- The Washington Times - Thursday, July 6, 2006

So you shelled out big bucks to see Paul McCartney and the Rolling Stones last year.

“They’re legends,” you reasoned. “They won’t be around much longer.”

This summer’s concert season poses a potentially tougher sell, as ticket prices for less-than-legendary acts such as Latin pop songstress Shakira and country couple Tim McGraw and Faith Hill rocket into the stratosphere.

Amid fierce competition and absent big-name acts such as Mr. McCartney, the Stones and U2, promoters this season are trying to squeeze as much capital as possible out of second-tier acts, according to a recent report in the Wall Street Journal.

That’s undoubtedly true, as far as it goes.

Yet something deeper may be at play, namely this: For nationally popular bands, the live concert is the last bastion against the onslaught of new technology. Unlike recorded music, the concert can’t be stolen or otherwise replicated.

Bootlegs or official live recordings, Internet streams, even the increasingly popular alternative of movie-theater simulcasts are but poor keepsake substitutes for the experience of “being there.”

“The live experience is unique,” says Gary Bongiovanni, editor in chief of the concert industry trade magazine Pollstar. “Because we’re social beings, there’s something about being in the same room with people who have the same interests as you — whether it’s rooting for your favorite sports team or seeing your favorite band. You don’t get it sitting in your living room.”

Concert promoters, who shoulder the costs of renting venues and paying upfront guarantees to artists, know this — which is why, after a brief respite in the first half of 2005, ticket prices once again are spiraling for several acts.

Bands that appeal predominantly to young audiences, such as the Strokes, are still a cheap date. But Madonna tickets are edging close to the Stones’ benchmark of $400 apiece, and Barbra Streisand, long one of the industry’s boldest envelope pushers, is asking more than $750 for the best seats on her upcoming tour, which stops at Verizon Center in October.

At the micro level, one suspects the artists are aware of this, too. They know that concert tours are their last fiscal refuge in a fast-changing world of digitized music consumption and that though they may not be able to persuade fans to buy their new CDs or influence the fans’ use of file-sharing Web sites, they can ration their public accessibility — and hence, charge a hefty premium for it.

Mr. Bongiovanni speaks of Mr. McCartney and the Stones “recapturing” from ticket sales the money they no longer earn through new CD sales.

“We have a commodity that’s very unique,” says industry veteran Alex Hodges, executive vice president of House of Blues Concerts Inc., which promotes concerts and owns branded clubs in 10 cities. “It lasts three hours. The only thing the ticket is worth the day before the show or the day after it is to be able to tell your friends that you’ll be there and that you were there. It’s fun to have that ticket in your pocket.”

There are, of course, other factors driving the spike in ticket prices.

One is a general increase in overall affluence; consumers, perhaps feeling flush from the real-estate boom of the past few years, are spending seemingly indiscriminate sums not just on rock concerts, but on sporting events such as the Super Bowl, the World Series and college basketball’s Final Four series, says Gary Wilkos, principal owner of PreferredTickets.com, a Las Vegas-based entertainment ticket broker.

Incidentally, concert industry observers most often cite secondary-market outlets such as Mr. Wilkos’ as the cause of escalating prices.

The public’s eagerness to spend more and more of its disposable income on entertainment, and to pay exorbitant sums for the very best seats, becomes a kind of self-fulfilling inflationary mechanism: The face value of tickets is in many cases one step behind their actual market value, which creates a staggeringly lucrative after-market online in the short term and induces artists to charge more in the long term.

Despite their resemblance to scalpers, online ticket brokers such as StubHub.com and TicketsNow.com are legal — and business is booming. (Exactly how much it’s booming is unclear; analysts agree only that the overall number is in the billions.)

“The secondary market for the most part has been relatively strong for the first part of this year,” says Mr. Wilkos, “and we’re anticipating a steady summer and an ever bigger increase in the fall.”

Promoters such as Mr. Hodges have no love lost for secondary ticket brokers. “I can tell you, we’re getting killed by the brokers,” he says.

Though brokers pay rightfully for tickets, he explains, the resale market dampens demand for remaining tickets. And while brokers occasionally are left holding blocks of tickets for shows that prove less popular than expected, they share none of the upfront costs of concert tours, including security and insurance costs. Their profits come, essentially, risk-free.

Mr. Bongiovanni says secondary brokers complicate an already tricky pricing model: “You can research all you want, but ultimately you’re guessing [about how much to charge]. It’s a very difficult target to hit because it’s moving.”

Mr. Hodges says promoters are toying with several ideas to combat brokers, including auction-style sales and tickets inlaid with photo-identification.

Meanwhile, what all of this consternation suggests is that the concert experience is the most bankable segment of the music economy: Brokers wouldn’t be having such a field day if demand weren’t so high.

Booming business, however, doesn’t mean everyone will come away happy. One can see on the horizon a concert industry that looks like the airlines, with their Byzantine pricing schemes, overpriced concessions and class divisions.

As Mr. Bongiovanni says, “People not only want tickets — they want good tickets. And there’s only one first row.”


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