AMIR14 : Research - Industry Forecast ( 33 of 52 )

INDUSTRY RESEARCH : PROMOTERS

IS THE INDUSTRY EXPANDING? 

The MAJOR promoters “Live Nation” and “AEG” are certainly expanding. For them, business is always expanding vertically and horizontally in terms of business lines and contracting in terms of tickets pricing and sales. 

However, for the entire nation and for that matter the world, the economic hardships of a tough recession and a slow recovery had amounted to a decrease in both ticket sells and events of around 12-15 percent circa 2006-2010. By all accounts the industry has been bouncing back for the global conglomerates who own, operate or manage while booking for their own venues either nationally or internationally.  

A multi-tiered ticketing approach had been in place to deal with the almost 40% of unsold tickets in the industry during the downturn and has become the norm today, as well as ticket price reductions, and expanded sponsorship revenue streams for merchandising, new media and even recording activities or LIVE streaming to add greater value. 

Because promoters are competing with the large conglomerates they are finding themselves acting like music companies promoting not only the events but any un-signed undistributed record/cd for the artist on tour. There are also digital bundles with ticketing companies and websites, website-TV streaming that gets world wide attention, Traditional radio specials and TV (promotions), posters and handbills are important since some major record companies do not service regional areas anymore.  

There are many independent producers, labels, distributors and promoters now that can access the internet marketplace like MySpace, YouTube, iTunes and big box retailers like Wal-Mart.

Will this trend continue?    

The industry has steadily bounced back from the recession and as un-employment decreases and the economy stabilizes, tours and concerts have grown double digit internationaly as well as nationally. On the average fans will attend 3 large LIVE events because that experience is difficult to achieve otherwise however, there's is a trend to larger multi-day events at outdoor venues which are typically cheaper to rent for the promoter and can sell to larger crowds that are willing to sit in non-traditional seating arrangements. 

These ticket prices used to be lower but have increased in price from $150 to $300 and this year might jump to $400-500 hundred dollars for General admission. My concern is that if the fan is willing to make that investment it might be at the risk of not attending any other large event for the rest of the year.  

I am hoping that this might turn out to be a great cross marketing opportunity.  A "Black Friday" for entertainment which rather than just expanding the fan base might actually be a plate tectonic shift from indoor to outdoor vis-a-vis the festivals and our disruptive social media technology of the day can ride the wave. 

A great opportunity as far as this magazine and my blog are concerned and certainly something to capitalize upon by JOINING my YouTube channel and Tweets from WPLV24 or by SUBSCRIBING to my RSS feeds and blog at www.thewirelesscowboy.tv  

AMIR14 : Research - Promoter Demographics ( 32 of 52 )

INDUSTRY RESEARCH : PROMOTERS

WHERE ARE THEY MOST ACTIVE?

Of-course the bigger venues will always reside in popular metropolitan areas with higher population densities and education levels with more disposable incomes.  Costal states like California ( the 7th largest economy in the world and a population of 45 million )  New York, Massachusetts, New Jersey, Florida and Georgia have been mecas for the music industry for decades but even central states like Texas, Tennessee, Illinois and Michigan make themselves known for their large populations and cultural diversity. Among the most popular cities are Seattle, Portland, Los Angeles, Las Vegas, Dallas, Nashville, Chicago, Detroit, Boston, New York, Washington, Atlanta and Miami.        

Today's promoters know these demographics well and have been consolidating with mergers and acquisitions for more than a decade offering artists a One Stop shopping experience that provides both Venue and Promotion across the nation and even globally. For an artist or band the appeal of this approach is obvious and translates into the biggest acts dealing exclusively with these top tier.
But what if you are a mid-size venue / promoter in the business who can deliver quality promotions on your own or third party facilities? You can focus on niche, alternative markets through single promotions or through multi-city / multi-venue "block bookings" either on your own or with the larger promoters.        

If you are a small Local or Regional promoter the best way to produce and present an artist is to maximize every show by targeting the full potential of the market and the venue.  Your intent is to account for every seat, every ticket, every marketing opportunity and merchandising sale as to minimize costs for everyone including the artists. Increasing profitability can be achieved by focusing on Digital Marketing of both exclusive venues and the artists position in those markets. Developing a network of alliances with other agents, promoters, labels and marketers will help you maximize each opportunity to sell out a venues total capacity and develop your regional audience

The best approach to take is to Act locally but think Globally since there’s a gap between the artist who is being promoted through a national touring platform and the artist who is being secured solely for a single date in the local market. The promoters must adapt the national touring platform to a regional one and vise-versa. Offering multi-city and multi-venue to artists who aren’t on a national tour and promoting national up and coming artists through individual dates in their region.

This flexible approach allows the promoter to capture a string of artists and dates that can support and synergize each other creating unique cross marketing, sales and merchandising opportunities in any venue space. These venues have seen the bigger acts migrate to the ONE Stop shops and have had to open their doors with lower price points and more localized acts.

This can certainly be a source of sustainable incomes in the era of iTunes, Pandora and YouTube and has been best exemplified by the Summer Music festivals we discussed last year on my digital marketing  blog and this year starting March 1 at TheWirelessCowbot.tv and WPLV24.
 

AMIR14 : Research - Top Promoters ( 31 of 52 )

INDUSTRY RESEARCH : PROMOTERS

WHICH PROMOTERS GENERATE THE MOST REVENUE?

The biggest owner/operator promoters are Live Nation and AEG. Together they own or operate 240 venues and account for almost 70 million tickets sold yearly around the world with upwards of 8 Billion usd dollars in revenue. These conglomerates have a huge advantage over smaller venue renting promoters and have begun to branch out into A&R representation, music label activities, ticketing and of-course as operators of some arenas even merchandising, restaurants and parking.

Their large capital access allow them to run outdoor music festivals like Coachella and StageCoach in the usa and since they already had team sports and sponsorship divisions it was natural to entertain the masses with dance festivals as well.  They feel some competition from independent promoters like Creative Artists Agency and WME at the local and regional level in North America but globally they stand alone atop.

TOP INTERNATIONAL PROMOTERS

LIVE NATION

142 venues, 2K artists, 22K events, 69 Music festivals

52 Million tickets sold
      6 Billion in sales from 3 divisions

60% USA 38% EU 2% Tickets
   Artist Nation manages 200 Artists including U2 and Madonna

AEG

98 venues, 10K events

12 Million tickets sold
      2 Billion is sales from 3 divisions

50% venues, 25% Teams, 25% Tickets

CIRQUE DU SOLEIL

140 venues, 4K events

6 Million tickets sold
      1.4 Billion is sales from 2 divisions

90% venues, 10% Merchandising

TOP NORTH AMERICAN PROMOTERS

  

LIVE NATION

U2, Madonna, Lady Gaga, Nickelback, Jewel, JayZ, Drake, Shakira
   Aerosmith, Christina Aguilera, Jennifer Hudson, Kenny Chesney

AEG
Taylor Swift, Rolling Stones, The Who
   
CREATIVE ARTISTS

Bon Jovi, Eagles, Justin Bieber, One Direction, Kanye West , Maroon5, John Meyer, New Kids, Carrie  Underwood, Kid Rock, Tim McGraw, Jeff Durham, Shannai Twain, Keith Urban, Chicago, Journey, Kiss, Pitbull, Willie Nelson

WME

JZ/JT, Luke Bryan, Bruno Mars, Miranda Lambert , Rihanna, Blake Shelton, Depeche Mode, VANS Tour,  Alicia  Keyes 

research conducted using data reported by both Billboard magazine and PollStar at www.billboard.com www.pollstar.com

AMIR14 : Research - Promoter Pay ( W30 of 52 )

INDUSTRY RESEARCH : PROMOTERS

HOW DOES A PROMOTER GET PAYED? 

There are many types of promoters and each with different experience levels and revenue streams. From bar and club promoters at the ground level for local artists and events, all the way up to event management at the highest pop star and international venues. We focused on the Outdoor festival circuit last year but only because it was the most entertaining manner we could find to stay motivated through all of the research and analysis but a promoters job is universal across industries and products or services.

 

BAR/CLUB promoters can make $100, $500 and  even more than $1,500 per night while helping small venues fill in their off nights or pack their weekends and holidays. They need not hire staff like DJs since the establishments already have those in place.The promoter does need to have a game plan to create buzz and drive the crowds to the establishment.  These promoters can be payed on a per head count basis anywhere between $10 in big city market and $100 usd for "model type" patrons.  If they areconsistant they can demand flat fees from $100-800 per night.  

When the promoter is able to guarantee glamour customers , rich and famous or VIP big spenders they can also request a % of bar sales or bottle sales anywhere between 10-30%. The venue owner will often place a minimum that must be sold in order for commission to be payed and if it is not met then the promoter must pay the difference. The bar/bottle sales option requires a lot of experience and confidence from the promoter itself so be cautious. If you commit to 5 days a week of promotions or 4 weekends a month you can easily bring in $50,000 a year ( 25 per hr )

PARTY promoters mature into existence from the previous stage. They will need to hire DJs, entertainers, support staff and even manage the venue rentals and catering  in some cases so start-up  capital is needed. Risk in these types of promotions is high with insurance for  the venue becoming a must in certain genres like hip-hop ($2500 per night ) but certainly "better safe sorry". 

Return on Investment can range between 1K and 10K per party but this requires careful market research, advertising and marketing with a sound understanding of business planning that insures success. It is not a stretch to expect to run 25-50 events per year and expect a yearly total of $25,000-$500,000 in gross if you are committed to the job and not the lifestyle. That's $12.50 to $250 per hour in shift worker lingo.

EVENT promoters can make 10x or more but require long planning timelines, carry high risks and demand large amounts of working capital. The typical payouts are tied to revenue splits of 80/20, 70/30 and 50/50 for regional and national events.  This is often taken from ticket sales and door sales but a seasoned promoter will include merchandising and cross marketing revenue streams as well.  

Media buying costs are much higher as this type of event requires regional media buys as discussed on page 10-18 and media schedules that can have daily frequencies, regional reach and month long runs of both traditional and digital channels. These events are high profile so there is very little room for mistakes and the competition is high from large A&R organizations as well as the record companies and publishers that are offering 360 deals to top artists in order to capture this profitable revenue stream.  

AMIR14 : Research - The Promoter ( W29 of 52 )

INDUSTRY RESEARCH : PROMOTERS

WHAT DOES A PROMOTER DO?

A successful promoter takes control of every aspect in a tour or show. From research and planning to hiring support staff, supervising the production schedule and settling compensation.

RESEARCH
Geographic, demographic and  psychographic research for regional population densities, per capita incomes, education & cultural diversities proximity to universities plus venue rental fees associated with stage size, attendance capacities and supporting staff required and amenities.

PLANINING

The promoter needs to start 12-16 weeks from the event.

 1) Use existing contacts and previous events in order to spread word of mouth
 2) Use Advertising and Marketing tools to promote the show, ( Print, Radio,TV, Cable)
 3) Direct Mail should be sent out to allow for delivery using bulk USPS rates
 4) Set-up ticket sales outlets, online vendors and printed tickets or ticket-box
 5) Printing of tickets can be Co-OPed with outlet store name and coupons as advertising


8-12 weeks from the event
 6) Distribute, log and affidavit numbered tickets for vendor sales/receipt tracking
 7) Print and distribute advertising collateral to build buzz using local media community


4-8 weeks from the event 8) Hire support crew for Load-in, TicketSales, Ushers, LoadOut on contract or per diems
 9) Send out FREE PR to Local Radio, TV, News to maximize marketing budgets
 10) Your Direct Mail should have arrived so follow with tele-marketing, tally results and fulfill
 11) Start Radio advertising 30-60 sec spots, 4x a day during the week for at least 1 month


2-3 weeks from the event
 12) Set-up Interviews with artist(s) for industry news and media press release
 13) Monitor ticket sales every day and re-distribute more if necessary
 14) Check with facilities manager for insurance, lights, sound checks and security


Week of the show
 15) Set-up ticket sales, receipts and tickets along with money collections before the show
 16) Confirm arrival, sound check, dressing rooms and set-list with artist manager
 17) Set-up production schedule and share with all staff involved to commit

IMPLEMENTATION
* Day of Show Logistics
* Meet building manager to open and inspect venue 8hrs prior to showtime.
* Meet support staff with production schedule and duties 6hrs prior to showtime.
* Meet with supervisors to do a walk through of the building 4hrs prior to showtime.
* Meet with ticket booth manager for accounting for door sales, receipts and holds.
* Meet with ushers and security 2hrs prior to showtime.
* Meet with the band and manager to arrange settlement times.
* Supervise showtime and get cash and tickets from ticket booth manager.
* When show-time is over settle out w/crew & band, supervise venue load-outs & close.