Entertainment Venues - US - January 2009

SCOPE AND THEMES
What you need to know
Definition
Data sources
Sales data
Consumer survey data
Abbreviations and terms
Abbreviations
Terms
EXECUTIVE SUMMARY
Entertainment venue revenues increasing due to ticket price hikes
But ticket volume decreasing, revenues to hit ceiling by 2009
Top 100 tours represent more than half of total market revenue
Market leaders becoming all-in-one content, service providers
Secondary ticket resellers threaten market value of tickets
Key consumer findings
INSIGHTS AND OPPORTUNITIES
Invest in mobile ticketing to drive box office convenience, sales
Charge extra for special seating that is roomier, more comfortable
Build consumer loyalty, frequency through seasonal subscription clubs
INSPIRE INSIGHTS
 TREND: I TRAVEL THEREFORE I AM
I was there. You were not.
Hear me, see me, envy me
Cool show – now let’s go buy sushi and check our email
 TREND: IN SEARCH OF MEMORIES
Everyone’s documenting
Experience versus observation
MARKET SIZE AND FORECAST
Key points
Concert industry revenues increasing due to alarming rise in ticket prices
But ticket volume decreasing, revenues to hit ceiling by 2009
Figure 1: Total U.S. concert industry ticket sale revenues, at current prices, 2003-13
Figure 2: Total U.S. concert industry ticket sale revenues, at inflation-adjusted prices, 2003-13
Figure 3: Average ticket price for the top 100 tours, 1997-2008
Figure 4: Total tickets sold for the top 100 tours, 2003-08
Top 100 tours represent more than half of total market revenue
Figure 5: Total ticket grosses of the top 100 tours, at current prices, 2003-13
Figure 6: Total ticket grosses of the top 100 tours, at inflation-adjusted prices, 2003-13
COMPETITIVE CONTEXT
Secondary ticket resellers threaten market value of tickets
Legislation in some states, cities proposes to regulate secondary market
Secondary market expected to reach $10 billion by 2012 due to rising prices, demand
SEGMENT PERFORMANCE
Key points
82% of 2007 ticket volume sold for top venues in leading markets
Figure 7: Total tickets sold for the top 100 tours, 2003-08
Arenas leading venue segment for ticket sales
Figure 8: U.S. tickets sold, by venue or site, 2007*
SEGMENT PERFORMANCE—ARENAS
Key points
Arenas offer more revenue potential than competing venues
Madison Square Garden dominates arena ticket volume
Figure 9: Top ten U.S. arenas per tickets sold, 2007
SEGMENT PERFORMANCE—AMPHITHEATERS
Key points
Amphitheaters at risk due to rising gas prices, aging infrastructure
Figure 10: Top ten U.S. ampitheaters per tickets sold, 2007
Key points
Generous capacities, amenities make theaters safer bets for promoters
Radio City Music Hall dominates theater volume sales
Figure 11: Top ten U.S. theaters per tickets sold, 2007
SEGMENT PERFORMANCE—CLUBS
Key points
Clubs establish close ties with community, ticket buyers
House of Blues franchise threatens regional club operators
Figure 12: Top ten U.S. clubs per tickets sold, 2007
SEGMENT PERFORMANCE—OUTDOOR STADIA/FESTIVAL SITES
Key points
Events at stadia, outdoor sites are fewer, carry greater promoter risk
Destination festivals driving stadium/outdoor site segment
Sports franchises opening stadium doors up to more concerts, events
Figure 13: Top ten U.S. outdoor stadium/feestival sites per tickets sold, 2007
PROMOTION CHANNELS
Key points
Promotion companies set prices, control costs of entertainment events
About 80% of market controlled by two leaders: Live Nation and AEG Live
Figure 14: Top ten U.S. promoters, by tickets sold, 2007
Top ten tours of 2008 roughly split between Live Nation, AEG Live
Figure 15: Top ten selling North American tours of 2008, by revenue, dates, average primary and secondary market ticket prices and promoter, 2008
Key points
Live Nation dominates industry, controlling 155 venues worldwide
North American revenues represent almost half of total revenue
Figure 16: Live Nation revenues, at current and constant prices, 2003-07
Live Nation moves to control ticketing, artist revenue streams
PROMOTION CHANNELS—AEG LIVE
Key points
AEG Live controls 20% of ticket volume sales, second to Live Nation
Company avoids amphitheater market in favor of arenas, theaters, clubs
MARKET DRIVERS
Corporate sponsors spending more on entertainment venues, tours
Sports sponsorships reign, followed by entertainment tours, venues
Music sponsorship spending to total $1.04 billion in 2008
Sponsorship categories expanding as music events become more lifestyle-oriented
Figure 17: Music sponsorship spending on entertainment venues and tours, 2006-08
Banking crisis may affect entertainment venue naming rights
Average ticket price more than doubles over 11-year period
Figure 18: Average ticket price for the top 100 tours, 1997-2008
Live Nation’s “360 deals” driving up artist exclusivity, ticket prices
Long-term potential threatens short-term profits
University venues becoming more prominent players in market
Declining music sales may create ripple effect on future box office sales
Entertainment venues both isolated from, affected by declining music sales
Figure 19: Top-grossing world tours, 1997-2007
INNOVATION AND INNOVATORS
Paperless tickets designed to force secondary resellers from market
Layaway option helps guarantee box office threatened by recession
Live Nation revives brick-and-mortar sales through Blockbuster kiosks
Ticketmaster markets to disenfranchised consumers by suspending fees
ADVERTISING AND PROMOTION
Overview
Radio formats dictate which events are promoted on the air
Print media work best for regional events; format ad spending decreasing
Figure 20: U.S. newspaper advertising revenues, 2007-12
Venues promote events online virally and through branded websites
Figure 21: U.S. online advertising spending, 2008-13
Analysis of commercial television spots
Live Nation showcases synergy across multiple advertising platforms
Figure 22: Live Nation ad, 2009
Concessions, secondary entertainment major revenue generators for venues
Figure 23: House of Blues ad, 2009
Credit card partnerships generate revenues, awareness through pre-sales, promotions
Credit card partnerships consolidate ticketing opportunities for high-profile events
Figure 24: Billy Elliott ad, 2009
Recession generates messages that reflect ticket buyer fears, hesitations
Figure 25: Live Nation ad, 2009
ENTERTAINMENT VENUES—CONSUMER FREQUENCY
Key points
Over half of respondents staying home from concerts
Figure 26: Entertainment venue frequency, by gender, November 2008
Over a quarter of Baby Boomers attend concerts with relative frequency
Figure 27: Entertainment venue frequency, by age, November 2008
Respondents from households earning $100K+ attending 1-4 shows every six months
Figure 28: Entertainment venue frequency, by household income, November 2008
CONSUMER ENTERTAINMENT PREFERENCE
Key points
Classic rock dominates respondent entertainment choice
Figure 29: Consumer entertainment preference, by gender, November 2008
Preferences of some music types transcend respondent age
Wide age appeal repositions classic rock concerts as potential family fare
Older respondents in wider attendance than expected
Untapped older market for kiddie/tween shows
Figure 30: Consumer entertainment preference, by age, November 2008
Expanded age appeal of classic rock creates multiple revenue opportunities
Higher prices limit audiences for jazz/classical
Fans of jam band/indie rock may be more connected to technology
Lower-income respondents value authenticity, non-conformity
Figure 31: Consumer entertainment preference, by houseold income, November 2008
CONSUMER VENUE PREFERENCE
Key points
Stadium events, free festivals have widest appeal
Women may value atmosphere, intimacy more than male counterparts
Figure 32: Consumer venue preference, by gender, November 2008
Opera and symphony venues appeal to both ends of age spectrum
Figure 33: Consumer venue preference, by age, November 2008
Street and city festivals can “open up” to attract a broader income audience
Figure 34: Consumer venue preference, by household income, November 2008
Key points
Fan loyalty primary driver of repeat ticket sales
Male respondents more “event-driven,” females more “artist-driven”
Figure 35: Motivation to attend live music event, by gender, November 2008
Middle-aged respondents seek relaxation at shows
Older respondents are more driven by nostalgia
Figure 36: Motivation to attend live music event, by age, November 2008
Respondents from households earning $75-99.9K driven by genre, not artist
Figure 37: Motivation to attend live music event, by household income, November 2008
Concerns over ticket price, safety divides youth from older respondents
Figure 38: Motivation to not attend live music event, by age, November 2008
Key points
A precipitous generational divide in information access
Younger respondents are more plugged in by internet than any other media
Figure 39: Important factors in the purchase of tickets to live music events, by age, November 2008
Those from households $25K-$49.9K less likely plugged into internet sites
Figure 40: Important factors in the purchase of tickets to live music events, by household income, November 2008
Female respondents order online, while male respondents “DIY”
Figure 41: Ways consumers purchase tickets to live music events, by gender, November 2008
Older respondents a potential untapped market for online sales
Figure 42: Ways consumers purchase tickets to live music events, by age, November 2008
Key points
Concert merchandise as public and private expressions of lifestyle
Figure 43: Concert merchandise spending, by gender, November 2008
Improving concession lines may increase sales
Figure 44: Concert merchandise spending, by age, November 2008
Selling food, drink and T-shirts: “Eat, drink and be merry”
Figure 45: Concert merchandise spending, by household income, November 2008
Key points
Calming concerns about destination festivals
Using community, alternate activities to attract female respondents
Figure 46: Destination festival participation, by gender, November 2008
Younger respondents primary target audience for destination festivals
Figure 47: Destination festival participation, by age, November 2008
Those from households earning $100K+ likely to attend New Orleans fest
Figure 48: Destination festival participation, by household income, November 2008
Destination festivals are attractive as vacation options
Northeast region fertile for marketing destination festivals
Figure 49: Destination festival participation, by region, November 2008
Key points
Asian and Hispanic respondents have brand loyalty for music events
Blacks least frequent ticket consumers
Figure 50: Entertainment venue frequency, by race/ethnicity, November 2008
Asian respondents more driven by genre than specific artists
Figure 51: Motivation to attend live music event, by race/ethnicity, November 2008
Asians most dissatisfied with rising ticket prices, excessive spending
Figure 52: Motivation to not attend live music event, by race/ethnicity, November 2008
Asian respondents lead Ticketmaster purchasing but open to alternates
Figure 53: Ways consumers purchase tickets to live music events, by race/ethnicity, November 2008
Hispanic respondents more likely to support additional revenue streams
White, Asian respondents least invested in souvenir programs
Figure 54: Concert merchandise spending, by race/ethnicity, November 2008
Ethnic respondents and successful destination festivals
Figure 55: Destination festival participation, by race/ethnicity, November 2008
Asian, Hispanic respondents more plugged into digital media
Traditional media of primary importance to black respondents
Figure 56: Important factors in the purchase of tickets to live music events, by race/ethnicity, November 2008
CLUSTER ANALYSIS
Musicolics
Opportunity:
Ticketmastered
Opportunity:
Outdoor Phobics
Opportunity:
Figure 57: Music event attender clusters, November 2008
Figure 58: Entertainment venue frequency, by music event attender clusters, November 2008
Figure 59: Consumer entertainment preference, by music event attender clusters, November 2008
Figure 60: Consumer venue preference, by music event attender clusters, November 2008
Figure 61: Motivation to attend live music event, by music event attender clusters, November 2008
Figure 62: Concert merchandise spending, by music event attender clusters, November 2008
Figure 63: Important factors in the purchase of tickets to live music events, by music event attender clusters, November 2008
Figure 64: Ways consumers purchase tickets to live music events, by music event attender clusters, November 2008
Figure 65: Destination festival participation, by music event attender clusters, November 2008
Figure 66: Music event attender clusters, by gender, November 2008
Figure 67: Music event attender clusters, by age, November 2008
Figure 68: Music event attender clusters, by income, November 2008
Figure 69: Music event attender clusters, by race, November 2008
Figure 70: Music event attender clusters, by Hispanic origin, November 2008
APPENDIX: OTHER USEFUL CONSUMER TABLES
Figure 71: Motivation to not attend live music event, by gender, November 2008
Figure 72: Motivation to not attend live music event, by income, November 2008
Figure 73: Ways consumers purchase tickets to live music events, by region, November 2008
APPENDIX: TRADE ASSOCIATIONS