It's Summertime - and while the living may be easy, getting to check out a live show by your favorite artist or band isn't, or should I say it's not easy on the wallet. As any concertgoer will tell you, ticket prices for live shows continue to rise, seemingly unaffected by any fluctuations in the economy - indeed, in spite of the economic downturn, ticket prices have increased by a whopping 43% over the last three years, according to a survey conducted by Pollstar.
So what accounts for this? Staggering overhead costs? Greed? And if it costs so much to put on a larger-than-life spectacle, why aren't artists and their handlers thinking differently, to allow more of their fan base access? The current tour of 60's icons The Rolling Stones highlights this dilemma: ticket prices for the Stones were among the highest per seat than any other live act this year. Looking for some answers, I approached Berklee School of Music professor John Kellogg to get his input.
Our conversation managed to touch upon other topics as well, including his stint as tour manager for 70's outfit The O'Jays, and his impressions on the economic currency of reality talent shows like The Voice and American Idol. I thank him for allowing me to pick his brain, and for sharing not only some valuable insights, but wonderful musical anecdotes in his career:
DG: Will you share a little bit of your resumé with our readers?
JK: Certainly - I am the Assistant Chair of Music Business Management over at Berklee College. I'm an entertainment lawyer by trade. Early on in my career, I began as a performer, working with the group Cameo back in the late 70's. I studied to be an entertainment lawyer sometime after that, and represented acts like The O'Jays, Gerald Levert and others. Eleven years ago, I brought my business experience to Berklee in a teaching capacity, and have been instructing students on the nuts and bolts of business management ever since.
DG: Tell me, what's the most important thing you convey to students at Berklee regarding what it takes to effectively manage your career, from a business standpoint?
JK: One thing they definitely need to get a handle on is the concept of multiple streams of income: if an artist is primarily a songwriter, the revenue stream would come from licensing and royalties; if the artist is a performer, then hitting the road and developing their following through live performance would be extremely important, and represents their main revenue stream. But there are other opportunities that could extend beyond that - maximizing your artist brand through appearing in movies for example, creating a clothing or scent line is another marketing strategy. What's been particularly profitable for artists in the urban contemporary genre has been aligning oneself with a liquor brand - Sean (P Diddy) Combs has been remarkably successful launching his own brand of vodka. We want our students to realize the full scope of financial opportunities open to them - and to see that although music is a very tangible component of that picture, it's just one piece of the pie.
DG: From your own experience and observation, would you say its a given that young people today are almost intuitively savvy in that regard?
JK: Yes, for sure. Not only that, they've become adept at creating their own niche markets. I remind the students I work with that its their world now, and they are molding the shape and future of the music business by their own involvement in it, and the creativity they bring to the table. Just witness how well they've utilized the Internet's potential as a marketing and promotional tool - something that wasn't available to folks like The O'Jays or The Stones forty years ago. It used to be that the role of the Internet for an artist was as a place to post music videos - now artists are using the Internet to directly connect to and interact with their audience, and have expanded their audience significantly as a result of unlocking its potential.
DG: And how would you say the record labels have responded to this phenomenon?
JK: The labels have learned to adapt. As an entertainment lawyer, I've seen this firsthand - the contractual language has been modified to take these revenue streams into account. Of course, the labels have less money to spend up front, and sales of physical product have been in steady decline for some time now. So their business model has changed, and contracts nowadays are incorporating as many revenue streams as possible when signing on new talent. Also, label A&R and PR folk are educating themselves on the marketing end of things in this new environment.
DG: Touching upon something you said earlier - how important has touring become for emerging artists?
JK: It's tremendously important - I always advise my students who want to get into the business to go out there and perform.....anywhere and everywhere. Building your audience should be a top priority. Generally speaking, major label interest doesn't materialize until an artist has a loyal and significant following, and that can only come about by hitting the road and making your presence known. In addition, it's very important to the bigger picture, career-wise.
DG: What do you mean?
JK: I'll give you an example - I mentioned to you my work with The O'Jays. Well, The O'Jays have been performing for over fifty years now, and continue to do so. It's their concert performances that have kept them going.........the band hasn't had a hit on the Billboard charts for decades; their last gold album was the 1991 release Emotionally Yours on EMI. And since that time, The O'Jays continue to secure gigs solely on the basis of their live performance. I tell my students that whatever genre of music they're into, you have to engage your audience. Once you do that, your following will support all your other endeavors - they'll buy your t-shirts, drink your branded liquor, use your cologne, catch your films, etc. What I love about the music business is the heart-to-heart interaction that takes place between an artist and his/her audience, that's one constant that will never go away.
DG: That heart-to-heart connection certainly applies to The O'Jays, and would explain their longevity as a touring entity.....
JK: That's true, but let me share a quick story with you. I'm from The O'Jays hometown of Cleveland, Ohio, and grew up on their music. The first time I saw them live, I was just a teenager, and my immediate reaction to them was "these guys are incredible!" But (and I've shared this story with my students many times), there was a period of time when The O'Jays were not successful. In fact, they were really struggling - I remember the guys were living around the corner from me during that period. I recall seeing them at a neighborhood club opening up for The Temptations, when no one really knew who they were. Their performance was so inspiring though, I made up my mind then and there that if The O'Jays didn't make it in the music business, I wanted no part of it: if a band that talented couldn't catch a break, then the industry must be too crooked and corrupt. But through their perseverance playing out wherever they could, they finally caught the attention of songwriting duo Gamble and Huff, who were connected with Clive Davis (and the CBS imprint, Philadelphia International Records.) When the time came to sign their first artist, Gamble and Huff didn't hesitate to call on The O'Jays, because they knew their talent, which the band epitomized in a live setting, could sell a lot of records for the label. Most folks who were unfamiliar with The O'Jays before their recording career took off just assume the band was an overnight sensation, but the truth of the matter is, The O'Jays made the quality of their music their top priority, and never stopped believing in themselves, especially during their lean years. I call this the "it theory" - if you have it, and you work it, you can make it.
DG: Well put. And yet, you can't deny the other dynamic that has come to play for the younger generation: we are living in the age of American Idol, where someone can appear on a reality competition show, win, and become signed onto a major label virtually overnight. Doesn't that change the game in some respects?
JK: Yes and no. I mean, you can use the technology of Youtube, or the recognition of being picked on Idol to get your "big break" at stardom. But after that, the looming question becomes "what kind of longevity are you going to have in the business? Interestingly, I started my teaching career the same year American Idol burst onto the landscape. We have seen a lot of artists who've emerged from Idol taking up space on the charts immediately upon being "discovered" as it were. However, out of all those artists who made an initial splash on the charts courtesy of Idol, the ones who have learned the art of "working it" have been the ones who remain visible, and that has only been a scant handful in the past eleven years. The major Idol players still popular on the music charts would be Kelly Clarkson and Carrie Underwood. I also feel Scott McCreery (season ten winner) has enormous potential as a country artist to share the same longevity as Underwood and Clarkson, given the proper grooming.
DG: From what I've seen, Carrie Underwood understands the ethic of "working it", as she's been doing that feverishly, post-Idol stardom.....
JK: You got it. After her Idol win, Underwood wasn't just hanging around, expecting everything to be handed to her: she played every club and county fair that she could, and I respect her for that. Which is why now, when Carrie Underwood hits the stage, she is "on" from the very first note she sings. She understands not just how to be a great performer, but she has that "it factor" that has made her the success she is today.
DG: I'm wondering why, in this age of X-Factor, Idol and The Voice, we haven't discovered the "Next Big Diva" - along the lines of Whitney Houston, Mariah Carey or Celine Dion...
JK: I think that Kelly Clarkson had "diva potential" in the beginning, until she had a run-in with Clive Davis. This happened around the time of her second or third album: Kelly wanted to start writing her own material instead of having others write songs for her, but Clive didn't think her songwriting was strong enough, and she capitulated to his years of experience. That little episode with Clive interrupted her star trajectory for a brief period, but that was enough, which is why she now finds herself trying to claw her way back into the stratosphere of superstardom again.
DG: Now, onto ticket prices: increasing ticket costs are a a major bone of contention for concertgoers and fans. Despite our lackluster economy, it appears concert prices are somehow immune to the market fluctuations as in other areas of commerce. What accounts for that?
JK: Primarily, the largest slice of the pie I believe is going to the artists themselves - as in compensation for them to perform, and if they want to be paid X amount of dollars per show, that is going to translate into a a higher price in order to see them. But what most folks don't realize is the artist bears the financial burden for set-up and transportation of musicians, instruments, sound, lighting and what have you. And of course, massive production sets are a part of that scenario - it is a given that a major artist is going to have a pretty spectacular production set to enhance the concert experience. An act like Beyoncé, The Rolling Stones or Bruce Springsteen may take in close to a million dollars per show, but the cost of putting on such a spectacle is going to take a whole lot of money - light shows, jumbotrons, costumes, pyrotechnics.........they don't come cheap. The construction costs alone for building such elaborate sets are staggering. And we haven't even gotten into the area of taxes and service fees, which also vies for a slice of that pie as well.
DG: But are there areas in which the concert experience and touring aspect could be streamlined? Is everything conceivable being done to try and minimize overhead?
JK: It's interesting that you would bring up that point. In the Summer of 2010, LiveNation booked a number of acts, and scaled back the ticket prices. The result, however (which I'm not necessarily attributing to LiveNation) of the smaller-scale shows was a financial disaster for everyone involved: LiveNation lost money, acts lost money, seats went unsold - in some cases, they had to give the tickets away. This year, prices notwithstanding, seems to be a pretty good year....I've been watching the box office tallies very carefully. For instance, Alicia Keys (who is currently on tour) is getting booked in 5-7 thousand seat venues, yet only selling about 75% of the house. At some point, the artists will have to step back and take a look at the bigger picture - when the prices become so high, they are out of reach for even their most diehard fans, they'll need to reassess what it means to tour, and will figure out some innovative ways to preserve that connection between their music and their audience, that is only fully realized in the performance arena.