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October 17, 2002

Napster Driving up Concert Tickets

This article makes a good case that file sharing is driving up concert ticket prices for rock concerts.

Why? Because artists once priced concert tickets below what the market would bear in order to sell records. In the era of file sharing and fears of lost royalties, musicians now may be treating concerts as their one guaranteed money-maker, so are driving up prices to maximize revenue.

Makes sense and fulfills the argument of John Perry Barlow years ago that touring and other direct performance-related revenue would replace album sales in the Internet era. See a more recent short piece here or his classic Selling Wine Without Bottles.

Posted by Nathan at October 17, 2002 08:43 AM

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I've heard repeatedly on the net and in print that artists make little to nothing on CD sales. That the recording companies make a lot, and then use creative accounting to make sure that the artist gets nada.

If that's generally the case, then Napster wouldn't have much effect on concert prices.

I think that in the end, concert tickets are going up to make more money (in the short-medium run).

If anything, I'd think that Ticketmaster would bear more blame.

Posted by: Barry at October 17, 2002 10:23 AM

this might be one of the most ridiculous pieces of tripe I've ever read about any facet of the music business.

it not only misrepresents (or under-represents) basic facts in the matter, it goes to make an assertion that has no basis in any factual evidence.

so, ignoring the plain truth, we got a nice yarn about how one writer "suspects" things are. granted, mr. krueger thought his version of reality was more entertaining than the truth. and in that, he's correct. fiction is frequently more entertaining than fact.

the impact clear channel has had on the music business in this country is no less remarkable or important than the consolidation of the big record distributors. clear channel has managed to do what no company has done before and trump everyone else in the marketplace in a few key and interlocking areas. namely, concert promotion, radio, and radio promotion.

what this has accomplished is to give clear channel unprecedented control over the music industry, through the proverbial backdoor. if you didn't understand completely the terms I used above, then this may not be clear, please allow me to expand on them for a moment.

>>>>concert promotion
in controlling concert promotion they have influence in setting rates for performers (or, to be more exact, not in setting the rates themselves but in actually meeting what the artist wants, or not), who plays at what venues. to some extent, who gets sweetheart rates and who doesn't.

this is the most obvious of the three. in controlling a large portion of the radio in this country they can decide which tour to promote and just as powerful, which one to ignore. they control those same musical artists fate as they play the music that helps that artist be successful, or not. it effectively blanks out entire markets or sectors of the market that might otherwise be avenues for exposure for an artist.

>>>>radio promotion
this is most slippery. it's also the most frequently misunderstood. I'm not talking about kids driving around in wildly painted vans handing t-shirts with call letters on them out at malls. I'm talking about the prevailing system that controls what music gets played on what station. until now, one monolithic organization never controlled that. now clear channel does.

keep in mind, this is not only about "control" or "monopolies". it's about money. this is an enormous revenue stream for clear channel. if they're taking in the proverbial shorts financially in one division, say in concert promotion (in an effort to starve the regionals out of business) then they can make up for it in another area (radio promotion). in then end, they come up and in the mid to long term run, they come out the only ones to survive only to reinforce their power further.

mr. newman thanks for a great website. I've enjoyed it immensely since I found it a couple of months ago.

Posted by: ice weasel at October 17, 2002 08:22 PM

Didn't mean to give ClearChannel a pass, but the escalation in prices to the stratosphere cannot be explained just by ClearChannel surcharges.

There does seem to have been a general break among performing artists in demanding top dollar on tickets-- the $100 and now occasional $250 Broadway tickets being part of this. Sports tickets have gone so far up that many ordinary fans can't afford to go. Egalitarian pricing seems to have gone out the window in favor of milking the box office.

Which may argue that it is less Napster per se than this more generalized predatory pricing.

Posted by: Nathan Newman at October 17, 2002 10:19 PM


thanks for responding.

I don't think you gave clear channel a pass. I think mr. krueger did. and he did so by failing to actually list the numbers that would make the case utterly compelling (and dare I suggest a tad less tawdry and interesting).

the truth is, and it's repeated over and over again thoughout the history of recorded commercial music, more exposure is good. more exposure means more people grow to become familiar with your music and people always tend to buy (well, the great mass of people at least) what they are familiar with. comfortable with if you will.

to date, I have yet to see one decent argument contradicting this basic fact.

now, you hit on something when you mention "predatory pricing" but you don't quite nail the proper target.

one of the other forces driving up the price fo concert tickets is the artists desire to cash in in a big way. why does paul mccartney need to charge a c-note for the cheap seats? is the rent due on the castle or something? of course not, he can do it because people will pay it. his fans are older, more affluent. they'll cough up the cash to "see a beatle" in the flesh.

but maybe mccartney is an extreme example.

back to my point, concert tickets are going for a number of reasons. briefly:

fewer players to compete, ticketmaster, clear channel, a few regional promoters. that's it. the venues are sewn up. the truth is, if a major artists *wanted* to charge $30 for a ticket, they couldn't find a place to that would let them play. there's not enough cash to spread around at that level.

don't ever underestimate the greed of clear channel. they've cut a very ruthless swath through two of the sleeziest (legal) industries in this country. they've done to further strengthen their own position, not because they have some altruistic vision of the way the music business should be.

anyway, "napster" is a popular whipping boy for many things. of course, the real lunacy of the statement is that napster doesn't even exist any longer except as a metaphor for a number of p2p applications.

you're right in mentioning tha touring is one major source of revenue for the big, established artist. as record company filtered revenue has been harder and harder to tap* artists have sought more intense merchandising and touring as a substitute for that money.
* and this has nothing to with "napster". it has to do with the cd being where it is in the life of any given product. there comes a time when the market is saturated and consumers, failing a new media to rebuy older titles on, and failing new titles that capture their interest, spend their money elsewhere.

the music is going through an enormous change right now. the paradigm which has been in place for nearly a century has been challenged by a completely new one. we've had to rethink copyright laws and methods of distrubution. a good deal, if not the majority, of the "hard times" in the music business is simply a lack of vision. the stance from the majors has been, and continues to be, that they can legislate their way of doing things even in the face of overwhelming consumer demend to the contrary.

the market will rebalance itself at some point. either through legislation or consumer action. the major players in this game will have to counteract the enormous inertia they've built up after decades of doing things the same old way, as it were.

the real question is, when, or perhaps more cynically, *will* the consumer demand these changes.

I'm rambling so I'll end here, for now, but saying thanks again for a great website.

Posted by: ice weasel at October 19, 2002 12:17 AM

Join the Linux community. Linuxwaves.net

Posted by: Catherine at July 6, 2004 11:51 AM

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