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).