The Australian : Music’s money menvendredi 20 février 1998
Source : The Australian
From The Australian :
Music’s money men The sound of music has never been more expensive, reports PETER WITTS
INTERNATIONAL music promoters are hearing a new, and somewhat discordant, tune this summer : a chorus of disapproval over ever-increasing ticket prices.
As concert goers fork out as much as $203 a seat to see the likes of U2, Mariah Carey, Cliff Richard, EltonJohn and Billy Joel over the next month, the money men behind the music are defending themselves against claims that prices have become exorbitant.
U2 have also expressed dismay over the price of tickets in the Australian market, with lead singer Bono saying after the band’s Perth concert this week that the price of tickets "stinks". However, promoters such as Michael Coppell and Paul Dainty claim the cost of tickets has very little to do with them and their profit of between 6 and 10 per cent of the price is fair considering the risks they take in getting acts to our shores.
Coppell, who is promoting English rock band Oasis in their Australian tour next month, claims the costs of bringing tours here have escalated dramatically over the past decade as acts have become more sophisticated in terms of production and many have achieved superstar status. Industry analysts admit that claim has been made for several decades. In the late 1970s, unreserved tickets to David Bowie’s Serious Moonlight tour cost between $40 and $45, and in 1984 tickets to Bruce Springsteen’s Born in the USA tour cost $50.
"For every dollar of ticket prices, between 30 and 40 per cent goes to the artists," he says. "The venue takes about 20 to 30 per cent -the cost of production, for example lighting, sound. Other logistics, such as flights and hotels, take about another 20 per cent, so that leaves the promoter with between 5 and 10 per cent.
"The costs of doing tours has jumped and the risk factor has gone up 1000-fold. Things have got more expensive.
"If it goes wrong and no sales come, the promoter takes the loss, although if a group does not come because of illness or if they break up then usually it is expected the promoter will be compensated," he says.
Paul Dainty, whose present promotions include Cliff Richard, Mariah Carey and U2, argues that a return of about 10 per cent is only reasonable, given that funds must be borrowed on a large scale.
He says U2’s three-week PopMart tour during March will employ 200 people and cost about $10 million.
"It involves 39 trucks on the road and to get all that rolling the costs are staggering," he says.
"They come in this weekend and we have to feed about 200 people every night."
CHEAP tickets for the shows will cost about $80, compared with around $45 for U2’s concerts a few years ago. The top-of-therange tickets for the Irish band’s Sydney Football Stadium shows, which will seat up to 40,000 people per show, will set you back $150.
But that is nothing compared with $203 for a "gold circle" ticket for the three Sydney Cricket Ground Elton John-Billy Joel concerts to be performed in early March.
A pew to hear songstress Mariah Carey can set you back $122 and tickets to Burt Bacharach’s recent four Sydney Hilton shows cost up to $150. Cheap seats (behind a pillar) are $100.
Similarly, a top-of-the-range ticket for Celine Dion’s tour at Melbourne’s Crown Casino costs $200, compared with about $50 when she was last in Australia.
Dainty admits that is not cheap but insists that "the point that people miss in Australia is that 40 per cent of cost is dispersed back into the economy, into the limousine companies, the hotels, labour and airlines". He says ticket prices in Australia have traditionally been higher than those in the US because of the cost of moving tours around disparate cities.
Then there is the currency risk. Dainty says the dollar’s fall from around US74c last October to a low just above US63c in early January makes the promotion game that much harder.
"It definitely makes a difference. It can change your artist guarantee by up to $1 million and that can mean you have to charge more at the box office.
"If the rate stays where it is then there will be less tours or ticket prices will have to rise and there is a limit to that."
Coppell says the dollar’s fall over the past decade has hurt the industry.
"The dollar has gone down over a long period.
When I was first going overseas 20 years ago the dollar was worth about $ US1.20, now it is worth about US70c, and that makes the industry more difficult."
Regardless of the reasons why prices have risen during the past few years, promoters argue that they continue to sell tickets and that the market is the ultimate source of fairness.
Dainty points out that U2’s first Sydney show is all but sold out, there have been solid sales for the second and good audiences are expected in Perth and Melbourne.
A spokesman for promoter Kevin Jacobsen, who wishes not to be named, says the price of tickets is "something that is governed by the act and by the market. The market can only stand so much and acts can price themselves out of the market."
According to ticketing agency Ticketek the three Sydney Cricket Ground shows for Billy Joel and Elton John havemet with strong demand, with the two weekend performances particularly well bid.
The Australian Consumers Association agrees that while the cost of concert tickets continues to rise, there is no platform for complaint as long as punters are willing to pay up.
"This issue has come up before, but the thing is it is almost a perception pricing matter, rather than normal market pricing matter," says ACA spokesperson Gail Kennedy.
"We know the costs are not necessarily based on normal costings and maybe it includes the belief of how much the consumer is willing to pay.
"But that is a market, in a sense, and consumers seem willing to bear the rise.
"While that is the case, the Australian Competition and Consumer Commission cannot come in."
Jan Stoneham, chief executive of the Entertainment Industry Employers’ Association, says there is no doubt the pricing of tickets has been rising sharply over recent years.
She believes it has probably reached a limit, "for now". However, Stoneham echoes the promoters and the consumers association when she says "it is a market". "Commercial reality is that if there is demand, then that is where it starts," she says.
"The promoter has to take the punt of asking himself if it is worth it because at some stage the audience will say enough is enough."
Others say the market is more complicated, however, with one analyst suggesting that a promoter might take risks if he has a strong line of credit. For example, it is not a commercial secret that Paul Dainty last year established a joint venture with Kerry Packer’s Consolidated Press, to be called Consolidated Entertainment.
Dainty was quoted at the time as saying the venture would attempt to "expand worldwide and explore a host of new ventures and business opportunities". He said it would enable the partners to move into the "top rung" in the live entertainment industry.
At these prices, one would have to say the top rung has been reached.