Can data really solve this mess? The 40 percent figure was first revealed by Live Nation CEO Michael Rapino last year, in the chambers of Congress of all places. And now, it's part of a freshly-published research report that focuses on a pressing cheap seats problem. Because it's not that Live Nation doesn't want to fill every seat in every house, they just don't know how.
This is a discussion that involves all sorts of possible remedies and sticky issues, including variable pricing, Groupon, aftermarket scalping, and distressed disposable incomes. And the core question is less about whether these seats can be filled, but whether they can be filled profitably.
Enter PRS for Music, which plunged headfirst into the Groupon idea with an econ-heavy analysis. Back in May, Live Nation unveiled GrouponLive, which is exactly what it sounds like. But case studies involving bombing shows by Britney Spears and Bon Jovi seem to raise more questions than answers, while introducing a serious downside.
Here's the riddle: Groupon can definitely fill seats, but they can also generate a culture of bottom-scraping fans. "Concertgoers may well expect further last minute discounts to appear next time around," the researchers stated. "While this might work with clothing stores and beauty spas, it does not sit easily with the intimate relationship of a band and their own fans."
But wait: Rapino also noted that the average concertgoer drops $12-14 on marked-up hot dogs and beer. So, getting them into the door sounds like a good idea, except that bargain-hunters may be a totally different breed. "Discounting tickets might mean more ancillary spending on items as consumers shift their budget around," the report continues. "However, as is often claimed, discount sites attract coupon-cutters who rarely spend more than the minimum required to participate in the offer."
Others simply hate Groupon for its cheapening side-effects, which may be long-term. "People would come to expect it year on year and it would damage the viability of the festival in the long-term," Festival Republic organizer Melvin Benn told BBC Radio.
And this just might be a bad solution for bad promotion. "Groupon only makes sense when your show stiffs and you're staring down the barrel of a gun," one promoter told the PRS authors. "As a promoter, if you're doing your job properly, you should never find yourself staring down the barrel of a gun."
Pictured: inflatable crowd-fillers from Crowd In a Box.
brooklyn habitat Monday, December 19, 2011
and the problem here kids? too many people with too many demands. artists want a huge piece, execs want $20 million salaries.
can't solve that with data.
Ignacio Monday, December 19, 2011
This company is a dog.
@BenjiKRogers Monday, December 19, 2011
Going to shows sucks in 2011.
Visitor Monday, December 19, 2011
Not for the 1%
or err, the 60%
visitor Monday, December 19, 2011
OK, so we've devalued recorded music for the last 8 or 9 years to the point where no one wants to pay for it, under the pretext, that it's gonna be ok because people will go out to see artists... But, oh right, we've devalued not only recorded music, but music in general. This is the way the world ends, not with a bang but with a whimper.
Drew I. Tuesday, December 20, 2011
In the case of Live Nation, the music is not necessarily devalued (not directly anyhow). Live Nation's services are OVERvalued.
Personally, I have decided to not purchase 10 or more concert tickets this past year when I took a look at the Ticket Master service charge. In some cases, the service charge was just under 50% of the original ticket price. I wanted to see those concerts and was willing to pay the artists, but I was not willing to feed the Live Nation beast. These fees are exorbitant and I avoid supporting this business model whenever possible.
visitor Monday, December 19, 2011
while we're at it... nobody WANTS to go to a stadium show. people go to stadium shows because they can't see these artists in small venues. a model that used to make sense when nosebleed tickets were cheap.
@Studio67records Monday, December 19, 2011
The Groupon tactic could turn it into a "ryanair" saga and you'll pay 50 & sit next to some toerag that paid 20...
@bestillplease Tuesday, December 20, 2011
Let me tell you about the time when Live Nation didn't market a show by a Latin artist to the local Latino community...
Livenationrules Tuesday, December 20, 2011
I think live nation needs to book more latin music like Menudo, Ricky Martin, Geraldo, and shit like that
@MrJoseAntoni Wednesday, December 21, 2011
Well done Live Nation.