Summer Tours Get Icy Reception From Frugal Music Fans

Economy, Bloated Ticket Prices Blamed for Worst Season in More Than a Decade

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NEW YORK (AdAge.com) -- The economy may be in recovery, but the summer concert season is on life support.

After a remarkably profitable summer last year, live shows featuring usually bankable artists are suffering from poor ticket sales, a cramped touring roster and, as a result, an unsettling array of cancellations. A recent article in Billboard magazine christened 2010 the bleakest summer touring season in more than a decade, despite big-box promoters like Live Nation slashing service fees in an effort to fill venues.

Many point to bloated ticket prices and still-cash-strapped audiences as the prime culprits of this year's slump, and some analysts speculate that last-minute incentives by promoters to pack houses have conditioned audiences to wait to buy, which prompts skittish promoters to cut engagements.

Christina Aguilera canceled her Live Nation tour this year just days after tickets went on sale, citing insufficient time to prepare.
Christina Aguilera canceled her Live Nation tour this year just days after tickets went on sale, citing insufficient time to prepare. Credit: Kevin Mazur

Last week Live Nation, which promotes the "American Idol" tour starring the top 10 finalists of Fox's hit reality show, cut eight dates from the tour and rescheduled others in this summer's lineup after a relatively lackluster prime-time ratings season. This, after high-profile cancellations or cuts from acts like U2, John Mayer, Limp Bizkit, Rihanna, the Jonas Brothers and Lilith Fair disappointed eager music fans worldwide.

Despite the fact that sales were higher in 2009, many analysts say there is a simple enough explanation for this dry year. Yep, you guessed it: the economy.

"Yes, business is down, but why would anyone be surprised given the economic environment?" said Gary Bongiovanni, editor in chief of concert industry trade publication Pollstar. "The concert market is oversaturated every summer, so even in the best of economic times, there will be tours that underperform financially."

But if that's the case, why did the business do better last year when the economy was in worse shape? Mr. Bongiovanni said many of last year's concerts thrived because tickets were purchased just before the economic crisis was fully felt by concertgoers. He estimates that there's been a 15% drop in tickets purchased this year.

Mr. Bongiovanni said the cancellations aren't abnormal either, even if they are high-profile. "Tours are canceled every year, and some, like Limp Bizkit, should have never been booked in first place."

Aguilera backtracks
Analysts agree a common pitfall for some artists has been to launch a tour without a healthy single or album to help anchor it. Pop star Christina Aguilera, whose 2006-2007 "Back to Basics" world tour grossed $90 million, canceled her Live Nation tour this year just days after tickets went on sale, citing insufficient time to prepare Live Nation, which claims to have drawn 52 million concertgoers to its events in 2009, declined to comment on ticket sales to Ad Age, but web chatter blames poor early sales numbers as the real culprit; her latest album, "Bionic," hadn't even been released yet and was met with lukewarm reviews.

Mr. Bongiovanni said Ms. Aguilera's decision to tour in the notoriously oversaturated summer months without a solid following for "Bionic" was a "misstep," and that Live Nation was smart to bump the tour to 2011, when more demand, increased familiarity with the album and more disposable income in audiences' pockets (hopefully) will await.

"In today's world, most people only go to one or two shows," Mr. Bongiovanni said. "It's easy to be a fan of somebody and still elect to not buy tickets this year."

Even tours that appeal to the baby-boomer set, which can usually shell out top dollar for tickets to nostalgia acts, have lagged this year. Acts such as Tom Petty and the Eagles have slashed dates.

Live Nation's reaction has been to eliminate service fees for tickets sold in June, much like it did last summer when it offered the same deal on specific dates. It's a strategy that aims to soothe consumer frustration with hidden costs in addition to the already-bloated base ticket prices, and to ultimately assure as many seats are filled as possible, which helps stimulate ancillary revenue from high-priced food and merchandise sales.

A recent report from Ben Mogil, a financial analyst with Thomas Weisel Partners who follows Live Nation, said the company brought in an average of almost $18 per concertgoer last year in ancillary sales -- i.e. T-shirts, merchandise -- alone. In the report, Mr. Mogil said the numbers suggest cutting service fees for a short period of time is a sound financial strategy for the promoter and, when ancillary sales are considered with ticket sales, the season isn't as weak as many make it out to be.

Still, Mr. Bongiovanni said the service-fee cuts are a bad long-term plan for the concert industry. "We're training our audiences to wait for the sale that will come later," he said. "Nothing upsets consumers more than finding out they paid full price when someone else paid half of that -- especially if that person ended up with better seats."

Not all tours are suffering. Festivals like Coachella and Bonnaroo performed well this year, and according to insiders at the Radio Advertising Bureau, most local station-sponsored festivals are expected to clean up this summer. Chart-toppers Lady Gaga and Taylor Swift, as well as the well-matched James Taylor/Carole King ticket, are also doing a tidy business.

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