Today’s News: Amphitheaters in Trouble

12 Aug

This week’s Rolling Stone reports that large outdoor venues are having an awful summer.  It’s not the god-awful heat (here in Chicago, the heat index is over 100 degrees yet again), or the pigeons that crapped all over the the Kings of Leon at the Verizon Wireless Amphitheater in St. Louis on July 23rd.  The problem? It’s the economy, stupid, experts say.  Of course people facing unemployment and struggling to make ends meet aren’t going to be spending as much to go see shows.  But there’s more than just the general economic malaise crippling major tours such as Lilith Fair, the Jonas Brothers, and Rihanna.  The major concert promoters, Live Nation and AEG Live, have been alienating fans with high ticket prices and excessive fees.

“As overall ticket sales have decreased 10 percent so far this year, Pollstar reports sheds in particular have suffered a ‘huge drop-off.’ ‘It’s just the way [promoters] operate that kills the sheds,’ says Doc McGhee, manager of Guns n’Roses and Kiss. ‘There’s a tremendous backlash this year.’

A lot of it is simple economics: Live Nation, the world’s largest promoter, owns or controls 40 of the nation’s amphitheaters.  Saddled with these properties – which each hold around 20,000 fans – the company needs to book enough summer tours to keep them open during the short season they’re open and often ends up overpaying in bidding wars with competitors like AEG Live, which specializes in arena shows.  That leads to ever-higher ticket prices, which are a tough sell in a down economy.

And because top artists often receive the vast majority of ticket revenue, Live Nation makes much of its money nickel-and-diming fans for ancillary revenues – $44 million annually from parking and $223 million from food and beverages.  Last year, two fans at PNC Bank Arts Center in Holmdel, N.J., filed a class-action lawsuit against LiveNation because they were charged a $6-per-ticket parking fee whether they intended to park or not. (Live Nation filed a motion to dismiss the suit, but a judge denied it in June).”

The dirty secret here is that everyone knows what’s going on, but nobody is doing anything about it.  Artists are stuck working in a broken system, and fans don’t have an alternative if they want to see their favorite acts.  “I don’t think the amphitheater thing is dead, it just needs a price correction – they need to make it user-friendly,” according to Bert Holman, manager of the Allman Brothers Band and no stranger to the amphitheater circuit.  “They’re gouging everything – the food is high, the parking is high.”  John Scher, co-manager of Simon and Garfunkel, has a similar take in the article: “The original concept of the lawn being a place that was casual just became very expensive, unaccomodating, and just uncomfortable.”

Live Nation knows all this too: why else did they eliminate service fees at all their amphitheater shows for all of June, and aggressively cut prices to get fans to come at the last minute?  This, however, has the effect of alienating the biggest fans, the ones who get up early to log on for full-price tickets to their favorite bands and pay full price, only to find that the show didn’t sell out and they could have saved money by waiting.  This turns into a vicious cycle – the next time the band goes on tour, these alienated fans are going to think twice before buying their tickets early.

All this news is more evidence that the Live Nation monopoly on America’s biggest tours is bad for fans, bad for bands, and bad for live music in general.  The full story is only available online to subscribers, but check it (and Matt Taibbi’s excellent piece on the failure of financial reform) out on newsstands.

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