Virtual Reality Concerts To Begin This Summer

I'm a big proponent of virtual reality, especially when the audio is done well, and many have predicted that the technology will eventually be a boon to concerts. We're going to see soon enough as virtual reality concerts will actually begin to roll out this summer.

NextVR, which has been a leader in VR broadcasting of sporting events, has teamed up with LiveNation to broadcast a series of concerts, although no artists have been named as of yet. There will be a limited number of VR music events this summer, with a full schedule planned for 2017.

The NextVR broadcast will be available via Samsung's Gear VR using the Oculus Home app, although they will also most likely be available on other VR platforms as well.

LiveNation/NextVR aren't the only companies jumping into the concert broadcast game. iHeartRadio and Universal Music Group previously announced that they would also broadcast VR concerts this year.

Virtual reality concerts hold great promise because it gives the viewer a feeling of actually being there and watching from the best seat in the house, which many feel may eventually eclipse attending an event. Paying $200 for a nosebleed seat might not be a suitable option when you can get a better view from your home while still feeling immersed in the event.

The same can be said for sporting events as well, as NextVR recently signed a 5 year deal with Fox Sports, although there may be more technical challenges in this niche than with music.

One thing's for sure, VR is taking beginning to take off, even though it still hasn't hit the general public yet, as more and more companies are jockeying for position.

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Pandora's Ticketfly Purchase Good For Artists And Shareholders

Streaming music service Pandora reeled off a blockbuster purchase yesterday, coming to an agreement to acquire the online concert ticketing service Ticketfly,

The company announced that it purchased the ticket company with a combination of cash and stock amounting to around $450 million. Ticketfly’s gross revenue was around $500 million last year which resulted in net commissions of around $35 million. The company, which specializes in selling tickets for small to medium size venues, has shown some significant growth in the first half of 2015 with a net of around $55 million. 

The purchase could be classified as a coup for Pandora, as it moves the company into an area ripe for disruption that also puts it in a position to finally turn a profit.

Concert revenue has become the major source of income for many top tier artists, more than making up for the losses incurred when the industry switched to digital music. The problem is that the areas of music discovery (mostly radio) and consumption via streaming music services haven’t integrated very well with the concert industry, which means lost revenue opportunities. Artists below the superstar level have yet to benefit to the same degree from the increased concert revenue as well.

Only about 20% of the US population attended a live music event last year, according to the giant concert promoter LiveNation. The reason that the figure is so low isn’t because fans have an aversion to crowds, but mostly because they’re not aware that their favorite artists are performing near where they live.

Having Ticketfly as an integral piece of Pandora may be an answer to this dilemma. 

While Pandora has yet to turn a profit from its music service, one thing it does boast is close to 80 million active users. Read more on Forbes.

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Can Kid Rock's $20 Ticket Change The Concert Business?

Kid Rock has gone completely against the grain of the concert industry by touring behind the idea that a cheap ticket makes more money than an expensive one in the long run. While the average ticket price across the industry is almost $80, Rock has decided that $20 is more in range with what he'd like to see his fans pay.

Rock got promoter LiveNation to buy in after he agreed to revenue share 50/50 on the proceeds, rather than ask for a guarantee like most artists, and so far it's paid off, as every show has sold out and multiple nights have been booked at the same venues. And it gets better than just the low ticket price for fans.

• Walmart offers the tickets with no additional fees. You pay a flat 20 bucks.
• Parking is included in the price of the ticket
• Beer is $4
• Tour shirts are also $20 (they're usually at least $30 to 40 for most artists)
• Free samples of Jimmy John's sandwiches at the venue
• Free coffee available at the end of the show.

Now there are a thousand premium tickets available at higher prices, but they're also being sold directly to fans to keep the scalpers at bay.

This is a great idea because not only does it expose Rock to potential new fans who can afford to check him out because of the cheap prices, but it reenergizes his fan base as well. There's nothing like seeing a great live show to get your fans talking, and buying.

Not wanting to sound too old school here, once upon a time concerts were cheap enough that you could go several times a week and still have money left over. That exposed you to music that you'd have never seen otherwise, and allowed you to make a musical connection in the best way possible - from a live event. Unfortunately, as the prices began to soar, that several times a week became several times a month to today's once or twice a year. There's no way to gain new fans since the artists are only playing to their hard core fan base.

Kid Rock's lower prices have already caused a stir in the business, as Bon Jovi has added a $19.50 ticket to the current tour and other acts are considering something similar as well. This is a healthy trend and good for everyone involved, at least as long as the venues are full. Let's hope it continues.

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Why Direct Ticketing Is A Tough Sell

I think if you asked 100 concert goers if they liked using Ticketmaster to purchase tickets you'd get at least 99 "no" replies. After all, we all hate convenience fees and the fact that the ticket brokers get all the good seats first (not to mention the ridiculous service charge for printing your own ticket). So why can't acts just do direct ticketing themselves, and bypass the electronic ticketing services?

It turns out that's not an easy thing to do, as outlined by Louis C.K., who after some tribulation, seems to have pulled it off.

It turns out that most of the really prime venues have deals already in place with Ticketmaster, so they're contractually obligated to use them for every event. Louis found a way around it though, and found a number of theaters who would play ball, so they effectively are taking a chance on each other.

The next thing is that the secondary ticket market (meaning ticket brokers) is thriving and no one wants to upset the applecart. LCK once again tries to get around that by setting a flat rate of $45 for each ticket that can be purchased by a credit card directly from his site. What is new is that LCK holds the right to cancel any ticket if it's found that it's been resold, which could leave the secondary market dead in its tracks. In effect, he's just trying to cut out the middlemen who buy the tickets with the express idea of flipping them for a profit, maybe even from thousands of miles away.

That said, it's a tough way to do business by bucking the system. Being an artist is tough and most don't want to add another layer of complexity to their already complex lives. You have to hand it to Louis CK for looking out for his audience and trying his best to do the right thing though.

On another closely related subject, after much complaining about $13 beers, LiveNation has instituted a new $5 beer policy. As with everything in the concert business these days, it's important to read the fine print before you purchase.

* it's only good for certain shows
* it requires a $13 purchase with an $8 rebate
* it requires purchase of Miller Lite or equivalent
* it requires pre-qualifying $40 premium parking pass

It's too much to expect any kind of deal from a big faceless corporation like LiveNation. Unfortunately, this is what the live music business has become.

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You should follow me on Twitter for daily news and updates on production and the music business.

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Concert Revenue Isn't What It Used To Be

It used to be that a star or superstar act going out on tour was really going to cash in, but it looks like the good times are over, according to Pollstar magazine, considered by many to be almost the bible when it comes to ticket sales.

How about these for numbers?

  *  The revenue of the 50 biggest grossing tours in the world declined 12% last year from 2009.

  *  It was even worse in North America, as sales were down 15%.

  *  The number of tickets sold declined 7% world-wide and 12% in North America.

  *  Yet ticket prices increased by 4% despite last minute discounting by giant concert promoter Live Nation.

  *  The top 50 acts played 8% fewer shows than the year before.

  * Promoters slashed prices to as low as $10 for the Jonas Brothers, Maroon 5, Stevie Winwood and Santana, Creed, and the American Idol tours, among many others.

So who were the biggest grossing tours?

1) Bon Jovi - $201 million (U2 made $311 mil the year before)

2) AC/DC - $177 mil

3) U2

4) Lady Gaga

5) Metallica

What does this all mean? This was probably a healthy course-correction in the business. As a result, what we'll see next year is more reasonable pricing, fewer tours by acts who were out last year (you can't tour the same places with the same songs every year and expect big sales), and maybe some sanity returning to a business that never had to worry about a recession before.

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Anatomy Of A Concert Ticket Price

Ever wonder where all the money for that concert ticket goes? I'm not so sure that this chart will tell you, since it comes from LiveNation and it's obviously skewed to their needs. There might even be some truth to it from the standpoint that the real moneymaker at a concert has become the parking and concessions, since the act gets most of the door.

Here are some other figures (I don't know if I'd call them facts) from LiveNation by way of Digital Music News.

• The average LiveNation ticket price in North America increased 3 percent to $49.80 in 2010. The talent percentage was 74%, down 1% from 2009.

• Internationally, the average price was $54.30, and the talent percentage 55% (down 1%).

• The drive to relax ticketing prices is on. LiveNation indicated that 10% of tickets will be discounted in some fashion this year, up from 6% in 2009.

• Among the discounting weapons, 4-packs and $10 lawn seats were cited as the most aggressive sales drivers.

The concert business is in a tough spot this year, with many marquee acts having to cancel some shows for lack of sales (The Eagles and Christina Aquilera to name a couple). LiveNation is in the business of getting people in the seats, so they'd rather give the tickets away (or at least steeply discount them) to get the parking and concessions. But that just upsets the people that paid full pop for the ticket, which will make them less likely to buy the next time around. And people still hate the service charges (I personally won't go to a concert anymore if I have to pay them).

This situation is going to get a lot worse before it gets better.

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Festivals Score Big While Concert Attendance Down

The concert business is in real trouble. Industry gadfly Bob Lefsetz wrote  in his newsletter yesterday that uber-promoter LiveNation has cancelled 200 shows this summer because of poor advanced ticket sales.

We're in a recession, people don't have the money, they're not interested in many new acts and everyone's seen all the classic acts before. There's no incentive to pay an inflated ticket price laced with service charges, extra parking fees and outrageous beverage and swag prices.

But there's one area of the business that's hitting  it out of the park in terms of attendance and that's the festivals. Both Bonnaroo and Coachella were major hits this year despite higher prices and I think there's a major factor involved.

Festivals match the new listening habits.

Music fans no longer listen to an entire album, they listen to singles. It's Short Attention Span Theater for music, which is the perfect mentality for a festival attendee. There are usually multiple stages, so if you don't like one act, go find another that suits you. Pretty soon another act will be on to check out anyway.

Of course, a festival is a big band for the buck as well. Multiple headliners over several days with a lot of up and comers? For many, it's heaven. Of course, the conditions aren't as civilized as a concert at a modern venue, but for many, the communal nature of the event is just icing on the cake.

Europe already has many more festivals than the US, but expect that to even out over the next few years. For the concert industry, this may be on the only growth area available.

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80% Of Concerts Don't Sell Out

While the income from record sales has always been OK for top-selling artists, the real money has always been made on the road. In fact, most music industry insiders generally acknowledge that between 90 to 95% of an artist's income has been generated on the road. That's why the revelation that 80% of the shows the concert promoter Live Nation puts on don't sell out. What's more, 40% of all tickets are now going unsold!

There are a number of reasons for the recent dive in concert attendance:

1) The high ticket prices - Some say it's because of the high guarantees demanded by greedy artists while others blame it on the promoter and others blame the secondary ticket market (the legal scalpers), but whatever the reason, concert tickets are way too high. Once upon a time consumers would go to a couple of shows a month or more, but with prices for even the cheap seats now in the stratosphere, not many can afford it. In fact, most concert-goers now attend only a couple a year at most and reserve those times for special occasions.

2) It's the service charges - Everybody hates the extra charges, especially when they add up to abut 1/3rd the face value of the ticket. Let's face it, any industry that charges a "convenience fee" because you printed your own ticket at home deserves to die, or at least have the offending company die a painful death. Add in a hefty parking fee and some overpriced beverages and you've just spent the month's rent on 2 1/2 hours of temporary happiness (at least you better hope so).

3) It's the economy - Regardless of the ticket prices, if you don't have a job or are just getting by, there are a lot of other things to spend your money on rather than concert tickets.

4) Over-saturated artists - How many classic artists are doing a "final tour" for more than a second time? How many major artists have visited the same territories in the last year. The thrill is gone if you've seen the show more than once, especially if it's been recently. We've heard of major artists giving 2 for 1 or $10 and $15 per ticket deals recently, a trend that threatens to continue (good for the consumer, as long as he holds out until just before the show).

Once again this year, LiveNation is repeating its "no service fee June" by eliminating all service fees, but that's not going to solve the problem. Until we get some reasonable pricing back in the business, it will continue to suffer.

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What Really Makes Up The "Music Industry?"

Chris Castiglione wrote a thought provoking article over at Music Think Tank the other day regarding what really makes up "the music industry."

Chris cites a number of articles regarding the demise of the music industry as we know it, but postulates that the death of the industry depends on how you look at it. Until Music 3.0, the music industry revolved around the major and large indie record labels and their subsidiaries, with their trade organization (the RIAA) leading the way. The RIAA has long been the propaganda arm for the majors and those in the know would take their missives with a grain of salt. The further we get into M30, the more totally out-of-touch the RIAA (and hence, the majors) becomes with their pronouncements. That being said, it's foolish to believe that this is the totality of the music business.

In fact, there's more music being consumed than ever before, according to several recent studies, although it's being consumed in different ways and forms, which doesn't fit into the old Music 2.5 model at all. We all know it - everything has changed. The difference is that some of us change with the times and others (the major labels) don't.

So what is the music industry today? Certainly the major labels are a big part of it and still sell an enormous amount of product both digital and physical goods. That number is declining like  crazy (at least 10% a year) so the "industry" as we knew it isn't central to what the industry is today. Publishing is doing as well as ever and even growing a little (a fact hardly ever publicized) so that's not a factor either way. But parts of the industry that were just a rounding error a few years ago now have a significant impact on its overall strength.

The live concert business is growing slightly in revenue, but having a tough time selling tickets lately. Live Nation (soon to merge with Ticketmaster) and AEG have gone into the management and promotion business, cutting deals directly with the artists and bypassing agents and smaller promoters. That's become a bigger part of the industry than days past.

Music licensing is a bigger business than ever even though the individual fees have decreased. There are a lot more revenue streams thanks to the ever increasing number of cable networks.

Brick and mortar record stores and traditional broadcast radio have declined in importance in the "industry", but Internet radio and online music stores like iTunes, Amazon, Rhapsody and Spotify continue to grow. They're now a big part of the industry.

But  perhaps the largest part of the industry is the one that's the most difficult to count, and that's the thousands and thousands (maybe even millions) of independent artists that now have the ability to deliver their music directly to their fans, who consume it in silence, oblivious to Neilsen Soundscan ratings. That's the core of Music 3.0. Even though we haven't had a huge breakout from this group yet, you can be sure that's it's coming.

So the music industry has gone from being built around the major labels to a much more diverse group of related businesses. No one sector dominates like before even though they may be formidable. But the leveling of importance between the industry sectors continues as we speak. Music 3.0 is about artistic democracy, and democracy always comes slowly.

11 Interesting Moments For The Music Industry In 2009

2009 was filled with numerous interesting moments for the music industry as Music 3.0 kicked into high gear. Here are some significant events from last year, in no particular order:

1) Social Media - 2009 became the year that everyone in the music business - from label execs to artists - realized the true value of social media and began to work it hard.

2) Twitter - This was the year that Twitter became a real force in the artist's social networking toolbox as artists large and small in stature reached out to their audiences. While acts like Coldplay and Pearl Jam kept it business-like, artists like John Mayer stayed personal enough to the point where you felt like you knew him. And Justin Bieber even caused a riot by an errant Tweet from his label.

3) Concert Attendance Takes A Hit - Long thought to be immune from financial downturns, attendance dropped everywhere in the concert business as even major artists played to less than sold-out audiences. Concert promoter LiveNation even offered "No Service Charge Wednesdays" and tickets for as low as $5 to get meat in the seats.

4) Virgin Music Closes - Even though they were still profitable, music retailer Virgin Music closed it's last 6 stores, discovering that the real estate was more valuable than the merchandise inside.

5) iTunes Variable Pricing - Apple acquiesces to the major labels and institutes 3 tiered pricing. Industry pundits battle, profit increases but sales drop. Who wins?

6) Box Sets Get Innovative - Major artists take Trent Reznor's lead and release box sets, with one more elaborate than the next. AC/DC even packages their merch inside a working amplifier (see side graphic).

7) Subscription Nears The Turning Point - With the subscription service Spotify gearing up to launch in the US in 2010, the industry gets the feeling that the public is finally ready to embrace subscription music. Is the feeling unfounded? We'll know shortly.

8) Apple Buys LaLa - In what may be a precursor to an iTunes subscription service, Apple purchases the hybrid service LaLa.

9) Music Games Slump - After dominating the game scene and becoming an unexpected income source to labels and artists alike, the music game business took a sales hit as new versions of Rock Band (even by The Beatles) and Guitar Hero struggled.

10) Secondary Ticketing Exposed - The long time practice of reselling held-back concert tickets through scalpers finally came to light, with major artists like Bruce Springsteen and Bon Jovi (among others) taking big hits to their reputations. No wonder you can only get the best seats from scalpers.

11) CD Sales Come Back A Little - In December, CD sales come back like it's 2005 as multiple artists sell in the 100,000's per week. Susan Boyle comes out of nowhere to sell nearly 3 million in a month, closely followed by Andrea Bocelli.

It was an interesting year. Let's hope 2010 is just as interesting.