2002 Year End Business Analysis
Pollstar 1/03
Record Revenues
Major concert ticket sales in North America hit record levels for the fourth year in a row. Pollstar estimates the industry generated $2.1 billion in 2002 as compared to $1.75 billion the previous year.
Unlike 2001 when unit sales trended downward, the approximately 20 percent jump in gross sales is attributable to both rising ticket prices and increasing sales. The industry's increase in gross revenues is in line with our Mid-Year analysis, which showed sales jumping 17 percent over the same period a year ago.
Paul McCartney's $103.3 million outing in North America easily topped this year's list and was good enough to be the fourth biggest of all time.
The Rolling Stones are still all-time champs thanks to their $121.2 million tour in 1994, but this past year was the first time the Stones worked in America and did not have the No. 1 tour. Band reps decided against allowing grosses to be reported, so Pollstar had to piece together information from multiple sources to determine estimates for every date, a number of which were not sold out. The final figure for the band was $87.9 million.
Ticket Sales Jump
The Top 100 Tours alone accounted for about $1.63 billion of the industry's $2.1 billion total. That equates to about 78 percent of major concert revenues, which provides plenty of fodder for those who adhere to the 80/20 theory of business.
The top acts sold a total of 35.1 million tickets as compared to 34.4 million last year. That's still well below 2000's 37.1 million tickets. The Top 100 acts also worked much harder in 2002 by stepping on stage a combined 5,113 times, as compared to last year's 4,437 shows or even Y2K's total of 4,720.
Among touring artists, the industry's true workhorse was John Mayer, who did 188 shows in a breakthrough year.
The Dave Matthews Band was the most popular act in terms of ticket sales, putting more than 1.5 million fans through the turnstiles this past year – nearly as many fans as the McCartney and Stones tours combined. Cher, who did 1.1 million tickets, was the only other act to sell into the seven-figure region.
Tickets Continue To Get More Expensive
Ticket prices continued their upward spiral with the Top 100 Tours averaging $46.56, a 6 percent increase of about $2.70 per ticket over last year's $43.86. For comparative purposes,Y2K's average was $40.74. A look back five years to 1997 reveals the average ticket was $29.81.
One of the consequences of such a rapid price escalation has been a further distancing of concerts as an inexpensive form of entertainment immune to economic downturns.
Some acts understood what was happening in the economy and priced themselves accordingly.
Kenny Chesney did the year's top country tour by playing to nearly 800,000 fans at an average price of $26.73, the lowest among any act in the Top 25. Incubus had the lowest price among the Top 50 acts with an average of $23.83.
Paul McCartney had the highest ticket price among contemporary music acts with an average of $129.92. The only others to crack into triple digits were the Stones at $119.20 and the Elton John / Billy Joel pairing, which averaged $107.88.
Top 200 Grosses
Paul McCartney placed all 43 cities on his North American tour among the Top 200 grosses. Bruce Springsteen & The E Street Band did 17 monster dates, Dave Matthews Band had 16, Eagles accounted for 15, Elton John / Billy Joel did 14 and The Who played 12.
The Rolling Stones had only one show reported with solid figures that was eligible for the Top 200. Based on our estimates, the band would have had 27 of the Top 200 dates if specific information had been available.
The Top 200 grosses accounted for about $408 million in revenues as compared to $510 million last year. If the Stones had been included, the figure would have been $461 million.
Product For The Future
It will be difficult to blame it on a lack of marquee product if 2003 turns out to not be a good year for the concert business.
Top acts from 2002 such as Bruce, Cher, Elton/Billy, and the Stones already have dates on sale for the new year. Phish returns in earnest and jam band fans will also have The Other Ones in '03.
The Eagles plan to do a large tour and it also looks like a reformed Fleetwood Mac and Led Zeppelin will do big dollar outings. Pearl Jam, Red Hot Chili Peppers, and R.E.M. already have overseas dates on the books and are expected to work in North America. Pink Floyd, which hasn't worked since 1994, is increasingly looking like it might never re-form, but Roger Waters is expected to hit the U.S. this year.
Yield Management
Record revenues. Ticket sales jump. Major names on tour. One might expect this would result in broad smiles from promoters and agents. It did not, and it would be difficult to find an industry insider who could pronounce overall business as healthy.
Too many acts charging too high of a guarantee resulting in too high of a ticket price added up to oceans of empty seats on too many tours, even if their individual gross revenues were higher than years past.
Conventional wisdom has always been that it is better to sell out and turn people away than to overreach and play a venue that can't be filled. It used to be much easier to achieve that goal when ticket prices only varied by a few dollars from one act to the next. But that gap has widened significantly in recent years. Is Peter Gabriel worth $76 and Bob Dylan only $43? Is red hot Kenny Chesney only worth $26 while George Strait wants $59?
As an industry, we do an absolutely terrible job of yield management and it will require some fundamental changes in pricing structures to stop such a huge waste of resources.
If you think of a tour like a tanker truck filled with milk, picture pulling into town and passing out 60 percent of your load to thirsty locals and then dumping 40 percent into the sewer before moving on to the next city. Someday, we'll have to figure that one out.
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