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There are quiet murmurings in the music community and in the performing arts world at large. It’s a palpable fear.
A crisis is looming on the horizon and many industry experts believe it’s going to be even worse than the pandemic shutdowns.
Audiences for live music and other sales are falling and they’re falling fast.
This is caused by two things. First, ticket prices in America are victims of rampant inflation.
In fact, while ordinary inflation is at around 8.5%, it’s a bit steeper for music fans.
In 1970, Elton John took the stage to a sell out crowd in Syracuse where the highest priced tickets were just $5.50, the cheapest were $3.50.
In 1992, he went back to the city and his tickets were $26.50 each.
In 2001, he teamed up with Billy Joel and people paid between $45 and $175 each to enjoy them in Syracuse, at the time, it was the most expensive gig in the city’s history.
In 2022, he returned to the same venue and his lowest priced seats were $181 each! The most expensive seats were $300 and if you had to venture into the black market a front-row floor seat could have set you back a jaw dropping $10,000!
And the second issue is that streaming services are everywhere and are either free or exceedingly low cost.
This means that fans are left with the choice of listening to music at home for next to nothing or going out and paying far more than many of them can afford to listen to music in real life.
This is not sustainable. Sure, people might find $300 to watch Elton John’s final tour and some might even be moved to pay $10,000 to do so, but they won’t be doing that 3-4 times a month for a wider range of artists, because they simply don’t have the cash to do so.
This can already be seen in declining ticket sales. Though as the New York Times notes some of this may also be due to public wariness after Covid.
This is something that as we noted last week is hitting festival tickets sales especially hard.
Streaming services may be great for music lovers, but they’re not so great for an artist. Unless, perhaps, the artist is an AI artist and needs no payment.
Spotify, for example, pays around 4 cents per 10 streams! That means an artist needs to be streamed 5000 times to earn $20, roughly the price of a single CD in days gone by.
However, the biggest issue is that skyrocketing ticket prices are an active deterrent to new fans.
While you may be willing to pay $300 to see an artist you’ve seen before and know you’ll enjoy, you’re going to be much more reluctant to take a chance on a new artist. $300 is, after all, a big sum to most Americans.
In turn, this impacts the way that art and music is packaged for consumption.
The more money someone spends on a ticket, the higher their expectations for the event, and the less likely it is that those expectations will be met, and this will lead to lower and lower attendance.
Some musicians and musical establishments can see where the path the industry is following is leading to and have decided to break out of the current mold and experiment with new ideas.
The Chicago Sinfonietta was the first to offer a “pay what you can” approach to ticketing. They noted that removing “socioeconomic barriers” to music meant that they could enjoy larger audiences where people could, finally, afford to take their families with them to enjoy shows.
Then, the Lincoln Center, experimented with this during their Mostly Mozart Festival Orchestra’s most recent season and went with a “pay what you can” model too.
The results were pretty good too. They sold nearly 91% of all seats. While the suggested ticket price was $35, the average actually paid was $19. However, 63% of those in attendance were first time concert goers!
Of course, if a “pay what you want” model isn’t the future, there is another clever model for pricing that might be: Dynamic pricing. That is the ticket prices of seats vary based on demand. In this instance, the price fluctuates based on the seating available and the demand for it.
The only downside to this model is that it tends to see a sharp rise in ticket prices as you get closer to the performance. It could be argued that this might discourage newbies who are more likely to buy tickets at the last minute.
Finally, there are other creative methods of adjusting ticket pricing to increase sales including the good old fashioned policy of simply lowering prices.
And both venues and artists, particularly those for whom ticket sales make up smaller proportions of revenue, may need to consider discounting if all else fails.
Something has to be done. If the current trend continues everyone will be stuck at home listening to Spotify and only seeing a touring artist once a year or so.
However, we’re not saying that the only way forward is pay what you want, dynamic pricing or discounting, what we’re saying is the industry needs to examine the current model and make creative changes and they need to do it now if the emerging artist is to succeed in the longer term.