Net downloads driving concert prices higher?

The BBC has posted an article which loosely correlates increased concert ticket prices with decreased album sales due to internet based piracy.

Of course, various folks have grabbed on to this story and making totally wild claims. “InterWebs Piracy is Killing Artists!!” or “Internet Downloads Are Teh B3ST THANG EVAR!!!11!1111”.

What a total crock of crap. I’m sure the RIAA will jump on this and milk it for all it is worth.

There are three major flaws with the whole line of reasoning.

First, and as mentioned (sort of) in the article, it isn’t just Concert tickets that are shooting through the roof. Sporting event and other entertainment events are also way up, too. Last time I checked, it was pretty damned difficult to download next Sunday’s big game on Pirate Bay.

Secondly, and also as the article mentions (without actually telling the full story), very very few musical artists have ever made any kind of real money off of album sales. This has always been the case. Just look at the margins at the iTunes Music Store; the RIAA walks away with 66+ cents on the dollar of every song sold, only pennies of which go to the artist (actually, to the exploitation contract — yes, “exploit” is what they call it). And, yet, that isn’t enough.

Outside of the superstars or supergroups, artists that want to make money in the music biz have always had to do so through touring, touring, and more touring.

Finally, the most damnable flaw of the claim is the total lack of acknowledging simple supply and demand.

The article specifically calls out Madonna’s upcoming tour as an example of skyrocketing ticket prices.

Madonna is a superstar. Every show she plays will be sold out. That is, every single show on this tour will run out of a supply of tickets before demand has been met.

Las time I checked, Madonna still likes money. Regardless of her hypocritical claims otherwise (what a crock! “Now that I have so much money I even gave my child aged daughter a $10,000/month credit card, I have decided money is evil… now where is my butler, my hand picked tibetan mountain berry blessed tea is a bit cold”), she really likes having lots of money and wants more of it.

Is it any surprise that ticket prices would be skyrocketing in a situation where there is vastly more demand than supply? Madonna makes more money. Her management & touring company makes more money. The artists on tour with her [might] make more money. The venue makes more money. This is every capitalists dream situation.

Same goes for U2, Rolling Stones, David Bowie and every other artist mentioned in that article.

I saw that Eddie Money was playing at a nearby bar. $25 cover at the door. I’d bet Eddie would love to see tickets for his show go for $325. Wrong end of the supply/demand equation, unfortunately…



6 Responses to “Net downloads driving concert prices higher?”

  1. William Henderson says:

    The whole premise of this argument is basicly that Artists don’t just want to make as much money as they can, they NEED to make more money because they are loosing it. The article then goes on to quote some of the most successful artists in the world. What the hell? Obviously these people don’t NEED to make more, they just WANT to make more (ie as much as possible). If we replace need with want, the argument is more like this:
    1) Artists (and the music industry) want to make as much money as possible
    2) People will pay x for concert tickets
    3) Artists will charge x for concert tickets
    4) People don’t want to pay y for downloads
    Conclusion) Artists will charge x + y for tickets to make up for it.

    Obviously something is screwed here. If people are too cheap to pay for a CD, then why would they pay more for tickets? The fact is, people are just getting more and more willing to shell out for tickets, and nothing more. The argument that people would pay more (and this is the key here – Artists don’t CHARGE more, people PAY more) for a ticket than they usually would if they didn’t download music is totally bogus.

    .william

  2. ssp says:

    I thought that (non-superstar) artists are said to not make money from their tours. And that seemed reasonable to me, considering all the time and material effort the touring takes, particularly for a whole band with all its members, instruments and support people. So even before the record industry takes ‘its share’ I doubt that there will be much money left.

    Yet, touring is said to be essential to get the word out and boost record sales. And the fans – and often the bands as well – get this special experience of course.

    Somehow the article seems to claim the opposite – money being earned from touring rather than albums… which just sounds like a silly twist to blame ‘downloading’ for everything that the music executives get wrong.

  3. Chucky says:

    “There are three major flaws with the whole line of reasoning.”

    Ugh.

    This really isn’t all that complicated.

    Audio recording sales rose for over 40 years until the appearance of Napster, at which point they stopped rising. Almost a decade after Napster, recording sales are still below that peak. You can make all the sophistical arguments you want, but you’re departing from reality when you decide not to factor this into your reality.

    Pre-Napster, the big names in the industry would make their money on shipping recordings. With that revenue stream flatlined, concert sales have taken over as the viable revenue stream.

    To understand why this would translate into higher ticket prices, you need to understand the Brazil-ification of industries with flatlining revenues. A previous example would be live theater. As revenues stopped growing in live theater, the middle range of the industry basically died, and what was left was off-Broadway at the very bottom, and the biggest shows at the very top. And those shows at the very top began to rise greatly in price. The economics at the top in a Brazil-ified industry involve playing to the “spectacular”, because nothing else works monetarily.

    Now, the pop music industry became Brazil-ified simultaneously with the appearance of Napster. You can make sophistical arguments that it was just coincidence that things played out that way, but that’s sophistry. Similarly, the current Hollywood slump coincides with the ramp up of Bittorrent, and again you can explain that away through other causes if you don’t care about reality.

    ——-

    The thing I always find odd is the utter hostility among the computer industry for artistic I.P. In one sense I perfectly understand it. Computer folk are going to hate DRM and want information to be free. But at the same time, plenty of folks in the computer industry are making their money off I.P. too, so you’d assume there would be some type of understanding.

    But I guess until it takes food out of your particular mouth, there’s no good reason to feel any solidarity with I.P. creators in any other industry.

    We hate them creepy RIAA types. There’s nothing else at stake here. Move along. Nothing to see.

  4. Chucky says:

    “If people are too cheap to pay for a CD, then why would they pay more for tickets?”

    People aren’t too cheap for a CD. People just aren’t willing to pay for something when they have the alternative of getting it for free.

    Try setting up a concert with opportunities for folks to easily slip in for free and see how it affects the box office.

    No one likes being a sucker, and so few pay if they don’t have to. It’s not about being cheap, it’s about human nature.

  5. Jon H says:

    The main reason the big-star concerts are so expensive is that they know their core fanbase makes a lot more money than they did twenty years ago. Not only is there high demand, but the market will bear very high prices.

    I’d expect that big stars with audiences consisting of teens still charge low ticket prices. And, of course, the Eddie Moneys and the county fair acts are playing for regular ticket prices.

    The main ‘culprits’ of the sky-high ticket prices, and possibly the originators, are baby boomer acts like the Eagles.

  6. Concert Tickets says:

    Having experence in the industry I think that is a big pile of garbage blaming prices on increased downloads. The bottom line is that promoters and performers saw what tickets were selling for on the secondary market and adjusted their prices to get an even larger slice of the pie.

    My favourite is Bono telling his fans to help relive Third World Debt but last time I cecked U2 and their $100 plus weren’t exactly funneling these funds into Africa.

    Great Topic by the way.

Leave a Reply

Line and paragraph breaks automatic.
XHTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>