To make sure that the highest quality music still reaches the public ear via live concerts, we need to keep our finger on the ticket prices and keep asking why the prices are going up so fast and so regularly.
The main reasons for increasing ticket prices for concerts are dynamic pricing, and the monopoly of big entertainment companies which is driven by stockholders, market power and money.
In this article, we’ll have an in-depth look at what these reasons are for the raise in ticket prices and what we could do to stabilise the prices so that we can keep seeing our favourite artists performing live in our cities.
Comparing the Prices Between Then and Now
During the ’70s, a ticket to see The Rolling Stones live in concert cost about 2 pounds whereas today, 50 years later, you would pay anything between 200-600 Euros to see the Stones in concert.
In the meantime, much has happened. Not only with the Stones but in the complete music industry.
Concerts are becoming more of a luxury if they take place. Some artists would even describe the live music industry as wounded.
With 2 years of pandemic behind us, we now have an era where people want to get out and celebrate.
The CEO of the biggest event firm, Live Nation, says that there’s a record turnover in the live music industry. In comparison to 2019, they have even achieved a 60% increase during the summer of 2022.
On the contrary, many events, concerts and tours are being cancelled, because of rising ticket prices and unsold tickets. This creates a massive unsettling feeling for our live performers, to such an extent that many artists are experiencing burnout and cancelling their tours.
But how did it happen that they still achieved a financial increase?
What is Dynamic Pricing?
Coldplay, Blink-182, and Bruce Springsteen reach absolutely sharp high prices for their tickets, some even selling for up to 5000$.
Our generation is already finding it challenging to buy property, and now we need to struggle to take out credit just to see Blink-182 live in concert.
The reason for this is Dynamic Pricing
Dynamic Pricing is an algorithm that measures the popularity of an artist. When many people book tickets for a concert, the ticket price is automatically adjusted according to the demand for tickets for the concert.
And all of a sudden, the lower-middle economic class is almost excluded from attending concerts because it’s mainly only affordable by the middle-upper and upper economic classes.
The dynamic pricing model has been invented by Live Nation and their daughter company Ticket Master. Through real-time analysis of the demand for tickets, a maximum cost for tickets are being calculated. Then, according to the CEO, Micheal Repino, the tickets are on sale for the price that fans are willing to pay.
He states that their jobs are to offer their clients the best price for their market value. He also claims that dynamic pricing and demand analysis, like with flight and hotel bookings, is a new model for our industry that we constantly try to optimise and monetise most efficiently.
He continues: “An important aspect is how much money can you as a team or artist ask for the front row seats? You won’t simply give them away, but you will try to monetise them as well as you can.”
The Big Companies in the Industry
Let’s first have a look at what the live music market looks like today.
According to Berthold Seliger, who is a German concert agent with 34 years of experience, the accent of the music business has shifted from “music” to “business”.
He says that there are 3 main concert organisers that are mainly controlled by their shareholders.
- Live Nation – Who also owns the biggest ticketing firm in the world called Ticket Master
- Eventim – Who has the ticketing monopoly in Germany
- AEG – Who organised the last Stones tour through Europe
Who’s at Fault for the High Prices?
The great grandfather of dynamic pricing goes back a few years when people bought extra tickets for popular concerts, just to sell these tickets on the black market for much higher prices just because the tickets were so much in demand.
So the responsible parties recognised this opportunity and realised that they are leaving money on the table if they don’t take advantage of this opportunity. Therefore they decided that their ticket prices could still rise according to the algorithm.
They do this by holding many of the tickets back until the show is 90% sold out. Then they release the rest of the tickets as a type of “Platinum Tickets” where they place a massive increase in ticket price.
These tickets are sold at absolutely absurd prices to the public, and the people keep on paying for them.
This post was posted by De Wet from startingmyband.com on 30.04.2023. The post was taken from my website if this blog post is seen anywhere else.
Does the Artist have an Influence?
Besides the above-mentioned companies, the one party that no one talks about and never gets mentioned is the artists and bands themself.
Since the artists are signed by contract agreement, they are well aware of these prices and have the last word on the ticket prices before they sign and agree to the tours or concerts (or at least for the really big artists and bands).
The artist definitely has the power in their hands to make the prices of their tickets affordable, but most of them do not do this since they are also after the money.
As soon as the superstars don’t step in to make the tickets more affordable, the ticket prices would keep on rising until the absolute maximum market price is reached.
I recently attended a concert in a massive Olympic hall in Munich by an amazing German talent called Johannes Oerding. If you are interested in seeing his songlist and a cool interview with a fan, you can check it out here.
What Happens to the Smaller Venues?
It is already a huge luxury that we can still have tours and concerts, but we seriously need to take better care of our smaller venues.
The performers that sell really well and that fill the venues are important to them to keep their doors open. With this money, they get to offer opportunities to different genres, new artists, and experimental performers so that they can also have a chance to grow.
This is the base for these artists to become successful in the future and is currently in danger since there won’t be money left to pay for these types of opportunities.
If it continues to be like this, it will become really hard for newcomer artists to get a foot in the door in the music industry.
The smaller venues are often worried that the people will no longer have money to support them because they are forced to pay too much for tickets to see the mega-stars. That could lead to culture only belonging to those that can afford it and not to all of us as it should.
The smaller venues are the stepping stone for upcoming artists. They offer opportunities to young or inexperienced artists and a close-up experience to the public. The fans you make at the smaller venues become the base of your following.
What Could We As Fans Do About This?
Firstly, it’s not our fault as fans that we are sitting with this. We also have our own struggles in life and we are struggling to keep our heads above water.
Fans are motivated to use the 100-200€ they pay for mega-stars tickets, to use this money and attend 2-3 smaller concerts that you could also enjoy.
The personal and emotional connection that one feels during these intimate concerts is often much more valuable than the Max-Arena’s and Stadia concerts.
If we balance the numbers and offer our support to the up comers as often as we can, we as fans can reverse the algorithm of dynamic pricing so that we can keep the prices and artists humble and affordable.
It’s not always about money, but about culture and community.
I hope this article answered your questions!
If you have time, some of my other articles might interest you as well: