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Report: £5 is ‘optimum’ price point for virtual shows

A ticket that costs £5 (€5.55) for individual adults, or £10 (€11.10) for families with children, is the optimum average price point for virtual events, new analysis reveals.

For Vivid Interface’s Meeting the Online Opportunity, the UK market research firm asked 1,019 people who had visited at least two visitor attractions in the 18 months prior to lockdown in March 2020 how much they would pay to “watch a [virtual] play, opera, ballet performance or live band gig, or do a class, and so on”.

For “independent adults”, the price point where both revenue and viewership are at their highest is, on average, £5, according to the report. For families with children under 16, revenue is highest at £10, while the biggest viewership is achieved at £5.

The survey also reveals differences in willingness to spend based on age group – for 18–25s and 36–54s the optimum price point is £10, while for 26–35s and over-55s it’s £5 – and gender, with men prepared to pay more for their online experiences than women.

“The right online offer can provide a rapid revenue recovery”

Vivid Interface’s MD, Geoff Dixon, comments: “Nothing beats the live events arena. It’s where we work – and my social life – but organisers have to at least explore the possibility of online augmentation of their offer in pandemic times.

“I believe that the right online offer can provide a rapid revenue recovery without harming the long-term viability of ‘live’. In fact, an online presence can reach new geographies and bring new customers to a brand, attracting people who may in time walk through a physical door rather than a paywall.”

According to Vivid’s research, the Royal Opera House, by charging £4.99 for its first post-lockdown virtual shows, “may not be optimising revenue”; however, Laura Marling’s groundbreaking Union Chapel concert, which attracted an online audience of 6,500 with a ticket price of £12.50 (€13.90), “may be optimising revenue at this price point”.

“Research will help to set out a plan and an understanding of the price-to-demand relationships that are key to successful brand building,” adds Dixon.

 


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Rapid Lowlands sell-out despite line-up challenges

The Netherlands’ Lowlands festival sold out in the fastest time in years for its 2019 edition and demand for tickets remains high as the event fast approaches.

“Everything is on track,” Eric van Eerdenburg, festival director of A Campingflight to Lowlands Paradise – or Lowlands for short – tells IQ, ahead of the event’s 27th edition which kicks off on Friday 16 August.

Ticket sales are “back to where they were before”, states van Eerdenburg, referencing the fall in sales the festival experienced in 2015. “It was just one of those temporary shake-ups.”

After selling all tickets for the 60,000-capacity festival six months before opening, van Eerdenburg says a further 8,000 fans are still trying to get their hands on more via fan-to-fan resale platform TicketSwap.

304 tickets from unused sponsor blocks released to the public on 9 August have also sold out.

The price of Lowlands tickets went up by €10 this year to €210, with glamping options ranging from €72.5 to €660 on top of the festival ticket. The rise is caused by the national VAT rise for cultural event admission and a “steep” increase in artist fees, according to van Eerdenburg.

“We’re very lucky that glamping is really booming, so we can keep the tickets at the cheaper end more affordable”

Ticket prices are rising “too fast” says the Lowlands boss, adding that “we’re very lucky that glamping is really booming here, so we can differentiate the prices and keep the tickets at the cheaper end more affordable.”

However, it has not all been plain sailing for this year’s Lowlands. Speaking to IQ ahead of this year’s festival season, van Eerdenburg described the process of agreeing on a line-up poster as “mission impossible”.

The tragic passing of Prodigy frontman Keith Flint left Lowlands with an empty headline slot which “we couldn’t fill with an equally strong band”. With no international acts of a similar standard available, Lowlands elected for local band De Staat as a replacement.

Fast-growing among Dutch fans, the Lowlands appearance will be De Staat’s first headline show in Holland at a festival of this size. Although reactions to the replacement have been “mixed” and the act is “not as exclusive” as desired – De Staat have a packed Dutch festival schedule – van Eerdenburg is optimistic, saying “we will make it look like a headline show”.

Uncertainty lies around another Lowlands headliner, ASAP Rocky, who was recently detained on assault charges in Sweden.

“ASAP Rocky has now been released but we don’t know if he will be able to perform,” explains van Eerdenburg, saying the rapper’s agency has asked the festival to hold off on replacements for now. The verdict of the trial is announced on Wednesday 14 August, five days before the rapper’s Sunday evening Lowlands performance.

“We couldn’t fill [the Prodigy slot] with an equally strong band”

Elsewhere on the line-up, van Eerdenburg states there is a high level of excitement around Billie Eilish, who has “grown into a headliner in her own right”, since being booked for an early afternoon slot. Eilish has only played once before in Holland, in front of a 2,500-capacity crowd, so “the audience will be very happy to see her.”

Other acts the Lowlands boss is looking forward to include psychedelic rockers Tame Impala, fast-growing Irish rock band Fontaines DC and rapper Anderson Paak.

New for this year, Lowlands is partnering with payment communication specialist CM.com to trial an in-app payment collection service. The alternative to the oft-used RFID cashless system will run on one bar in the festival site, at the food and drinks outlets in the glamping area and in the press/guest area, with the plan to implement festival-wide next year.

Lowlands 2019 takes place from 16 to 18 August in Biddinghuizen, the Netherlands.

 


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Ticket prices rise in the Netherlands following VAT increase

Dutch concertgoers will spend more on their event tickets this year, as the country’s reduced VAT rate has risen from six to nine percent. The increase applies to many goods and services, including “admission to cultural events”.

In effect from January 1 2019, the new scheme will see average ticket prices rise by 3%, from €54 to €55.52, reports Entertainment Business.

Following the announcement last year, several Dutch venues advertised early-bird tickets for the last weeks of December, as those who bought tickets in 2018 for events occurring the following year could benefit from the previously lower VAT rates.

The tax increase goes against the grain, as several other European countries have celebrated a cut in concert VAT in recent years.

“We always try to keep ticket prices as healthy as possible, but a certain increase in costs for the customer is unfortunately unavoidable”

In 2017, cultural-sector VAT in Spain saw a reduction of over 50%, in a decision lauded by live music industry officials. The Portuguese live music industry welcomed a similar move some months later and, most recently, concert professionals in Italy benefitted from a reduced VAT rate.

However, major Dutch live music industry figures seem unconcerned by the increase and expect no detriment to sales or to the wider industry.

“Except for a single event, we have not had to raise our prices,” says Mojo Concerts CEO Ruben Brouwer (pictured).

“We always try to keep ticket prices as healthy as possible, but a certain increase in costs for the customer, whether due to increased artist fees, staff costs or drinks prices, is unfortunately unavoidable.”

Following an excellent start to the year in terms of January ticket sales, Eventim Nederland’s managing director Henk Schuit is similarly positive: “The 3% increase will have little or no impact on ticket sales. The favourable economic climate has much more influence on sales at the moment.”

 


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French government seeks to charge festivals for police presence

A controversial new memo has angered festival organisers in France, as it seeks to force festivals to reimburse the French government for any law enforcement needed at events. Under the new proposals, pushed by interior minister Gerard Collomb, festivals would be charged for any law enforcement called in for anything not related to terrorism.

The idea has largely been met with scorn throughout the industry, with organisers saying the proposal would not be financially viable without huge increases in ticket prices to cover the costs. The situation was highlighted by organisers behind France’s Eurockéennes. The new proposals would see the festival’s security bill rise from €30,000 to €254,000, a near 800% increase.

According to the proposal, festivals will not have to pay for police in the instance of a terror-related incident, however anything unrelated to terror will be chargeable. The problem, highlighted by media and organisers alike, is that the distinction between terror and non-terror related incidents is becoming increasingly blurry.

“The worst thing is that the police are there to ensure the safety of citizens, who already finance these operations by their taxes. “

France officially ended its state of emergency, declared after a string of deadly terrorist attacks across 2015 and 2016, last year. After the events at Paris’ Bataclan in 2015, the French government set up an emergency fund to cover the costs of heightened security around the country. This fund will be removed next year, leaving festivals, or rather festivalgoers, to foot the bill.

Organisers say this charge would mean fans paying twice for police protection. Yann Bramouillé, organiser of Couvre-Feu festival in western France, explains: “The worst thing is that the police are there to ensure the safety of citizens, who already finance these operations by their taxes.

“The increase in ticket prices, which is essential for our survival, would make them pay for this service a second time.”

Since the Charlie Hebdo attack in 2015, event security has drastically risen in cost, but payouts from the emergency fund have slowly decreased. These latest proposals have yet to be accepted or confirmed, causing organisers considerable distress. For now, festival organisers can only wait to see what decision will be made.

 


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What price fandom? The psychology of ticket pricing

You’re an artist with fans, who naturally want to see you perform. But when your tickets go on sale with an option to purchase a premium ticket involving a more personal experience, how do you price that without alienating those fans who can only afford standard tickets?

Genuine fans are, by nature, PASSIONATE. Feeling emotional attachment to an artist is interwoven with their whole life experience. And they deserve artists who consider what the changing landscape of price and value means to them.

Today, live events offer customers many extra layers of experience: VIP lounges, meet and greets, exclusive merchandise, premium seats, etc. Some customers are willing to pay extra for the best locations, and/or for an enhanced experience. Sometimes older and often more affluent, many customers are willing to ‘buy back’ their valuable time and avoid queues. But they want to feel great about it – not like they’ve been mugged.

I recently saw this price/value balancing act play out on social media. An artist who’s been around for four decades announced a 2018 UK tour. I’m in the online fan group, who were quick to post the announcement, days before standard on-sale details were released, when the only prices known were those at the very top end. On offer was the ‘meet and greet’ package containing exclusive merch, guaranteed front-row seating and the chance to meet the act and have a professional picture taken with them. The group members were in uproar; most understood the appeal of the meet and greet package but many scoffed at anyone willing to pay.

What really stoked the collective fires was a lower tier of premium ‘hot seat’ experiences, which consisted of the front-row spots at a higher price, with the same exclusive merch, just without the meet and greet element. Some of the comments included: “I kinda resent the people that are paying over the odds for this rubbish. We could all have had our own meet and greet for nothing”; “are they just wanting to rip off their fans now?”; “I have the funds. I just choose not to be exploited”; “it’s not fair on the fans that can’t afford the premium experience” (to which someone replied: “It’s not fair that I can’t afford a Porsche and have to get around in a Fiat”).

“Many customers are willing to ‘buy back’ their valuable time and avoid queues. But they want to feel great about it, not like they’ve been mugged”

“Not fair” and “rip-off” featured throughout the comments. Serious fans felt they were being insulted and exploited by the pricing. This was 48 hours before standard ticket prices were known. Once standard ticket prices were published, comments included, “That’s pretty reasonable”, and the general theme was that they were glad the act was touring and that good seats at affordable prices would be available.

Interestingly, someone did post a poll on the group asking if members would buy a standard, hot-seat or meet-and-greet tickets. The results of the poll were: 87% standard, 11% meet and greet and just 2% for the hot-seat tier – which, if you have any experience in economics and price level perception, will tell you that the middle (hot seat) tier was probably there to provide a value distinction between top/bottom pricing.

Touring is a business: a commercial enterprise with a degree of risk that not enough tickets will be sold and/or money made to cover big, unavoidable costs. The industry also knows that higher prices for one event can reduce the overall audience for another. Fans who feel that reality in the ticket price may interpret it as greed, and more transparency about the pricing could mean less negative feedback.

Who’s to say which fans are more genuine than others? It’s a nonsense status – you’re either a fan or you’re not. But the added word ‘genuine’ comes from an emotional place, a subjective place where only you can judge what’s true. I understand genuine passion – all of the team at Bigdog Live do. It’s what makes our tails wag, and it’s how we know who those fans are, what they want and where best to position that artist, act or event to ensure they get to make the best choices and have the best experiences.

No matter how many comments I read (and almost replied to), I always knew that for that artist, that event, I’d choose the meet and greet package. I can’t queue for two hours for an autograph, but I do want the opportunity to meet the lead singer and say thank you for the years of enjoyment. I know I’m lucky to be able to pay for that choice.

I can’t afford a Porsche, but I can sit in one for a few hours and pretend.

 


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Ticket prices are rising – but it’s all about the experience

Ian Taylor, head of ticketing and data management at bigdog Live, offers his thoughts on today’s BBC 5 Live report showing ticket prices in the UK have “doubled since the late 1990s”…

While some of the voxpops on the BBC article used words like ‘overpriced’, an equal if not greater number of people called in and said that the acts they’d seen recently were worth the money paid. I think this drills to the root of this – the experience.

There’s acknowledgment that income from recording and sales is down, so many acts are touring more to enhance that revenue deficit. But it’s also true that the actual experience is growing bigger in every sense. The shows are more spectacular, the venues bigger, and filling these with something not seen before isn’t cheap. Plus there’s a business need to pay fairly, to sort staff pensions, pay taxes, etc.

I think it’s easy to say it’s ‘extortionate’ if you personally feel you should be able to see that act but cannot afford that price. And it’s also true to say that the grassroots scene is still very fairly priced and accessible – so it’s really just to the arena and stadium end that this rise is happening.

The shows are more spectacular, the venues bigger – and filling these with something not seen before isn’t cheap

Ultimately, many promoters are indeed lifting prices to offset the perceived losses of the fan-to-fan secondary sites, where none of the revenue paid on higher-priced tickets goes back to the act, and back into the industry. It’s unclear if the prices looked at include booking fees charged by venues – which can add a tasty amount on top in many cases, so, for example, while the act may get £50, the customer may well pay nearer £60 or more.

What it all boils down to is that if people are willing to pay it, then that’s the market ‘bearing’ the price. It’s commercial enterprise.

I paid handsomely for both Fleetwood Mac and Kate Bush in recent years – and it’s the one and only time I expect to see them. Truly a memory to last a lifetime and certainly worth what I paid, as the shows were exceptionally well staged.

Did I get ripped off? Hardly.

 


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German live market reaches record highs, but visitors fall

The German live events market generated revenue of nearly €5 billion in the year ending 30 June 2017, an increase of 31% since 2013, according to new research by commissioned promoters’ association BDV.

In the period 1 July 2016–30 June 2017, sales from concerts and other live events totalled €4.99bn, compared to €3.82bn at the time of the last study by BDV (Bundesverband der Veranstaltungswirtschaft, or Federal Association of the Event Industry), in 2013. In the four years since, the live industry has jumped ahead of the book trade to become the leading economic driver of Germany’s growing entertainment market.

However, BDV president Jens Michow warns that growth has come despite falling visitor numbers, largely as a result of increased ticket prices.

“Despite all the happiness about this development, we should note two less encouraging facts,” explains Michow (pictured). “The study shows that despite the significant increase in sales, the total number of tickets sold declined from 120.6 million in 2013 to 113.5 million in the period investigated. It also demonstrates that the sales growth is largely due to increased ticket prices and a higher visit frequency, and not increasing visitor numbers.

“The main beneficiaries of the strong demand for live entertainment are not the organisers, but the artists”

“Artists and event organisers must give this some thought.”

The visit frequency, defined as the number of visits to live events per person annually, increased 8%, from 3.7 in 2013 to four in 2017.

Michow adds that artists, not promoters, are the ones who have mostly benefited from that 31% growth. “These figures should not obscure the fact that the main beneficiaries of the strong demand for live entertainment are not the organisers, but the artists,” he says. “Their continually increasing earnings expectations together with the ever increasing production costs and rising operational costs, are without doubt the main reason for the sales performance from event ticket sales.”

IQ’s European Arena Yearbook 2017 revealed that arenas in the GSA countries (Germany, Switzerland and Austria) had a particularly strong 2017 compared to venues elsewhere in Europe, although family shows are proving more popular than concerts.

The BDV study was undertaken by market research firm GfK with support from CTS Eventim.

 


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Corporates face ticket price rise after Trump axes deduction

The days of American businesses hiring boxes for clients at concerts and other live events could be coming to a close, after a recent tax overhaul eliminated a 50% deduction for entertainment-related business expenses.

The headline figures from the Tax Cuts and Jobs Act of 2017, signed into law on 22 December, include reduced rates of income tax (until 2025) and corporation tax (permanently), predicted by Trump to deliver a surging economy and thousands of new jobs.

However, the new legislation also eliminates a 50% deduction for business expenses for “entertainment, amusement or recreation”, meaning firms will see a doubling of their costs for concert tickets and hospitality for clients.

Eliminating the deduction “is really going to hurt the small businesses that need to promote their business by entertaining clients”, Charles Capetanakis, a lawyer at New York legal firm Davidoff Hutcher & Citron, tells Bloomberg Politics.

The loss of the entertainment expenses is “painful”, adds Washington, DC, lobbyist Ryan Ellis, although he notes with relief a 50% tax break for client meals was left untouched by the Tax Cuts Act.

 


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Price rise slows as 11% of European fests slash ticket costs

The increase in ticket prices for European music festivals slowed this year, reveals IQ’s new European Festival Report 2017, with the average cost of a ticket increasing only marginally after a huge jump from 2015 to 2016.

Reflecting increased costs for talent and production, ticket prices spiralled 8% in 2016, with OpenAir St Gallen’s Christof Huber pointing to a combination of rising security/infrastructure costs and, especially, artist fees. In 2017, that growth has largely stabilised, increasing just 1% to €148.36 (from €146.22).

Keeping that average price pegged are a number of factors: while 49% of European Festival Report 2017 survey respondents raised their ticket prices in 2017, 36% maintained pricing at last year’s levels. With artist fees, production costs and security, in particular, costing more year on year, increasing ticket prices hardly come as a surprise.

However, a significant 11% of festivals around Europe decided to decrease their ticket prices in 2017. Some reasoned that fewer festival days warranted a price break, while others simply could not secure big-name headline acts and were therefore able to keep prices down.

Festival ticket price increase, European Festival Report 2017

One area of ticketing that has undergone significant surgery in the past 12 months is the way in which our surveyed festivals sell their tickets. In our 2016 report, we noted that, overall, 51% of tickets were sold via the festivals’ own websites, while third-party online sales accounted for 27% of total sales.

This year, the dominance of online sales outlets was even more pronounced, with online sales via festivals’ own websites increasing their share to an impressive 60%, while third-party website sales also gained a bigger slice of the pie with 30% of overall festival ticket sales.

Underlining the growing importance of online sales, two years ago our 2015 report recorded sales by festivals’ own websites of just 42%, while third-party online sales were 39%. This could suggest that festival management have determinedly taken control of their own ticketing inventory to try to improve profit margins, rather than pay percentages to third-party sellers. However, the fact that those third-party online platforms increased their share of sales in 2017 might point to a marketing fight-back by the ticketing specialists, albeit at the expense of call-centre workers.

Get the full lowdown on Europe’s festival summer, including insights into capacity and attendance, staffing, VIP options, overseas attendance, new tech and RFID, safety, concerts and more, in the European Festival Report 2017.

European Festival Report 2017

 


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