I
recently read a
very telling article in Billboard Magazine.
For those of you who are averse to reading Billboard Magazine (hey,
can't fault you for having taste), allow me to summarize. Here are the top ten touring artists over the
past decade:
- Rolling Stones --
Average Age: 69
- U2 -- Average Age:
53
- Madonna --
Age: 55
- Bruce Springsteen
-- Age: 64
- Elton John -- Age:
66
- Celine Dion --
Age: 45
- Dave Matthews --
Age: 46
- Kenny Chesney --
Age: 45
- Bon Jovi -- Age: 51
- Billy Joel -- Age:
64
Average
age of approximately 4000 currently signed major-label recording artists? About 26.
This is somewhat deceiving. There
are hundreds of 16-20-year-old pop princesses and boy bands, and only about
half of them are cancelled out of these calculations as soon as you add in
Keith Richards.
Going
back, this list really hasn't changed much at all in 25 years. Most notably, Kenny Chesney has replaced
Queen, and Celine Dion has ousted Pink Floyd.
Don't you feel cheated now?
Concert revenue worldwide is a $12 billion dollar industry and accounts
for just over 20% of the $60+ billion the music industry makes each year. It is also the largest source of the 2.4% of
that money the professional music industry pays its artists. Sorry, that was a
lot of statistics, and I see you've suddenly started looking like a high-school
science class on me. Let me put it this
way.
For
every dollar the music industry brings in, a quarter comes from concert
revenue. Artists get 2.4 cents, mostly
of which comes from that quarter -- since they were directly responsible for
generating it. The remaining 97.6 cents
of the dollar goes to the board room execs to secretaries, sales and marketing
people, talent managers, etc. Artists
are generally expected to use their 2.4 cents to pay for the roadies, managers,
recording engineers, t-Shirt vendors, marketing team, from their tour.
Now,
while you're drowning yourself in cheap bourbon knowing you'll never be able to
afford your own swimming pool to drown in, how many more years do you think the
music industry has before these top ten cash-cows (and believe me, the next ten
aren't much younger) are done with all but the obligatory one-off appearance at
a major sporting event or humanitarian disaster? While there have been some great bands coming
up in the past 10 years, who among them is capable of filling the gap and
keeping the large concert venues packed with fans? How will the industry make up this dent in
their revenue?
I'm
sure they have expert analysts looking into this, right? I'm sure they have a plan. After all, they've been right on top of that
whole "digital revolution" and the decline of physical media,
right? That didn't cost
them two-thirds of their total revenue.
They just made that up by suing their fans for sharing music. I bet they have plans right now to file
class-action suits against all of us who failed to purchase tickets to see
Britney's show when she came through last year.
Continuing
to raise ticket prices certainly can't be an option much longer, either. Already the top acts, with their $100 and up
sellout prices, are subsidizing small acts, which only pull in a fraction of
the audience for a fraction of the price.
Most large venues lose money, as facility charges are cost-prohibitive
for all but the large acts. (This is largely why they have done away with their
historical names and become billboards for Old National Bank, Klipsh Audio,
Verizon Wireless, etc.) Meanwhile, large acts often charge the facility
for the honor of hosting them, in addition to requiring extra security, extra
parking attendants, etc. This forces the facility to make up the lost
revenue by, you guessed it, raising concession prices. The biggest of the big acts may even demand a
portion of concession revenues as well.
Okay, maybe Jimmy Buffet deserves a couple bucks for every margarita
sold at one of his shows, but should Selena Gomez get a cut of what parents
spend on pain-dulling gin shots at the bar while their kids dance around in the
aisles? She already got the money for
the unused tickets. She's not even old enough to drink!
What's
the answer? Higher ticket prices? They will try, but the current economy and
attitudes towards popular music won't support much more. Replace one and two-band tours with more 15
band, multi-stage music festivals?
Likely. Allow venues like Klipsh that
are only used a couple of months out of the year to shut down? Hold more
concerts in sports arenas like Conseco, who can more-readily absorb a potential
loss from a bad show? Almost certainly.
I
recently heard a comparison between the music industry and the sports industry
which has completely shaped the way I believe the most-successful path to
success lies for them (more on that later, or just talk to me next time you see
me offline -- I gots me a vision). This
is another great argument for that model:
Corporate music is the turn-of-the-century New York Yankees. Under the management of Steinbrenner, the
focus of the team's purchasing power went into buying aging veteran players
that would win games and put butts in the seat.
This was done at the complete neglect of the farm system, where new
players are groomed so as to give you a ready crop of young talent to pick from
as your heavy hitters retired. The cost was passed on to the fans in the form
of higher ticket and concession prices.
I
firmly believe this is the case with the music scene. The next generation of talent is no doubt
there, it just hasn't been properly groomed yet, and neither have we the
fans. The question is, has anybody in
the boardroom noticed this? Is anybody there doing anything about this? Are we
getting ready to see another repeat of Steinbrenner, completely oblivious as to
why the more money he spends, or expects the fans to spend, the more he loses?