Gimme Shelter: Artists Find Refuge on Road

12/19/2003 7:43 PM, Reuters
Ray Waddell

While the rest of the music business is hurting, the concert industry continues to break records. Still, some unsettling trends are casting a cloud over the touring business.

With $2.2 billion in North American concert grosses ($2.5 billion worldwide) from more than 13,000 shows reported to Billboard Boxscore in 2003, the industry not only cracks the $2 billion mark for the first time, it also jumps an impressive 25% over 2002's numbers.

As has been the trend for the past several years, dollars again outpaced "butts in seats," with attendance up by half as much, 12%. And while the average gross per show increased a modest 2% at $173,638, the average attendance per show -- at 3,895 -- was down 8.6% in 2003.

Most see ticket pricing as the major contributor to the drop in average attendance.

"The continued drop in average paid attendance is disturbing," says Alex Hodges, executive VP at House of Blues Concerts (HOB). He notes that in some cases, the numbers may reflect increased reporting at the club level and of less-successful shows.

"But in some cases it may indicate continued price issues with the fans," Hodges says. " are going to the must-see shows, and some people are simply cutting back to fewer shows and being more selective, and that will show up in average paid attendance."

Clear Channel Entertainment CEO Brian Becker told Billboard in a recent interview that his company is addressing that concern through various programs, adding that he believes that ticket prices in general are too high.

"The $10 ticket and the whole Summer of Live promotion, the GetAccess programs, are examples of things that we did to try to create opportunities for people to come to the building who might not have been able to afford to otherwise," Becker said.

And while average attendance is down more than 32% from the average of four years ago, the tide may be turning. This year marked the first time in the four-year period that the decline in attendance was below 10%.

$2 BILLION AND COUNTING

The $2 billion ceiling for Billboard Boxscore was shattered in 2003, after breaking $1 billion only six years ago. That alone, most agree, is cause for cautious celebration.

"The business is better from a year ago, maybe two years ago, but not back to being strong," Hodges says. "I think we are going to see continued improvement."

Still, Hodges believes the problems that plague the record industry are everybody's problems.

"The record company doldrums do not bode well for developing new artists. But new artists are still being discovered by the fans anyway -- just not enough of them," he says. "And there is a tendency to take a strongly developing new artist to the so-called 'next level' by jumping two or three levels and ensuring some red ink."

That may be one reason why touring activity has never been higher. Artists in many ways control their own destiny by touring. The money is better than ever, and touring traffic has increased as a result: a record 13,437 worldwide concerts were reported to Billboard Boxscore this year, up more than 25% from last year.

Some of that increase is attributed to more international representation and more diligent reporting overall, but the fact that more artists are playing more dates surely also plays into the equation.

More traffic is obviously good news for venues. "We're right on our concert budget," says Peter Luukko, president of Comcast-Spectacor Ventures and chairman of Global Spectrum, which operates such arenas as the Wachovia Center in Philadelphia.

"We didn't have some of the five- or six-night runs we've had in the past, but more acts came through," Luukko says. "And the ones that come through are selling well."

Others agree that next year could be another record-setter. "At this juncture, the 2004 season for shows is much stronger than last year," says Alex Hodges, executive VP for HOB Concerts. "We see January and February and March as being much stronger than a year ago, and the outdoor venues have more holds, more offers and more confirmations this early than we had a year ago."

Philadelphia is a good example of a market that will capitalize on winter bookings in early 2004. On the books already at the city's Wachovia complex are Bette Midler (Jan. 15), Linkin Park with POD (Jan. 20), Sarah Brightman (Jan. 21), Rod Stewart (Feb. 17), Barenaked Ladies (Feb. 18), Alan Jackson (Feb. 27) and Britney Spears (March 31).

This slate is pretty representative of what the rest of North America will see in the early going of 2004. "It's shaping up to be a great winter," says Comcast-Spectacor senior VP John Page, GM of the Wachovia Complex.

WORLD DOMINATION

The increase in touring traffic can in many ways be traced directly to CCE, still far and away the dominant global player in the touring industry. In 2003, CCE was involved at some level in nearly 60% of all dollars reported to Billboard Boxscore.

But that's down from a 65.6% share the previous year, and CCE's reported box-office gross was off by 5% despite the fact that the concert giant reported 155 more shows than it did in 2002.

While CCE's slight drop may not necessarily reflect competitor AEG Live's abrupt gain, the latter's jump up the promoter ladder in 2003 is nothing short of remarkable. AEG Live reported $341,858,998 in concert grosses this year, up a staggering 134% from '02. That's enough to move AEG Live to second among all promoters, passing HOB Concerts.

"All I can say is, 'Whew,"' says Randy Phillips, president/CEO of AEG Live, a subsidiary of sports and entertainment company Anschutz Entertainment Group. "We're in there fighting the good fight."

Reuters/Billboard