THE CONCERT AND EVENT
PROMOTION INDUSTRY
I Wanna Know What Media Economics is … I
Want You to Show Me!
Aimee Murray
Media Economics
A LITTLE BIT ABOUT THE INDUSTRY
What exactly is this industry about?
• This industry creates, manages and promotes live
performances and events
CURRENT INDUSTRY PERFORMANCE
• Revenue has increased
1.3% annually
• In 2010 the industry
finally felt the effects of
the economic downturn
• Decrease in ticket sales
and attendance wasn’t
across the board though
• Big acts with reasonable
pricing also saw a surge in
ticket sales and
attendance.
• Average ticket prices have
increased over last 5 years
• 2011 was the bounce back
year for the industry
Year
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Revenue $ million
14,001.4
14,870.9
16,280.1
16,926.6
17,369.0
17,854.4
20,478.6
21,803.7
22,149.1
22,685.6
21,576.0
22,111.4
22,865.1
23,665.3
Growth %
0.0
6.2
9.5
4.0
2.6
2.8
14.7
6.5
1.6
2.4
-4.9
2.5
3.4
3.5
KEY EXTERNAL DRIVERS AND
DEMAND DETERMINANTS
External Drivers
• Per capita disposable
income
• Corporate profit
• Time spent on leisure
Demand Determinants
• Disposable income
• Publicity and promotion
• Price
• Seasonality
WHERE’S THE MONEY COME FROM?
• Tickets
• Food, drink and
merchandise
• Advertising/sponsor
WHERE DOES THE MONEY GO?
• Purchases (33.2%)
• Wages (19.3%)
• Marketing (11.2%)
PROMOTERS
• Promoter—a person or company that
finds talent and funds, promotes and
markets live events (live concerts,
festivals, sporting events etc.). He/She
takes huge managerial role in the ultimate
presentation of the event
• A promoter’s success based on
consumers’ willingness to pay
• Promoters get compensated in several
different ways, depending on the
agreement or contract
• Gross participation
• Profit participation
• Fixed rate
• Split Door
TYPES OF PROMOTERS
National Promoter: Live Nation
· Largest ticket-seller and promoter of live music
· Bought Ticket Master to help them achieve title of being the largest
(bought Ticket Master for $889 million)
· Owns and operates over 150 venues in N. America and Europe
Dec 12
Dec 11
Dec 10
Revenue
$5.82B
$5.38B
$5.06B
Gross Profit
$1.67B
$1.59B
$1.41B
Operating Income
($21.64M) $18.34M ($63.70M)
Total Net Income ($163.23M)($83.02M)($228.39M)
Net Income
($0.87)
($0.46) ($1.39)
TYPES OF PROMOTERS
Regional Promoter— Excess dB
Entertainment
• Small regional promoter located in
Englewood Cliffs, NJ founded in 1999
• Promotes acts and events mainly in
the New York City and locations
throughout New Jersey
• Key Financials
• Annual Sales = $649.90
thousand
• Annual Net Income = $4.67
thousand
Local Promoter—Music Farm
• Music Farm is a local promoter
and venue located in downtown
Charleston, SC
• Location Type: Single
• Ownership: Private
• Annual Sales Volume: 0– $500
thousand
TICKETS AND VENUES
•
Tickets are highly controversial
•
Ticket prices based on how much artists
want to get paid, how elaborate the
production is and how much it will cost
to move the production (Waddell, 2013)
•
Ticket Scaling—Multi-tiered Strategy
•
Fine line between multi-tiered strategy
and dynamic pricing
Venues - locations where concerts or
performances take place.
Renting Venues
4 wall- rent whole venue out and the
people who rent do whatever they want
Participation – pay less for the venue and
then renter gets portion of revenue
References
Hoover's. (2013, April 12). Excess dB Inc. Hoover's.
IBIS World. (2013, January). IBISWorld Industry Report 71133 Concert and
Event Promotion in the US. IBIS World. IBISWorld.
McLellan, M. (2013, April 12). Live Nation Entertainment, Inc. Hoover's. New
Jersey, United States: D&B.
The Economist. (2010, October 7). Having a Ball. The Economist.
Waddell, R. (2013, February 2). Time for a Rethink? Billboard.