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Musical acts' summer tours encounter heavy weather

With CD sales diving, top artists are seeking to recoup lost revenue with tours, creating a glut at a time of economic contraction. 'It's brutal out there,' says one manager of alternative music acts.

July 16, 2010|By Chris Lee

This summer, the music industry has been repeatedly rocked — not by big beats, keening vocals and loud guitars, but by lackluster ticket sales and concerts canceled by a growing list of major artists.

This month, pop diva Rihanna postponed six dates on her "Last Girl on Earth" tour. The Lilith Tour was forced by poor attendance to cancel 10 concerts, and Christina Aguilera pulled the plug on her 20-date tour because of "prior commitments" in June. The Eagles scrapped stadium shows with country superstars Keith Urban and the Dixie Chicks because of sluggish ticket sales in May. U2 postponed its North American tour after lead singer Bono underwent emergency back surgery. The Jonas Brothers pulled out of a number of North American dates on their world tour. And "American Idol" producers canceled eight engagements and rescheduled other dates on the "Idols Live!" tour.


FOR THE RECORD:
Concert ticket pricing: An article in Friday's Section A on summer concert woes said that the top ticket price for a Chicago concert featuring the Eagles, Keith Urban and the Dixie Chicks was $895. That price was for a VIP package, which included extras such as a seat in the first 10 rows, a pre-show dinner and cocktail party, and parking. The highest price for a non-VIP ticket was $203. —

"It's brutal out there," said Jordan Kurland, manager of such alternative music acts as Death Cab For Cutie, She & Him and Say Anything. "The economy is still not great and there's a lot of distractions people can choose from. Going to big rock concerts is not one of them."

In particular, the downturn has spelled trouble for Live Nation, the country's biggest promoter of live music, which on Thursday informed investors that the company's adjusted operating income for 2010 is projected to drop by $40 million, or nearly 10% below last year's, despite a merger with Ticketmaster that enhanced Live Nation's market position and required Justice Department approval. U2's tour postponement alone will cost the company $6 million. And Live Nation said it expects a further 15% income drop for the top 100 tours in the second half of 2010. The company's shares fell 11% in trading Thursday.

Rival promoters complain that Live Nation has contributed to the downturn by initially overcharging for tickets, then overcompensating by slashing prices in a last-ditch effort to fill seats. Tickets for the Eagles' tour stop in Chicago, which also featured Urban and the Dixie Chicks, ran as high as $895, and the lowest-priced entry to Aguilera's postponed tour cost $125.

Critics say the high prices were triggered by the company overpaying top artists — in some cases, handing over nearly the entire box office take — in order to secure their touring commitments against competitors. .

"They may well be worried about the amount of money they've promised some acts," said Gary Bongiovanni, editor of Pollstar. "Their bread and butter comes from parking and concessions."

Representatives for Live Nation declined to comment for this story.

With CD sales taking a nose dive over the last decade, the concert business enjoyed unprecedented growth with pop acts relying upon their touring incomes to offset lost revenue. But according to a study released this month by Pollstar, grosses for the top 100 tours in North America this year were down 17% from the same period in 2009, with losses expected to continue through year's end.

According to Randy Phillips, chief executive of concert promotions giant AEG Live, the industry's downturn comes courtesy of a "perfect storm" of factors.

"Artists aren't making enough money on sales of recorded music so they're trying to make money on the road," Phillips said. "The problem is, you've got too many tours, the same acts going through the [touring] system year in and year out. On top of that, the economy is in a very fragile state of recovery and the Consumer Confidence Index is very low.

"You have years of mismanagement by the concert industry, treating the consumers like they're idiots. All that coming together at one time? It's like one big stop sign," Phillips added. Despite that, he characterized AEG's concert tours as doing "exceedingly well," without offering specifics.

According to Chang Weisberg, founder and head of Guerilla Union, the concert promotion firm behind the successful Rock the Bells hip-hop tour, part of the industry's current woes can be attributed to a glut of artists.

"The concert industry has seen overall ticket sales grow exponentially year after year," Weisberg said. "But unless you've got a festival or a concert with something unique — a band that has stayed out of the marketplace, a new or unique record — the odds are it's not going to be the hottest ticket in town anymore. There's been a correction. Acts can't just show up and expect to fill seats whenever they want."

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