The Rising Price of Concert Tickets
According to Statista, the average ticket price for music tour admission in 2018 worldwide was $94.31, up from $84.63 in 2017. Since we’re all fairly used to paying these prices to see some of our favorite big acts, we often don’t question it. But if you were a concert-goer back in the 90s, you may be wondering what happened to the $30 – $40 tickets to see bands as big as Sting and U2.
The BBC found that ticket prices have risen by 27 percent since the late nineties, taking inflation into account. These rising ticket prices are all set by promoters and outpace inflation. So what’s going on?
First of all, the concerts of today are remarkably more complex and interactive than they used to be. That costs money. It’s not just a music show anymore. It’s a performance. As ticket prices increase, consumers expect one hell of a performance, too, only reinforcing the price climb.
The other issue at play is the impact music streaming and downloading have had on the revenue that artists take home. The Entertainment Retailers Association reported that while digital music brings in less revenue than record purchases, its production accounts for 62 percent of the artists’ expenditures. That money has to be made up somewhere and concert tours pay the bills. This is why we see so many bands continuing to tour decades past their glory days. Concerts are where the money is.
While these stats are a measurement of the biggest global acts, what are ticket prices averaging for the smaller gigs? The Music Venue says the ticket price for smaller band concerts, those that pop up in our neighborhood nightclubs, for instance, has barely changed. These shows don’t have the same level of production as a major tour, are in smaller venues, and the artists aren’t demanding hundreds of thousands of dollars or more. What’s more, live music lovers are still packing these venues, likely because they know they can enjoy a great show at a half or a third of the price of the big concerts.
Concert Cost Breakdown
No matter the size of the concert, the money from ticket sales all go to generally the same places. Independent concert promoters set the ticket prices based on several factors. After they estimate their costs, including the revenue they’d like to bring home, they set their budget. Estimating costs must also be carefully weighed with expected ticket sales. These calculations aren’t easy or perfect. It’s a guessing game. Of course, more seasoned independent concert promoters have history on their side. They know where costs can sneak in, where marketing dollars can be saved, and how to negotiate deals with long-term partners.
When you take a broad look at the concert cost breakdown and keep in mind those driving factors mentioned above, it’s not difficult to see why ticket prices have soared. Below are the big buckets of expenditures the promoter must consider in his or her calculations.
Artists often get the bulk of the ticket sales. There’s more to that than meets the eye, however. The talent is most likely more than one person. A larger band must split those proceeds. There’s also their crew that needs to get paid. Then there’s the hotel, transportation and gas, and personal needs of the artists that are included in this cost. These costs will fluctuate greatly amongst bands. For instance, a local band or a band that is performing only one night won’t require hotel accommodations for themselves and their staff.
The size and popularity of the band will also determine their asking price. A larger band recognizes their income will need to be divided, so they often ask for more than a solo act. A band in high demand can also ask for more than an undiscovered band with a smaller following.
Lastly, promoters may decide to hire an opening act before the headliner act. This will increase costs as well, but can also draw in a bigger audience for increased ticket sales.
The venue is another big expenditure for the promoter. Large arenas can cost upwards of $50,000 while local music venues can cost a few thousand dollars. The larger venues can be more challenging to book for an independent concert promoter, as many of the larger promotion companies snatch these venues up for the bigger tours, but they can be had if the promoter knows the right people. While the big arenas are costlier, they also hold more people, equalling more ticket sales.
Smaller venues are less expensive than arenas and amphitheaters, but they aren’t always available, either. As consolidations continue to squeeze independent promoters, competition for venues is heating up, raising prices to book them.
Venue costs go beyond the structure of the building. Promoters may have to source lights, sound, staging, and a production team if the venue doesn’t provide it all. Don’t forget parking attendants, security detail, and a clean-up crew. If all of these have to be brought in and aren’t part of the venue package, costs can quickly escalate.
Marketing and Advertising
Marketing and advertising are often an overlooked expenditure because so much of it is up to the promoter. Some promoters use solely social media to promote their events, while others include radio, print, and television into their strategy. Obviously, the more channels, the higher the cost.
Then there’s the merch. Everyone wants merch, right? The Future of Music Organization reported that merchandise accounts for approximately 6 percent of a rock band’s income. Merch builds a brand and satisfies loyal fans who are proud to boast about their love of music.
Promoters have to determine what their expected return on their marketing efforts will be. Obviously, the more the event is promoted, the more tickets will sell, but all of that marketing eats up a substantial portion of the budget. It’s a risk-reward thing that promoters must manage well if they want to come out ahead.
The cost to access the ticketing price must also be budgeted. Most promoters sell their tickets on their websites that directly link to the ticketing platform in the background so purchasers don’t have to navigate to a separate website. Depending on the ticketing platform used, a promoter can choose to either pass ticketing fees onto their attendees, or they can absorb the fees, deducting them from their payout.
Some platforms allow promoters to keep their booking fees but charge an initial set up cost and monthly license fee to use their software. Some charge per ticket sold, while others offer a flat monthly rate.
Fortunately, there are plenty of ticketing platforms out there, each with their own pros and cons, but highly accessible for independent promoters. Promoters can evaluate different ticketing platforms easily by searching updated reviews, features, and fees, keeping one principle in mind: the easier promoters make it to purchase their event tickets, the more likely they will sell more tickets. Friction is their worst enemy.
One of the best investments an independent promoter can budget for is process management software built for live music promoters. Managing the artists, venues, marketing and budgets drain an enormous amount of energy and time, both of which have a monetary value.
The software automates the tasks promoters do every day and integrates the systems they use to perform those tasks into a consolidated platform. It keeps track of all of the details so promoters can spend more time doing what they really love. Instead of wasting time on data entry, spreadsheet management, phone calls, emails, and texts to manage rider requests, deposit tracking, and budgeting, they are booking more shows.
The software can integrate with the ticketing platform, for instance, to update financials in real-time. The promoter has instant access to exactly how well tickets are selling so they can make more informed decisions sooner. No manual reports, no phone calls to the ticketing company, no waiting until the day of the show to know the break-even.
The cost for this type of software is minimal but reaps so many benefits, all of which can be scaled to every event going forward. For promoters, it’s the ultimate investment into the future of their business as they can do more with fewer resources.