#TBT: 3 Ways You’re Wrong About Live Entertainment, Part II
Beyond the flippant title of this post, there lurks a serious purpose: to dispel some of the most damaging and widely held misconceptions about the business. If you need to catch up, go back and look at Misconception No. 1: New technologies are making actually going out a thing of the past.
Now that we’re all together, on to …
Misconception No. 2: Everything is sold out! If you’re in the business, of course, you don’t believe this, but the general public and a lot of other people who should know better fall into the trap of believing that the biggest issues in live entertainment are ticket scarcity.
The fact is that about 50% of all inventory that ever becomes available to a live show is unsold. “Yes,” many will say, “but how about concerts? They’re sold out.”
The best information I have suggests that as an overall industry, concerts sell out at a higher percentage, but that it might be more like 70% overall.
Of course, these numbers can still be extremely healthy ones for the folks putting on these shows, but the important dynamic in the marketplace is not primarily about being ‘sold out.’ It’s about yield management and, more importantly still, marketing for new patrons and “growing the pie” of the audience.
Now don’t get me wrong. I admire what StubHub and others have done to create a robust secondary market, but the real story is in the primary market in that with the right practices and marketing, the secondary market can and should be nearly irrelevant.
Remember: No news reporter ever says, “Tonight’s Aerosmith concert is 78% sold, representing a massive profit for the act and the venue.” The only ticket sales story that ever gets reported is more like: “Hannah Montana tickets are completely sold out and going for $1,000 on the secondary market.”
And, of course, the reporter never adds, “The buying so far has been mostly by brokers speculating that this will be a popular show, but we’ll keep our eye on the actual sale price of these tickets as we get closer to the date of the show.”
That would be boring.