POP ROCKS: Arena concerts are in trouble as recession remains

by Staff

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Though Viejas Arena has not been immensely affected by the recession, other venues are definitely feeling the heat of the poor economy. David J. Olender / Photo Editor

By Allie Daugherty, Managing Editor

It’s 9 p.m. on the East Coast. In a venue located in the heart of a city, a curtain is rising, slowly revealing tonight’s headlining act. Spotlights shining, the band steps forward to begin the show, but is momentarily halted. What was supposed to be a sold-out show has only drawn about half the expected guests, and the group is disappointed. The room feels empty.

Unfortunately for music lovers, this has not been a rare occurrence as of late. The economy is in a recession and the concert industry is hurting as a result. John Kolek, director of Viejas Arena, put it plainly: “There are not as many artists touring as there have been just simply because of the economy and the cost of the tour.”

This has been reflected across the nation. According to Pollstar, a company that keeps track of concert ticket sales, the top 100 grossing tours for the first six months of this year are down $196.8 million, or 17 percent, from the same period last year. Concert sales have not been this low since 2005.

Pollstar also stated larger shows are feeling the economic pain more than their smaller counterparts, as club shows are still attracting respectably sized audiences. Chris Goldsmith, the music consultant at Belly Up Tavern in Solana Beach, said business has actually improved at his venue since the economy’s downturn. The increase in gas prices a few years ago had more of an effect on the club because patrons spent their extra money at the pump instead of at ticket offices.

While the sold-out tours of acts such as Lady Gaga, The Black Eyed Peas and Justin Bieber have been exceptions, overall sales have been suffering. Prominent tours such as the Eagles and “American Idols LIVE!” have had to cancel dates, despite Live Nation, America’s top concert promoter, deploying tricks to help sell tickets. In June, Live Nation waived most of the extra fees for its amphitheater seats. When large numbers of tickets were still left unsold, the company began offering $10 tickets for shows on some Wednesdays in addition to its “Two for Tuesday” promotions.

However, some believe this is creating long-term negative effects in the business.

“They’re doing anything they can to get bodies in there so they can get the facility fee and get the bar business,” Goldsmith said. “Live Nation is doing it on a regular basis and others, to some extent. But what happens is it cheapens the perception of a (concert) ticket in the market. And it develops this habit of people not buying tickets in advance as much because they are waiting to see if it will be discounted or not … It’s like you’re penalizing people who buy on the first day … How do they feel when someone else buys the same ticket for half the price? … It’s a desperate measure.”

Viejas Arena has seen some of these effects, but is not really concerned. “We’ve definitely seen some negative effects. For us, ticket sales are down a little … Where we’ve really seen it more is in concession sales,” Kolek said.

However, Viejas Arena’s income is not affected by ticket sales. The venue receives a set, guaranteed amount of money each year from Live Nation via an exclusive rights contract regardless of how many tickets are sold. Students also pay a fee for the arena as a safety in case Live Nation decides to discontinue the contract in future years.

For San Diego, lower ticket sales mean fewer concerts. “In the overall scheme of the concert industry, San Diego is a secondary market,” Kolek said. “The artists that come here are artists whose tour allows them to route here, whose schedules have an open date.” When the promoters aren’t making as much money, they are less likely to expand the tour into secondary market locations.

Still, concert sales are expected to increase in the next year, partially because of tours  including the cast of “Glee,” Van Halen, Avril Lavigne, Christina Aguilera and Fleetwood Mac. Live Nation also hopes to boost its profits with up-selling. It will encourage fans who buy concert tickets to also spring for the performer’s CD, a DVD of the concert, T-shirts, ringtones, posters, books and banners.

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