Concert Tour Success in North America: An Examination of the Top 100 Tours from 1997 to 2005

Abstract

Radio airplay, album sales and concerts provide revenues to songwriters, music labels, and musicians. From 1997 to 2005, concert revenues in North America increased from $1.3 billion to $3.1 billion. We analyze concert trends by investigating pricing and attendance, the superstar phenomenon, and structural changes in the way the concert tour industry operates. To conduct this analysis we look at the performance of the top 100 tours from 1997 to 2005. These data comprise a chart of sorts—an annual review of the performance of the concert industry, with performers being ranked in terms of gross concert revenues.

Notes

1. One interesting development in recent years has been the development of concert CDs—for the concert just attended. During a 2004 tour by the Pixies, 20% of audience members purchased such CDs (Conniff).

2. Prior to 1997 detailed data were provided for only the Top 50 tours. We elected to concentrate on the 1997 to 2005 period for the sake of having a consistent number of the top tours to make comparisons from year to year.

3. The recording data are for the United States and are found on the Recording Industry Association of America (RIAA) web site ⟨http://www.riaa.com/marketing data/facts.asp⟩.

4. The other two venues had ticket sales as a percentage of total seating capacity of 87 and 99%, respectively.

5. Such computations must be viewed cautiously since the artists in each decile, as well as the Top 100 artists, change from year to year. Moreover, there are very likely changes in the venues played from year to year. Factors other than price also might be changing between 1999 and 2005. Having made these disclaimers, the results do suggest some negative correspondence between price increases and attendance.

6. David Throsby reports on studies showing that the price elasticity for Broadway theater is in the −0.33 to −0.63 range; other studies of live performances are consistent with these results.

7. The superstar phenomenon suggests that the mean (the average) of the gross revenue distribution would exceed the median (the middle value in an ordered array) since the mean is pulled toward extreme values in the distribution. In every year starting in 1997 and ending in 2005, the mean far exceeds the median.

8. We have also calculated the Gini coefficient, a common measure of income equality. The coefficient has a range of between 0 and 1, with zero representing a situation where everyone has the same income and 1 representing a situation where one person has all of the income and all others have no income. The Gini coefficient for Top 100 gross revenues tends to be between 0.45 and 0.50, indicating a great deal of gross revenue inequality among the Top 100 groups. More importantly, the Gini coefficient has fallen from around 0.47 in 1997 to 0.42 in 2005.

9. This perverse response to higher wages is well known for very high paid workers. Extremely high paid workers can often reduce the hours they work and still earn the same or more total income because of the higher fees they receive.