Concert promoters sell fewer tickets but earn bigger profits

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Old conventional wisdom: The concert industry is in a slump, the executives in charge don't know how to fix it, and fans are stuck with mediocre concerts.

New conventional wisdom: The concert industry has changed -- welcome to the new reality.

Three consecutive years of declining ticket sales constitutes more than a historical asterisk. Industry trade magazine Pollstar recorded 38.7 million concert tickets sold to the top 100 tours in 2003, 37.6 million in 2004, and 36.1 million last year.

"You have to figure that's not a healthy sign for the industry overall," Pollstar's editor-in-chief Gary Bongiovanni told reporters at the time.

Nevertheless, the concert industry is taking those lemons and learning to make lemonade. Despite the decline in ticket sales, Pollstar reports that last year the industry saw a 10.7 percent increase in profits over the previous year's total of $2.8 billion, for a record $3.1 billion. It's too soon to tally this year's numbers, but analysts anticipate the curious pairing of both trends -- declining ticket sales and increased profits through pricey reserved seating -- continuing in 2006.

Pittsburgh is "its own little universe," said promoter Michael Belkin, president of the Ohio Valley region for Live Nation, which books most of the region's big shows. Pittsburgh's 2006 summer concert season reflected some of the national trends, he said, but characteristically in its own way.

"We were pleased with the talent lineup that came to the Post-Gazette Pavilion and Chevy Amphitheatre," said Belkin. "We think it was a pretty successful season."

The era of 40-plus concerts per year at the 20,000-seat Post-Gazette Pavilion is probably long gone, but the number of Pavilion shows jumped from 24 in 2005 to 29 this year. Seven of those were sellouts: Rascal Flatts, Jimmy Buffett, Kenny Chesney, two for Dave Matthews and two for Toby Keith, who caps his Burgettstown shows at 17,000 to reduce traffic. Eight of the 29 concerts were country, reflecting the continued growth of the genre nationally and in the Pittsburgh market.

"One thing we've learned is there's an ebb and flow of the business," said Lance Jones, vice president of Live Nation Pittsburgh and manager of the Post-Gazette Pavilion. "We think the right number [of Pavilion shows] is about 30."

Last year, Pittsburghers packed into three stadium concerts. In 2006, there was only Bon Jovi, after a proposed Christian concert by Jars of Clay was cancelled at PNC Park. The Heinz Field rock concert, which left some seats open with about 45,000 tickets sold, was out of Live Nation's hands. It was a function of the Gridiron Stadium Network, a concerted effort among nine NFL stadium owners to make better use of their spaces during the off-season. Heinz Group president Tom Rooney has been hinting all summer that the stadium could host two massive country blowouts next year.

Overall, Belkin said Live Nation is better using its coast-to-coast influence to pair artists in more compelling joint tours. The promoter packaged some of the season's most interesting shows: Tom Petty and The Allman Brothers, Sheryl Crow and John Mayer, and Steely Dan and Michael McDonald.

"In a perfect world, you hope that one plus one equals three," said Belkin. "You hope that [pairing the right combinations of talent] can do more than they could do individually ... provide more bang for the consumer's buck."

With one way in and out of the Post-Gazette Pavilion, traffic is always problematic for top-drawing shows. But Jones said a traffic study commissioned last year helped the venue and the private contractor that coordinates parking to reduce the lines.

"We changed the internal roadway signage, repointed autos so they now face the egress in the back lot, post traffic advice on our Web site and passed out fliers telling customers which lanes to take on the way out," said Jones. "Quite honestly, I think we improved the time of an out at sold-out shows by 30 to 40 minutes."

Jones said customer relations are improving in general. This year, some 2,000 customers who purchased Pavilion tickets by e-mail replied to an online survey requesting information about their concert experiences.

"We love to get feedback," he said. "People were very candid about their experiences, positive and negative. Their input was really invaluable in some of the upgrades we made this year."

Part of the reason that ticket sales are down but profits are up is that nationwide, Live Nation is balancing the numbers of shows at outdoor amphitheaters and indoor arenas, where attendance is generally lower but, with more reserved seats at higher prices, grosses are generally higher. Look for that strategy to be reflected in next year's Mellon Arena concerts.

Belkin and Jones said it's too soon to make specific predictions about next year but to expect more country shows and to keep your fingers crossed for shorter traffic lines to Burgettstown after PennDOT opens a new connector linking Route 22 to the airport area.

John Hayes can be reached at or 412-263-1991.


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