Sunday, November 16, 2008

Toilet Paper And Soap Are Recession-Proof... Expensive Concert Tickets? Not So Much


No ticket sales

Friday night I was in Glendale trying to find a book on Senegal since I'm going to Dakar for 4 or 5 days on my way to Mali. As long as I was there I figured I'd have dinner at my favorite Italian restaurant on the east side of L.A. They know me well and I can usually slide right in, although sometimes on a busy weekend night, it's not so smooth. Friday was plenty smooth. About a quarter of the tables were empty. I asked the owner how business has been. He said it's following the stock market, "one day up and three days down." He also said that there's no possibility of a profit for 2008 and he's praying he can pay his rent, taxes and employees. And his business is only off by 15%! I asked because another restaurant I love may have to close, their business off by 25%. I was there the other night and I was the only customer. They closed early.

That the entertainment business is notoriously resistant to macro-economic trends is a truism stemming from how well cheap entertainment managed to do during the Great Depression. It hasn't really be true-- or cheap-- since then. And this time around the Biz is being crushed by its own Bush-era greed and excesses. Despite boosterism from free-market admirerers, the entertainment business, especially the sectors involved in overpriced tickets, has been hemorrhaging red ink for a couple years; it's getting worse now.

Nobody in the Biz wants to talk about it-- or admit that ticket sales are in the toilet... or already flushed down it. I'm on the Board of a business 100% dependent on concert ticket prices. We spent virtually our entire last Board meeting discussing how to cut back... on everything, and to prepare for the worst case scenario.

I could be wrong about this but I think most music biz types shudder if they hear they or one of their projects has been mentioned in Bob Lefsetz's newsletters. His latest starts with a definitive attack on one of rock's last remaining heroes: "Neil Young is a jerk." I like Neil-- and his music-- a lot and I wouldn't categorize him in the same terms as Lefsetz. But Leftsetz isn't altogether wrong about one thing-- something that goes way beyond Neil. Concert tickets are way too high-- part of a bloated system as unrelated to delivering good music as HMOs are to delivering quality health.
With even the Wall Street guys unable to pay the ridiculous prices for great seats, the business is learning a big lesson. It is not recession-proof. As for the bands who've toured the same markets, year after year, with no new hit material? How many times do you need to see the Stones? They don't sell out anymore.

Some artists still do, usually one with cult audiences like Madonna. With tickets to her shows selling between $350 and $55 a pop, every single one of her recent concerts sold out including 4 nights at Madison Square Garden, 2 nights in Chicago, 2 nights in Oakland, 2 nights in Boston and a night in East Rutherford, NJ. Lucky for her all those shows were before the gays decided to put all their boundless energy into fighting for equality and against Mormons. And if you're not Madonna... ticket sales are looking dismal, even beyond dreck like Charlie Daniels, Five For Fighting or the must-see nostalgia combination of Great White, Asia, Dokken and Sweet. Last week a panic-stricken Ticketmaster started experimenting with a new concept: easing off on brutally ripping off their customers.
Ticketmaster is famous for fees that concert goers love to hate. Now the ticketing giant is experimenting with dropping those fees in an attempt to gain customers in an increasingly tough economic environment.

Tickets for the Eagles' upcoming concert will be available without any Ticketmaster convenience fees, and if you print your tickets at home, no delivery or handling fees.

The predatory monopolists have worked out a deal with The Eagles to bring down the cost of the tickets so that they band wouldn't suffer the fate of so many older artists and have to cancel their tour.

High prices are turning off concert goers, even though promoters have actually persuaded musicians to stop gouging their fans and have actually started lowering ticket prices slightly after two dismal years. As the reality of the Bush Economic Miracle and what appears to be a full-fledged economic collapse, it may be too late. And even if fans are willing to scrape up the money for overpriced tickets, there is widespread fear in the music biz that they will be spending far less on merchandise and at the concession stands, a major source of income.

The sports teams also having a tough time, having similarly priced themselves into a precarious situation in hard times. In Friday's NY Post Phil Mushnick reported an ugly scene in Memphis where the Knicks played the Grizzlies. Watching on TV he writes that "nearly every shot showed rows and rows of empty seats. The most expensive seats, from courtside and roughly 25 rows up, were almost all vacant. And expensive seats for Grizzlies games are on the NBA's low side, $100-$200 per. And this was just the Grizzlies' third home game of the season. The box score claimed that attendance was 10,129, eight more than the club's previous game in the 19,000-seat FedEx Forum. But if that were the case, most patrons were seated directly behind the TV cameras." An eyewitness claims there were 4,000 people there. And it gets worse.
In Sacramento, where the Kings would regularly sell out the 17,300-seat Arco Arena, the home opener was played to at least 5,000 empty seats - and attendance has fallen since. Indiana, Philly and Charlotte are way down, too.

By late spring, you'll likely hear and read that a couple of NBA and NHL teams are close to suspending operations, unable to make rent and payroll, that corporations that bought arena naming rights and businesses that bought big-ticket advertising are behind in payments. There will be more layoffs than layups, more undertakers and no underwriters.

There will be no new vanity-purchase buyers, no consortiums with which to consort. Even the new reliable among team investors and sponsors-- casino owners and operators-- are bleeding millions.

If you follow hockey, you probably already know what a disaster that's been. Pat Hickey reporting for the Montreal Gazette paints a bleak picture that is bound to get much, much bleaker.
In Atlanta, they have experienced the three smallest crowds of the past four seasons. Attendance has dropped 15.7 per cent to 13,384.

The Islanders are on life support as owner Charles Wang tries to get a new arena to replace the Nassau Mausoleum, which is the oldest and smallest building in the NHL. The latest rumbling is that a frustrated Wang would be willing to sell to the right bidder or, if he gets desperate, to Jim Balsillie.

The Lightning and Devils are down, and Columbus, which sold out every game in the 2001-02 season, had only 10,424 fans attend a Monday night game against Anaheim. That was the smallest crowd for the Blue Jackets in the history of Nationwide Arena.

Cheaper seats have helped Dallas turn things around, but attendance has dropped considerably in Colorado, where the Avalanche once sold out 487 consecutive games. That streak is a memory.

Attendance is down 6 per cent in Los Angeles, where the Staples Centre is filled to 83.4 per cent of capacity. But my spies there tell me that - as is the case in many other arenas - the nightly attendance figures are inflated.

Economic reality isn't going to be denied and vast empires based on unrestrained greed are crumbling before our eyes. Lucky so many of us get by so well with virtual entertainment (and Depression era cheap movie tickets) these days. Looks like NASCAR is about to lay off 1,000 employees.

Damn real estate market!

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At 7:44 AM, Anonymous Anonymous said...

Speaking of concerts.....Jimmy Carl Black of Mothers Of Invention and Geronimo Black fame passed away in Germany on 11/1/08. Old friends, and old (and some young) musicians are holding a benefit concert on 12/7/08 between 11:00am and 5:00pm at Thousand Trails Campground, 4700 Crown Valley Road, Acton, Ca

At 9:11 AM, Anonymous Anonymous said...

How do we know that some of the more popular among the so-called "music shows" down Branson way aren't secretly subsidised by cultural-conservative groups seeking to promote an idealised vision of Amerikanischer Realkultur?

At 9:26 AM, Anonymous Anonymous said...

I used to love going to concerts when I was younger. But I haven't been young for quite some time, alas, and haven't been to a concert since seeing Sarah McClachlan a couple of albums ago. The only reason I stopped going was that I couldn't bring myself to pay that much money for a couple of tickets. If you live in a rural area and have to drive for an hour or three, you can add gas prices to the disincentive.

At 10:37 AM, Blogger CJS said...


Really apposite observation. I've not been to an arena-sized show in years; not so much as a result of high prices, though that's certainly a factor, but because the nature of the experience is so far away from "music" by any yardstick I care about:

all the best,


At 10:50 AM, Anonymous Anonymous said...

It's too bad that I already shun concerts and sports events. I am unable to save money by not going.

At 11:52 AM, Anonymous Anonymous said...

i wanted to take my daughter to see Springsteen the night before she left for college. They were $150 a pop...

What about cable tv? Will they adjust
their prices too as consumers stop subscribing ?? I pay way too much money for stations that I don't watch and aside from greed I never understood why I can't pick and choose stations.or shows.

At 2:49 PM, Blogger tech98 said...

Too bad stadiums and venues have been chasing the free-spending corporate crowd while screwing the pay-from-their-own-pocket regular fans.
I stopped going to concerts and games years ago when I became fed up with the price gouging for everything, and the feeling that I was nothing more than a money tree to be picked clean.
Maybe they can get a government bailout from the 'free market' corporate-socialists of the 'Bush Boom' (Kudlow).


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