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The "Dysfunctional" Live Music Business

The August 10 & 17 New Yorker features a piece calling the live music business "dysfunctional." Touring used to be a means of supporting an album. Now, album sales have dropped almost 50% since 2000, and up to 95% of downloaded music is stolen, according to some surveys. From a business perspective, the album is now just a teaser for the tour. But, just as technology created problems for the record industry, the online marketplace presents new challenges to the live music industry.

 

Selling tickets at reasonable prices creates a huge market for scalping, especially online, and scalping revenues never reach the industry or the artists. To recover some of the money lost to scalpers, Ticketmaster now runs TicketsNow, an online scalping haven, and charges steep commissions. Recently, Ticketmaster's website has redirected many potential ticket buyers to TicketsNow, even while many face-value seats for the same shows have remained unsold. This practice drew fire from Bruce Springsteen, who was "furious" when it happened to his fans. He went as far as to condemn a potential Ticketmaster/Live Nation merger, saying, "The only thing that could make the current ticket situation even worse for the fan than it is now would be Ticketmaster and Live Nation coming up with a single system."

 

With fans unhappy and the industry struggling to keep pace with changing technology, some tweaking of the current business model appears inevitable. Adding to the problem is the fact that stadium tours, which to a certain extent subsidize smaller shows, could dwindle in the near future. Major headliners like U2, Madonna and Bruce Springsteen are aging, and very few younger artists are capable of filling stadiums on a sustained basis. [The New Yorker]

 

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