Since the live event business rebounded in 2010, VIP programs, which offer seats closer to the stage, meet-and-greets with the artist and, in one extreme case, a private jet to the festival grounds (see story, below), increasingly have become big business. “We’re at a point where most tours have some sort of VIP ticket packaging,” says Zeeshan Zaidi, senior vp/GM of artist services at Ticketmaster. “It’s definitely a growing area.”
Jennifer Breithaupt, senior vp entertainment marketing at Citi, which has worked with Billy Joel, John Legend and Katy Perry to create VIP opportunities for its cardholders, agrees, saying, “2014 is truly the year of experience for fans. There are so many unique packages offered.”
Due to the exclusive perks they provide and the premium prices they command -- from $175 for a 5 Seconds of Summer VIP experience to a whopping $50,000 for a perch on the Burning Man festival’s Billionaires Row -- these packages also have become an easy target for media seeking an “us vs. them” class warfare storyline. But architects of these offerings tell Billboard that critics are missing the point.
VIP packages, they say, are about business, not class -- an opportunity to generate new revenue streams for the industry by attracting more demanding breeds of concertgoers, including “superfans,” as Breithaupt puts it, who’ve already seen the artist live “and are looking for an elevated experience.”
Dan Berkowitz, founder of CID Entertainment, an innovator in the VIP packaging field, says there also is a market for music lovers who aren’t into roughing it with the sweaty masses at festivals. “These are people who won’t go to a show unless they know they’re going to be comfortable, that meals will be prepared for them, that there will be an air-conditioned bathroom nearby and that they’ll be able to get close to the artist,” he says.
The concept is not that much different from the first-, business- and coach-class price tiers offered by airlines. “As you get older and more seasoned, you need the luxuries in order to enjoy the experience, and unfortunately this world works on money,” says Dave Precheur, who oversees the priciest VIP experiences in the market, Burning Man’s Billionaires Row, where packages include lodging in RVs outfitted with two queen-size beds, a two-person waitstaff and a private jet charter to the festival site.
Precheur acknowledges that because he caters to “extremely rich individuals,” Billionaires Row has become “a very contentious thing, because Burning Man is supposed to be this super-hippie event” where basic tickets run from $200 to $500. But, he adds, the carping is shortsighted. Revenue from general-admission tickets pays for infrastructure, safety, traffic regulation and emergency medical expenses, but little else. “Most people miss that [Billionaires Row patrons] are the very people that fund the big art, the art cars, all the things that make Burning Man such a spectacular visual and artistic event,” says Precheur.
With production tabs for major festivals running a lot more than $10 million, premium concertgoer experiences are a means to fatten the thin margins of live entertainment while keeping the bulk of ticket prices lower. They can add 3 percent to 5 percent to the gross of a tour or event. For a concert tour, that amounts to the total revenue generated by a single show. For a festival that grosses $20 million, VIP offerings can add $1 million to the bottom line.
According to SLO VIP Services president Shelley Lazar, who works with such acts as Paul McCartney, The Rolling Stones and Lady Gaga, premium tickets held for artists’ VIP packages generally don’t exceed more than 2 percent of the seats in a venue. For a 20,000-capacity arena, 400 tickets might be set aside. “These packages are priced after factoring in facility fees and ticket agency fees on top of [the base price], along with overhead costs -- staffing, shipping, et cetera,” says Lazar. VIP tickets that don’t sell “get put back into the regular system,” adds Zaidi.
The dawn of VIP programs can be traced back more than 20 years to the introduction of “gold circle” premium seating that was designed to combat ticket scalpers. Berkowitz began tinkering with more expansive offerings when he was tour manager for rock band The Disco Biscuits and packaging “tickets with hotel accommodations and shuttles,” he says.
After leaving the road in 2006, he launched CID a year later. “It was just me, and the guest services line rang to my cellphone,” he recalls. Seven years later, the company employs 50 and dominates the VIP market. Its festival clients include Bonnaroo, Coachella, the New Orleans Jazz Fest, Austin City Limits Music Festival and Lollapalooza. CID also has a strong presence in country touring, working with such clients as Kenny Chesney, Luke Bryan and Lady Antebellum. Berkowitz says the genre’s fan-centric business model is perfectly suited to CID’s VIP approach.
CID handled George Strait’s farewell The Cowboy Rides Away Tour, and Berkowitz says the VIP package included the “King’s Exhibit,” a museum-like homage to Strait, for which “George lent us a lot of his most prized possessions, including his Army uniform and Country Music Hall of Fame saddle. It really felt like a celebration of his career.”
As the market grows, CID faces an increasing number of rivals. “Our competition right now is other promoters doing VIP themselves,” he says. Among them, Lazar, Live Nation’s VIP Nation and AEG Live’s own in-house operation.
The competition ensures that VIP experiences will evolve. “We keep trying to up the experience, whether it’s something as simple as sunscreen at the shuttle stop or orange slices in the golf carts,” says Berkowitz. And Breithaupt envisions a VIP experience that will include stage time. “It’s coming,” she says, then adds with a laugh: “Let’s hope for the audience’s sake that the people who buy that package can actually play.”
Additional reporting by Mitchell Peters.
This article first appeared in the Oct. 4 issue of Billboard.