid off. Makes you wonder, right?
As for Irving… Best manager ever. Best Chairman? Mmm… He built MCA Records essentially from scratch, but it took Al Teller to make it truly profitable. And Giant Records never really found its way. Can he steer Live Nation to profitability?
Then again, he controls all the acts. Fuck with Irving, and you incur his wrath. His problem is he’s got too many unwieldy, sometimes diametrically opposed assets. His strength is he’s got all those assets. For all those who want Live Nation to die, you’ll be stunned at the Holy War you will unleash.
For all the talk of a Live Nation monopoly in touring, agents can book an entire arena tour using independent promoters. Live Nation is not necessary, which speaks to Rapino’s point that he’s got to pay or someone else will. The only problem is everybody else is not public, they can afford to pass. Whereas Live Nation’s got overhead and is a public company. The best way to solve Live Nation’s problems would be to refuse to overpay for talent. But that might make investors nervous.
Then again, SFX/Clear Channel/Live Nation has never worked. Billions were written off. The company was spun-off. It appears the road to success is via new products. Irving keeps telling us he’s got them in the pipeline, that we’re gonna be wowed. We’ll just have to wait and see. The music business is full of hype, and hype means less than ever before, but Irving controls all those artists, and he can get a critical mass to say yes whereas his competitors cannot.
While trumpeting the success of Bon Jovi, the Internet is rife with discount offers. Most recently, the Groupon offer for the Bon Jovi/Kid Rock show in Chicago
We can debate demand all day long, but we know two things…
1. AEG overbooked.
2. AEG is ignorant when it comes to the Web. Fuck up online and everybody knows. Just like everybody knew overnight about Napster and started stealing music, everyone knows about concert deals in a matter of minutes. Begging the question how savvy AEG truly is. In a world where Zynga is triumphant, does Randy Philips even know what Zynga is?
The acts don’t want it.
The acts love Ticketmaster, it takes the heat. See, we price our tickets low, it’s Ticketmaster ripping you off! But Ticketmaster is kicking back to the promoter, so he can make a profit. So where’s the truth?
The truth is the promoter has two sets of books. One for the artists, another for themselves. They’re at a loss in one and a profit in the other. The acts drove them to this. Then again, promoters have overspent, which brings us to buying…
There’s just not enough money in it. Gripe about Ticketmaster all you want, but at least its system works. Live Nation went with Eventim and it was a disaster. So who’s going to invest in the infrastructure to create a system that works, that can sell that many tickets quickly, at such small margins? Yes, you want a competitor that will sell tickets cheaper, when a competitor would have to charge more! And costs include not only infrastructure, but generous deals for facilities and promoters. And needless to say Ticketmaster will compete for that business. But more importantly, where is the deep pocket that’s going to pony up all that cash for such a meager return? Speak with venture capitalists, they want exorbitant profits, and they’re just not there in ticketing, certainly not without raising fees.
Some think the problem with Live Nation is in the buying. That they’re overpaying and they’re not allowing local decision-makers to do their jobs. In other words, is all promotion local? Prior to now, superstars would sell out everywhere. Now we’ve seen even the Eagles can’t fill stadiums. End result, concert promotion is no longer solely about money, but creativity. Which acts do you put in which buildings on which day at which price? It can’t be done on a centralized/national basis, because no one individual has that knowledge. In other words, you’ve got to trust Michael Belkin and Danny Zelisko to do their thing, let them promote, no one knows their markets better. Or, their contracts run out and they go independent and eat your lunch… Because now that everything doesn’t sell out, and buying requires intense innate knowledge, he who runs nationally is in trouble. We’ve seen this happen in radio. Centralized programming allows you to cut costs and make a short term profit, but your audience decreases, because people no longer like the product.
Irving Azoff has to get everybody on the same page.
Or else chaos will continue to reign.
Live Nation is the biggest buyer of talent, Live Nation is the only entity that can effect change. And never forget that Live Nation controls so much talent. All-in ticketing? Must be instituted to regain consumer confidence, but few agents and acts are willing to get on board. It’s got to get done. And only Irving can bring ticket prices down.
Live music will continue to be played. It’s just a matter of which acts will be presented and by whom.
Demand is key.
But acts must be willing to leave something on the table, not go after every last dollar with endless touring at high prices. Then again, legacy acts need to tour every year for the income…they literally need the money. So how you fix that problem…
And the problem of consumer confidence. How do you get people to buy early at a high price? Only by making all seats available and instituting either price protection or refusing to allow discounting.
As for airline seat pricing, the so-called "dynamic pricing"… That’s fucked. It shouldn’t be about extricating the most dollars from the marketplace and putting it in the hands of artists, it should be about insuring that hard core fans get good seats at fair prices. Paperless ticketing allows this.
America for too long has been about winners and losers. The gulf between rich and poor is so wide you can’t even see across. And now we want to institute this in the concert business? Music was always cheap. It was for everybody. Didn’t matter how big your bank account was, you had equal access. And unless you resort to Bulldog gigs, few customers at exorbitant prices, and that certainly didn’t work, you’re gonna have to draw a lot of people. So those people have to have a great experience. People play the lottery because they think they’ve got an equal chance of winning. What if every week a rich person won? Or $1000 lottery tickets had much better odds than $1 ones? How many would play then? It’s all about the aggregate. This is what screwed up the labels. They wanted few people to pay a lot. Whereas it’s about getting a lot of people to pay a little. In other words, you don’t want to be the airline industry, but the cell phone industry. And in wireless, you don’t get a better connection if you pay more. And in wireless they’re always looking forward, to better service, i.e. 4G and new products, i.e. data as opposed to voice. In music it’s all about new acts. But where are these new acts? And it’s about a better experience. Better food, treating the consumer with respect as opposed to ripping him off.
Live Nation is riddled with problems. But the company is an easy target. Everybody in the food chain must look at himself for solutions to gain traction. From the acts to the managers to the agents to the promoters. Right now, no one trusts anyone and it’s all about the dough. Once upon a time it was about the music. Decades ago. But thankfully, the big players in music are getting older by the minute and nimble-minded youngsters will eat their lunch. Just watch.