Why greed is the biggest problem for the live music business
Or what you won’t find in the Live Nation quarterly reports
It’s always interesting when a number of people in different parts of the music-media ecosystem start coming to the same conclusion. You’ll find a fascinating and well reported piece by Michael Nelson over on Stereogum about the current state of the US festival scene. It starts off with the battle for New York festival space between big swingers Live Nation and AEG and then takes a macro look at the festival scene in the United States.
Nelson’s views on the latter are well worth reading. “Over the past several years, countless articles have been published positing some version of the question, “Are music festivals a bubble waiting to burst?” But here’s the thing: The wait is over. That bubble has already imploded. It’s gone. Last year was pretty bad for for festivals, and this year has been even worse.
“Per The Tennessean, ticket sales for Nashville’s Bonnaroo “fell precipitously this year to an all-time low of 45,537 … The festival sold 28,156 fewer tickets in 2016 compared to . Washington State’s Sasquatch! fared even worse. Wrote The Oregonian: “Only ‘11,000 ticket holders’ showed up to this year’s Sasquatch! music festival over the Memorial Day weekend” — down more than 50 percent from the event’s usual 25,000. At this month’s Pitchfork Music Festival, “attendance overall was down,” according to the Chicago Tribune: “two of the three days were not sold out, according to promoters.” In May, England’s All Tomorrow’s Parties 2016 festival was cancelled, and in June, All Tomorrow’s Parties went out of business entirely.”
Meanwhile, on the back of Bjork looking for £99 for her upcoming show in London’s Royal Albert Hall (shades of what Ry Cooder attempted in Dublin, a move which didn’t go well, as we recall), Shaun Curran for The Independent went to find out just why such tickets are so expensive. The main reason cited by the people Curran spoke to? Hugely increased touring and production costs. Those who go to see Bjork or Beyonce (or even acts who don’t begin with B) expect an amazing show and that requires money, an outgoing which is then recouped by passing the costs on to the fan. It’s a situation which is not going to change according to the live music business reps who spoke to Curran, especially when the demand is there.
However, it’s clear from Nelson’s piece that such hot demand is not everywhere and many festivals are having a problem because of price and over-supply. It’s not just rock&pop&indie& alt either; this is a problem which also applies to country, EDM, jazz and metal festivals. In any another economy, high ticket prices and under-performing festivals would lead one to assume that lowering the former would have a knock-on effect on the latter and might also lead to consolidation in supply.
But this is the live music business and it’s one of the few sectors which nakedly celebrates the fact that greed is good. A lot of the greed comes down to a war of attrition between the Big Two promoters and the actions of one of them in particular. Live Nation are hoovering up everything in sight because that’s their business model. Forget sell, sell, sell, they buy, buy, buy. They bought Ticketmaster, they’ve moved into management, they’ve acquired venues and they’re purchasing any promoters who are willing to come to the dark side in return for a fat cheque.
They can point to a great looking quarterly report, but this can’t last forever especially when you look at the macro trends in the sector. Of course, when it comes to ensuring those quarterly figures remain healthy even when revenue and sales drop, are Live Nation going to cut, say, the massive salaries their executive earn or are they going to increase the price of tickets? You don’t have to be a genius to answer that one.
One of the problems when it comes to analysing the sector is that too many use the fact that some marquee festivals like Coachella or Glastonbury (or the sold-out Electric Picnic in Ireland, which is promoted by Live Nation subsidary Festival Republic) are doing well year in and year out as a reason to cheerlead for the entire scene. Yet a deeper dive into the figures, like Nelson did, shows that the opposite is actually true. When you’ve long-running fests like Bonnaroo, a marquee event which was recently purchased by Live Nation, experiencing a huge drop-off in attendance – and they’d Pearl Jam and LCD Soundsystem as headliners this year – you know there is increasing trouble t’mill.
This naturally has a knock-on effect throughout the entire sector. For instance, if one of Live Nation’s hundreds of events is doing poorly, they’ll cut back on the spend at more successful events to offset the losses. For instance, this may involve cutting running costs or spending less money on talent or perhaps increasing capacity and ticket revenue. The overall aim of this game is to keep hitting quarterly figures to give Wall Street dealers the kind of thrill the rest of us get when LCD Soundsystem do “All My Friends”. It will be interesting to see just how long this rigmarole will continue, especially when they begin to run out of runway to keep acquiring stuff – and just how much damage it will cause to the entire sector.