Saturday, February 28, 2009

LIve Nation / Ticketmaster Merger and the Future of Live Music? Stuff Everyone's Forgetting

Lately there's been a lot of back and forth discussion in the industry about the proposed Live Nation / Ticketmaster merger and its possible effects on the music industry (particularly the live concerts end of the business). With the recent judiciary hearing on whether the merger should even be allowed, more of my colleagues, former bosses, mentors, friends, and even foes are piping in.

Do I have a solution? No. Just suggestions. But whether the merger happens or not, there are some points everyone seems to be forgetting:

1. Despite the current economy, Movie ticket sales are up because people are looking for an escape. They could be spending that money on music tickets instead.

Why aren't they? Because just 20 years ago you could buy a ticket to see a top act for only a little more than twice the price of a movie ticket. Now a concert ticket costs more than 10 times the cost of a movie ticket.

Doesn't anyone else in this business think it's insane that in many markets, an airline ticket is cheaper than a concert ticket? (In Los Angeles in recent years, I've seen fares to Europe that were cheaper than the face value on a ticket to see the Stones or Madonna.)

The music business is collectively putting itself out of business by way of greed, and it's gotta stop.

2. Everyone seems to forget the simple concept of perpetual audience growth: new customers across several demographics.

Whether it's Hannah Montana or the Jonas Brothers, or the Eagles or Bruce, when you break it down, the majority of "new" customers at big shows are the kids of parents who happen to be wealthy enough to take them. Since it's the parent buying the ticket, that means in reality, it's actually one demographic for all those artists. (As opposed to what would have been two or three separate demographics a mere 15 years ago.)

With such an ultra-targeted demographic (whose kids are off to college soon, and whose 401ks have imploded) how can there possibly be growth?

Hannah Montana and Jonas Brothers fans grow up. And God knows I love the Eagles, Bon Jovi, and Springsteen, but however much we'd like them to, they can't tour forever (though I'm starting to believe Bruce and Bon are part Energizer Bunny). Who's the next round of arena acts, and who will go to see those next acts? Remember what's happened to symphonies in the US during the past 20 years? The audience is literally dying off without a new audience coming in.

3. More on audience growth: In many areas of the US we now have an entire generation and a half of kids who haven't had music programs in their public schools. (I know a lot of you reading this have kids in private schools with great music programs, but your kids get tickets for free, so we're not talking about them.) How can you generate interest in something that doesn't exist?

Ask the average 17 or 18 year old who goes to a public school what was the last concert they went to. (Or better yet, if they've ever even attended one in their life.) I stopped asking intern applicants "what's the last concert you went to" long ago because most haven't been at all.

And in case anyone hasn't noticed, MySpace and Facebook are actually a passive, as opposed to an active, way to enjoy recorded music. It's thinly disguised as active, but the main attraction on MySpace isn't the music; it's how many Friends kids rack up to become "famous" themselves. (If music were really the main attraction, wouldn't they be called MusicPlace or MusicBook?)

4. Do we really need a new damn arena every 10-15 years???

New arenas = higher venue costs= higher ticket prices. Yes, in many cases fans voted for them to be built. But fans are concerned with economic prosperity for their towns, not show expenses. That's our job.

And now that some of the banks from those branded arenas have imploded, now what?)

Suggestions for dealing with the challenges

I don't have a solution, but I do have suggestions. At first glance some of them may look like the ship has sailed, but in the right hands, I really don't think so. Everything comes back around, just in a different way.

1. Figure out a way to get back to basics: Music. Not ring tones (Muzak is dead, won't ringtones, which are essentially the same thing on a different device, die too?). Not texts. Not games. Not anything that doesn't put the music at the forefront.

2. Hire people who start in music and work their way up...
Not former telecom execs, not computer guys, not your brother-in-law who worked at HBO...not people from other industries. Hire people with a passion for music and for making money at it. I'm not saying don't hire business-minded people. I'm saying, hire business-minded people who want to make money in music, not just make money.

After all, isn't that the secret to Irving's success? Regardless of what you think about him, the man knows music and the people who perform it.

Remember the first piece of business advice successful people always give to someone who's tying to figure out a career goal: "Follow your passion, apply hard work, and the money will follow."

And what about Clive Davis? The man worked with Bob Dylan 1963 and is still a name in the business because he gets the music.

3. Remember the concept of "Sell to the Masses if you want to wear a Rolex". We've gotta find a way to keep ticket prices at bay so more people can afford an escape.

Selling to the masses worked for Ebay. Selling to the masses also got our current president elected.

Some artists are doing their best to try to keep ticket prices at bay. But there's a hell of a lot of pressure to make those Boxscore numbers so people will keep hiring them, and it's become a vicious circle.

4. Work with team owners and city officials to find alternatives for building new arenas. Empty arenas would be everyone's problem, so everyone needs to be in on prevention.

5. Have more respect for the fans. Remember back when you were a music fan? (If not, I'm sorry, but you're in the wrong business.) Fans pay our salaries, so the least you can do is be grateful. If not for the fans, none of us would have ever had a music industry job in the first place.

And I'll let you in on something: more than ever, fans are aware of their importance. Why do you think over the past 15 years fans are more likely than ever to sue if something goes wrong at a show? It's because they resent the flat-out greed they've observed in the industry over the past 15 years.

We've gotta stop holding music fans hostage with ticket prices before we lose them completely.

6. Think like the entertainment moguls did during the Great Depression.

The media is filled with people comparing today's economic crisis to the Great Depression. Yet despite the unemployment rate of 25% in the 1930's, the entertainment business was booming. Expensively made movies were kicking *ss at the box office. It was also the dawning of the Big Band era, which ushered in commercial radio and the recording industry as we'd come to know for nearly 60 years.

In fact
it was only a couple of decades ago that the entertainment industry was still thought to be one of the few industries that was "mostly recession proof" because people would always need an escape.

If people in the '30's took advantage of the opportunity to develop business models and multiple new technologies that created demand and made live music affordable for consumers, why can't we?

I haven't said anything in this we didn't already know. It's just time we remembered it.

Randi Reed
Founder / Editor in Chief,
c 2009