The old adage is that when the economy’s down, entertainment is up. Dave Shadoan, president of SR provider Sound Image, has been a firm believer in that throughout his career. But this year, even he wonders how well it will hold up.
“This is going to be a new one for all of us,” he says. “There has never been so much entertainment out there, and all of the musical artists are making the majority of their money from touring, not from record sales anymore. A concert has always been a good value for the consumer… but we’ll have to see this year if they’ll be buying as many tickets as they did last year. We’re going to see if we can have a recession-proof touring season.”
Gary Bongiovanni, editor of Pollstar, says he’s seen a slow start this year. “[Promoters] are getting more conservative about booking the big arenas this year,” he says. “Maybe it’s because everyone is waiting for the Led Zeppelin shoe to drop, but there’s a sense of caution, even pessimism out there.”
Do the Math
Some numbers support the sense of slowdown. Live Nation, the country’s biggest concert producer, reported a four-percent decline in revenues in the fourth quarter of 2007, largely due to the decline in profitable tours compared with the same period a year earlier, the company said. Bongiovanni says certain niches are doing well, like festivals and the jam band circuit. “Dave Matthews and Jack Johnson are still doing great,” he says. “They fit the mold that’s current right now: bands that don’t need records to tour against are selling tickets. The Police, Clapton, Pink Floyd. I wonder what’s going to happen when we run out of those acts — Dave Matthews can’t replace all of them.” (The disappearance of the classic rock artist from the touring scene will be grist for another column.)
The SR providers are generally sanguine about prospects this season. Ralph Mastrangelo, executive vice president of touring for Clair Brothers in Nashville, says the work didn’t slow down over the winter as it usually does. “There were lots of small projects around the holidays, but a lot of acts have stayed out longer, too,” he explains. “In fact, the market might be a bit saturated. There’s like five or six new festivals this year, like Mile High in Denver and the Rothbury Festival in Michigan. There’ll be competition for ticket sales dollars.” Sound Image had a similar experience: “I’d say we were busier this time this year than we were last year this time,” Shadoan says. “A lot of return business and new clients.”
Keep On Truckin’?
Still, both Mastrangelo and Shadoan sound the same theme when the discussion turns to fuel prices. “The fuel surges are immense this year,” says Mastrangelo. “With so much more riding on revenue from touring for the music business, the increases are going to be felt this year more widely throughout the entire industry.”
Bongiovanni expects that the mid-market artists will start to become more of a factor in touring this year. “It’s where the next round of headliners is going to come from,” he says. Ken Porter, owner of Spectrum Sound in Nashville, which is a hub for mid-market shows, agrees. “I expect to see more work for and from the regional acts,” he says. “As transportation costs keep going up, certain touring artists are not going to pay for a semi to haul a PA with them; they’ll rent regionally and limit their load to a trailer.”
Same Old, Same Old?
It’s not like we haven’t been though this before. We weathered a recession in 2000–02 and the bursting of the Internet bubble of 1999. But, as the inserts in your mutual fund monthly reports that none of us ever read say, past performance is no indicator of future earnings, which applies to both the economy and the music business. We’ve got a rare confluence of events that has the general economy receding along with the music industry, combined with more possibilities than ever for consumers to spend what disposable income they do have and the fact that it will cost them more to get someplace to spend those dollars. How many times does someone need to see Clapton or the Rolling Stones? We’re probably going to find out this year.
Polling SR providers to get a handle on how the touring season will play out is a little like calling up commercial hose manufacturers to get some sense of how many fires there are going to be in California this year. But sometimes the oblique avenues offer the most parsable insights.
Booking touring systems does provide a sense of how well the touring business itself thinks it’s going to do, and in an industry of self-fulfilling prophecies, that’s worth taking into account. So it looks like a slower start than usual, lots of choices, and more of them on a regional basis and packaged into stationary festivals. It sounds like 2005, which actually turned out well in the end, even though we had to wait till the end to find that out. Inevitably, we’ll have to do the same here, but if you want to place wagers, betting on happy endings usually only works in Hollywood.
Contact Dan at ddaley@fohonline.com.
