Sturgill Simpson keeps it simple about why not? tour this fall.
The country artist announced on his website in July that while he and his team “do everything in our power to keep tickets in the hands of fans and out of the hands of scalpers,” they were choosing to use dynamic pricing for the 37 – run date.
While dynamic pricing is one of the concert business' most effective tools for keeping tickets out of the aftermarket, it's also a major factor in skyrocketing ticket prices, and Simpson was taking his fans' wallets into account.
For years, promoters sold tickets at a handful of price points, then watched them sell out and appear at huge markups on the secondary market — revenue that wouldn't have accrued to them.
Since then, scalpers have circumvented most efforts to prevent them, including one of the strategies Simpson uses: screening presale buyers. The only proven deterrent has been dynamic pricing: charging what the market will bring at the initial sale in the hope of limiting secondary markups.
In the early days of the music industry's post-pandemic return to live shows, when pent-up demand led to strong sales, dynamic pricing became the strategy of choice for major events. The move led to a 30% increase in ticket prices from 2019 to 2024, however, according to Billboard Boxscore, with the average ticket price of a top-40-grossing tour increasing from $111 to $144 in mid-2024 — 6.6% in the last six months.
With the pandemic in the rear-view mirror, many in the industry are expressing concern about the sustainability of this recovery. In recent weeks, The Black Keys, Jennifer Lopez and other high-profile artists have canceled tours amid backlash over ticket prices. (The Black Keys subsequently fired their management.)
According to Billboard Boxscore, only a handful of acts can charge more than $200 a ticket and sell out, and even more artists are pushing the boundaries on ticket price and quickly approaching the average ticket prices between $150 and $200, getting very close at the upper limit of what fans can or will pay.
“Support is up – we're seeing more fans coming out to shows, but our costs are cutting into our volume growth,” he said. Morgan MargolinCEO of Knitting Factory Entertainment, who says agents and managers are charging 30% to 40% more for acts than before the pandemic.
“It's becoming increasingly difficult to do business in major markets, especially with minimum wage increases,” he added. “If artists and managers and agents continue to scale beyond these fees, where is the tipping point?”
The Black Keys have successfully played American arenas in the past, but only a handful. Most of their dates were either festival slots or amphitheater and theater shows. In 2019, they earned $28 million in their co-headlining act Let's Rock run with Modest Mouse. tickets for that tour started at $36.50, with four priced under $100. For the band's canceled International Players tour, some tickets were priced at $59.75 and $89.75, but others were listed at $119.75, $159.75 and $199.75. By comparison, most of Simpson's tickets sell for $53 to $72.
Pricing tickets based on how much profit scalpers can make is difficult and risky. If they are overpriced and the tour falls on the original sale, it is almost impossible to save money. Cutting the price may alienate fans who paid full price. Stay the course and if the tour is deemed lost, the fans will avoid it.
“I think a lot of these artists get bad advice and don't think about the long-term consequences of chasing the big bucks,” says one arena booking executive. “And that will hurt them in the long run.”
A version of this story will appear in the August 31, 2024 issue Bulletin board.
from our partners at https://www.billboard.com/pro/concert-ticket-prices-higher-than-ever-will-fans-keep-paying/