Friday, October 23, 2009
RICK KARR: Most musicians historically have never actually earned their livings by selling records or downloads. Only the top superstars ever got rich off of royalties. Instead, most musicians have earned their livings by putting butts in seats, playing live, touring.
[SOUND OF CHEERING CROWD] But the concert business has been going through some pretty substantial changes, too.
[ROLLING STONES MUSIC/CHEERING CROWD] Let's go back to 1975 when the Rolling Stones recorded this concert album, Love You Live.
[ROLLING STONES SINGING/UP AND UNDER] You could have seen the group that had already declared itself the world’s greatest rock n' roll band for $8.50, that’s eight dollars and 50 cents. In today’s terms, that’s just 34 bucks. By comparison, the last time Mick and Keith and the boys hit the road, four years ago, most tickets were 100 dollars, in other words, three times as much.
[“IT’S ONLY ROCK ‘N ROLL/UP AND UNDER] Some longtime observers of the concert business say there’s a good reason for that spike in ticket prices. Back in ’75, the Stones played in 26 cities in North America. That meant that 26 different concert promoters handled the shows. But through the '80s and '90s, a couple of mega-promoters started to buy up their smaller rivals nationwide. John Scher has been promoting rock shows since the 1970s. He’s worked with everyone from the Grateful Dead to Liza Minnelli, mostly in the Northeast. He says fans are paying more because the consolidated promotion conglomerates beat their local rivals by paying more to artists.
JOHN SCHER: Say there was XYZ artist and that artist was normally seeking a guarantee of 250,000 dollars a night to do an arena tour. Well, these consolidated companies were saying, well look, if you give us the whole tour and you play where we want you to, we'll pay you 350,000 dollars a show.
RICK KARR: In the end, one company out-consolidated all the others, SFX Entertainment. Before long, it was acquired by broadcasting giant Clear Channel Communications. But Scher says bigger wasn't better. Those publicly-traded firms couldn't please both concertgoers and their investors on Wall Street, so Clear Channel sold off its concert arm in 2005. It’s now known as Live Nation, and it’s been struggling ever since. Its shares are worth less than a third of what they were at their peak. Live Nation’s executives think the way out is to merge again, this time with Ticketmaster, home of the so-called “convenience charge.” Regulators haven't given it the green light yet. They're worried about the merger’s impact on ticket prices. Independent concert promoters like John Scher say going up against Live Nation is already hard enough.
JOHN SCHER: You simply can't compete with them. All you can do is choose to be a second-class citizen.
RICK KARR: Did they ever come to you and make you an offer and, if they did, why did you say no?
JOHN SCHER: Well, I answer that question one of two ways, whether my wife is listening or she’s not. [LAUGHS] The truth is that they did come to me. They made me very, very good offers. I turned them down, and it was a terrible mistake on my part. Why did I make that mistake? Probably for two reasons. One, I didn't believe in the model. I didn't think it could be profitable and I didn't really want to be part of something that was unprofitable. Two, I think being in the artist development business, both as a manager and as a concert producer, has historically done well for us, although not of late, and, you know, we thought that we could carry on. What’s terrible about it is, forget the promoters. It’s the public. When you’re looking at 250- and 500-dollar tickets as being the norm for big shows, and if, you know, you’re going to spend 250 dollars to see the Rolling Stones or to see U2 or to see Madonna or Paul McCartney or, you know, any of the giant acts, that’s probably the one concert you can afford to go to all year.
RICK KARR: Doesn't something have to give at some point, though? I mean, these artists aren't going to be on the road forever. At some point, you know, Paul McCartney’s going to say, I can't tour any more. The Stones, I'm assuming at some point Mick and Keith [LAUGHTER] are going to say, we can't tour anymore. Won't the market correct itself at some point?
JOHN SCHER: Well, there’s no question that something’s going to give, and I think we're right on the edge of that. I just, a little earlier today had a conversation with a facility manager who had historically had an arena that was doing 50 to 60 show a year. This year it’s going to be under 40. It’s a direct result of there are less and less big acts. It used to be as the older acts retired, broke up or, God forbid, died, there were younger up-and-coming acts. But if you look now at what are considered the sort of younger superstars, you know, you look at Radiohead, you look at Coldplay, you’re looking at acts that have been around for 15 years. There’re very few, very, very few artists that have become arena or amphitheater headliners with any staying power. There are, every year, a couple of artists, often in the urban world, that become very, very big for a short period of time, but the American Idol model, it’s about now, not about three or four or five years from now. So, will it correct itself? I think it'll correct itself, but there'll be the Dark Ages of the concert promotion business probably for anywhere from five to 10 years.
RICK KARR: John Scher, thanks a lot for joining us.
JOHN SCHER: Nice to have chatted with you.
RICK KARR: John Scher is co-CEO of Metropolitan Entertainment, a concert and live event promotion firm in New York City.
[STONES MUSIC UP AND UNDER] By the way, the Rolling Stones Love You Live and four other concert albums by the band are about to be reissued by Universal Music. You'll probably be able to pick up all five for less than the cost of a single seat on their next tour.
[STONES’ ”HONKY-TONK WOMAN/UP AND UNDER]] Coming up, the changing definition of success. It’s not about how many fans love you but about how much they love you. This is On the Media from NPR.
[STONES SINGING “HONKY-TONK WOMAN” UP AND UNDER]