Chapter 2: Making Money on the Road

Describe how ticket prices have changed over the past 30 years.

Between 1975 and 1996, concert ticket prices increased less than 2% when adjusted for inflation. There was a rapid increase in ticket costs between 1996 and 2007.

Recoupable Income:

Earnings that are given back to the investor, such as album advances.

What is a major drawback of tour sponsorship?

Labels are becoming increasingly involved in touring revenue with arrangements such as 360 deals.

What is the general range of merch rates?

Less than 10% to greater than 25%.

Example of an in-kind tour sponsorship that an act might secure:

Zakk Wylde's endorsement deals with such products as tuners, microphones, amps, guitar strings, wah-wah pedals, and speakers.

How have film ticket prices changed in comparison to concert tickets?

Between 1975 and 1996, film ticket prices increased 37%.

Example of a cash sponsorship that a touring act might secure:

Black Eyed Peas' $1 Million sponsorship from Honda Civic (2006).

Reserved Seating:

Gives fans their own piece of "real estate" for the entire show; worth more than General Admission.

Example of a media sponsorship that a concert promoter might secure for a show:

Marcie Allen Cardwell created John Mayer's Blackberry sponsorship deal.

Merch Rate (AKA "Hall Rate" or "House Rate"):

Percentage of gross sales of merchandise paid to the venue for the band's right to sell merchandise on-site.

What are some of the products sold as merch?

T-shirts, keychains, leather jackets, CDs, etc.

Gold Circle Seats:

The best 800-1,000 seats in the building, with 80% of those on the floor and the rest within a premium view of the stage.

Who has the most control over the cost of a concert ticket?

The headlining act's manager, business manager, and promoter.

What are the three major sources of income that a touring act might earn?

Ticket sales, merchandise sales, and sponsorships.

Why is label tour support for an act not considered income from touring?

Tour support from a label is more of a loan and must be repaid.

Name the different types of venues:

(1) Small to Large Clubs, (2) Ballrooms, (3) Theaters and Performing Arts Centers, (4) Auditoriums, (5) Mid-sized Arenas, (6) Large Arenas, (7) Amphitheater, (8) Stadiums and Grandstands, and (9) Motor Speedways and other alternative venues.

Scaling:

Offering multi-tiered pricing for tickets.

Per Capita (AKA "Per Caps"):

Per head spending on merchandise.

General Admission (GA):

Situation in which patrons are not assigned specific seats.

What is tour support?

Financial investments toward touring efforts.

Merchandising (AKA "Merch"):

The second most important revenue stream for artists (after ticket sales).