Why Is The Concert Industry in Decline? Simple. Live Nation
There is no real secret to producing a good concert. Just eliminate all the things that suck, and there you have it.
I have been producing shows in Canada for over a quarter century. For a large chunk of that I was lucky enough to work with a great group of people who all cared. We cared about the music, the artists, and most importantly, the fans. We wanted to make going to a concert an easy decision for fans. We wanted to make coming to Canada an easy decision for artists. As a result of our efforts we were rewarded by exponential growth in total shows, total revenues, and total tickets sold from 1999 to 2007. Our vision was always for the big picture and the long-term investment with artist and fan alike.
Then we were sold to Live Nation. The change in atmosphere was palpable. Almost immediately calls for cuts on operational costs were made. “There’s a river of nickels and dimes out there” was the mantra. We were 25% ahead of projections for our fiscal, and I had people screaming at me about show costs. One time I tried to explain to a superior that higher costs on some concert deals is actually a good thing. They are called promoter profit deals. Didn’t matter.
Imagine showing up at work, and the guy from the shop next door gets randomly hired to be your boss. The person has no experience in what you do, but they are convinced they have the answers, and everything you know is discounted. This is what it was like to be taken over by Live Nation. And it’s paying off. Right?
We hear a lot about how the concert industry is in a tailspin. I can say categorically that it has everything to do with Live Nation’s stewardship of the industry. Live Nation produces 7 out of 10 shows in North America. As operational expenses are cut, each show suffers. On the venue side, services at shows by ushers, ticket takers, security, and parking attendants were all cut.
On the concert production side, qualified production managers, marketing managers, sponsorship reps, ticketing staff, and accounting staffs were all cut. These decisions culminated in the creation of a poor entertainment option. We all have the same entertainment budget. The question is always which event gives the biggest value and is the most fun.
Live Nation’s strategy of cut…cut…cut has made for bad experiences. Why would I spend my hard earned money to stand in a long line getting in, be received by some grumpy overworked security guy, get to a seat that is obstructed, and overpay for beer, food, and parking? The artist just doesn’t have a chance to win you over. The fan experience was screwed from the onset.
Concert promoting is part instinctual, part analytical, and always forward thinking. These types of ideas are not conducive to an operation that is massively in debt; with huge cash outlays on the horizon (any one of the many 360 deals). Analysis, and projectable quarterly profits are the necessity. So cutting overhead and operational costs becomes the norm.
So what’s next? Well, like all Empires, Live Nation is experiencing it’s own decline. As it focuses harder on pleasing sponsors and shareholders, it continues to shrink its operation to what they see as higher margin events. Owner operated venues will be the focus. This leaves a huge untapped niche for those of us who want to make right, which has gone so terribly wrong. Have faith…. The concert industry is coming back.
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