By Ray Waddell
Pretty much any way you crunch the numbers, the concert industry kicked serious butt in 2006. Both dollars and attendance reported to Billboard Boxscore this year were at all-time highs.
Once the unruly stepchild of the music industry at large, touring now wields the monetary leverage for the majority of acts. "It's obviously a good time to be in live music, and a strange time to be in recorded music," observes Randy Phillips, CEO of AEG Live.
It doesn't hurt when some of the biggest tours in history were on the road, but there is no denying that this has been a banner year for the touring industry from top to bottom.
Such improvement represents a stark turnaround from a business that was down in 2004 and virtually flat in 2005. This year, it's all about the spike. For North America, more than $2.8 billion was reported in box office to Billboard Boxscore, up a stunning 35% from last year's total of just over $2 billion.
It's worth noting that the industry cracked the $2 billion mark for the first time in 2003; now one promoter, Live Nation, tops $2 billion in reported grosses. The increase can be largely attributed to both higher ticket prices and more diligent reporting by promoters, venues and events.
With big-ticket tours like Madonna, the Rolling Stones, Barbra Streisand and U2 working in 2006, some increase in dollars was expected. But what may surprise many is, even with these higher prices, attendance managed a 14% increase at more than 52 million. This follows years of declining attendance, including a 3.8% decrease last year.
Worldwide numbers also are up, with a total gross of $3.4 billion up 30% from 2005, and a total attendance of more than 61 million up 13%. These double-digit increases in dollars and attendance were accomplished with only a modest increase in touring activity, with the number of shows reported up only 3.4%.
As you delve deeper into the numbers, the news is still good. Per show numbers, which many consider a more telling barometer of the industry's overall health, are exceedingly strong. The average gross per show in North America is $190,648, up 31% from 2005.
And, better yet, the average attendance per show, basically the number of people attending concerts night in and night out, is 3,499, up 10.3%.
Dollars may still be outpacing attendance, but this does represent, after all, an increase in the number of people going to concerts. And an increase in the number of concerts means more consumers paying for popcorn, beer, parking, T-shirts, and the various service charges assessed on tickets.
If there is room for improvement, though, it is in further increasing per-show attendance, which had steadily declined until this year. A decade ago, the average per-show attendance was more than 6,000 per show. But the total number of shows reported in those days was less than half the nearly 15,000 reported for North America this year, so the market is far more saturated with tours today.
And while the industry saw some of its highest ticket prices ever, even the most expensive shows were usually scaled to a degree that offered a broad price range. The market showed relatively little price resistance, as even big-ticket tours like the Stones, Madonna and Streisand sold most all available tickets.
Along with big arena tours and a steady amphitheater business, the industry is also managing the difficult task of breaking new acts. Along with 20-year veterans that typically dominate the chart, newer acts like Nickelback, Rascal Flatts, RBD, Coldplay, Brad Paisley, Tool, and Black Eyed Peas enjoyed solid years.
Another trend is the continued and growing success of large, multi-act festivals in North America, largely patterned after similar events that have thrived for years in Europe. Events like Bonnaroo, Lollapalooza, Coachella and the Austin City Limits Music Festival attracted huge crowds this year. Expect new events to come on line in the coming year, with Live Nation leading the charge.
In its first year as an independent, free-standing company, Live Nation was by a wide margin the largest concert promoter in the world, reporting grosses of nearly $2.3 billion from involvement in 9,367 shows that sold 38.2 million tickets worldwide. The company also had a hand in producing seven of the top 10 tours for the year, and more than half of the top 25.
The privately-held AEG Live is a distant second to Live Nation, reporting $543 million from 1,347 shows that drew 8.3 million people. Big tours by AEG Live in 2006 included Bon Jovi, Kenny Chesney, the Dixie Chicks and American Idols Live, along with the Coachella Music Festival and strong regional business.
Running very close to AEG Live was Concert Promotions International (CPI), a company partly owned by Live Nation. Remarkably, the Michael Cohl-helmed CPI grossed more than $533 million primarily from just three tours: the
Rolling Stones, Barbra Streisand, and the Who.
Certainly the boom numbers for 2006 are driven by the mega tours; the top 10 tours alone generated $1.2 billion in gross dollars. So, with the big tours -- and their big promoters 00 driving the business, is their success trickling down to smaller markets and independent promoters?
"I hope it is," says AEG Live's Phillips. "I think it would be a healthier business if there were more independents out there. They offer a different perspective, it kind of harkens to the way business was when all of these promoters weren't consolidated.
Even so, several independent promoters improved their numbers in 2006, including Chicago's Jam Productions ($51.3 million), Outback Concerts ($37.8 million), Another Planet Entertainment ($30.5 million), Fantasma Productions ($30 million) and I.M.P. ($21.6 million).
As has been the case for more than a decade, 2006 is top-heavy with veteran acts. The majority of the top tours, with the notable exception of country music tours, were by acts that were past their record-selling prime.
"There's a little bit of a problem to that for the future," says Phillips of the veteran dynamic. "Where did our stars come from? They came from recorded music, from breaking on radio. We've got to find new ways to break talent or else we're going to run out of inventory."
This article is excerpted from Billboard's annual Year In Music double issue dated Dec. 23, 2006. The full original text appears in the magazine and is available online to subscribers at Billboard.biz beginning Dec. 15.
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