The concert industry is officially in recovery mode, but not everyone is experiencing a sustained rebound.
While data from Live Nation’s first quarter of 2022 shows that the record year predicted by CEO Michael Rapino has materialized, many independent promoters in the concert business are sharing anecdotal evidence that sales are beginning to soften and costs are continuing to rise.
Despite these persistent fears about oversaturation, high ticket prices and inflation pressure on consumers, pent-up demand from the pandemic has continued to propel consumer spending. As of March 31, more than 70 million tickets were sold for shows in 2022, which is up 36% compared with the same point in 2019, according to Live Nation’s first quarterly report for the year..
Moreover, the number of shows on the books as of late April, when the last Live Nation earnings report was released, was up 44% compared with 2019. On its face, that looks like an 8% delta between demand and supply (that difference likely widens when factoring in concerts happening outside of the Live Nation ecosystem), but Live Nation officials tell Billboard that a year-to-year first quarter comparison doesn’t tell the whole story because of the cyclical nature of ticket sales, and says any gap between supply and demand is unlikely to cause serious oversaturation issues during a period of rapid growth. (Note: Since this story was first printed, Live Nation has since released its Q2 earnings numbers showing ticket sales are up 38% compared to 2019, outpacing show count which is up 30%.)
James “Disco Donnie” Estopinal Jr., who promotes raves and EDM shows mostly in Florida and Texas, says he believes the number of new events, especially in the dance category, has far outstripped demand, leading to softer sales for everyone in that market. While 2021 brought record sales, “that didn’t carry over into 2022,” he says.
Oversaturation has also created problems in California and Las Vegas, where an explosion of new festivals has diluted attendance for some organizers — or worse. Goldenvoice’s Day N Vegas, which had previously attracted a crowd of 80,000, was canceled due to weak ticket sales just weeks after being announced. (The festival was to mark the first live appearance for Travis Scott following the November 2021 Astroworld tragedy in Houston, which left 10 dead.) Other festival promoters have pushed through the weak demand but say the bump they enjoyed after the pandemic has been replaced by a broader slowdown in ticket sales due to oversaturation, high ticket prices and budget-conscious consumers. Factor in the effect of inflation on the price of fuel and goods, an equipment shortage and hiring difficulties, and many independents report that profitability is unlikely in 2022.
Other festivals, such as Lollapalooza, Austin City Limits and Baja Beach, are selling tickets but not selling out. Rolling Loud’s mainstay Miami festival, which typically sells out in one day and is the only festival to feature Ye (aka Kanye West), still had tickets available days before its start.
In May, LiveOne announced it was postponing its Spring Awakening festival in Chicago after its sister event there, Autumn Equinox, lost $3 million in 2021. On July 22, Insomniac announced it was canceling plans to expand its Project Glow series into Philadelphia.
The unease extends beyond festivals. While Machine Gun Kelly’s arena tour with Willow and Avril Lavigne has done fairly well, other acts attempting to make that leap from smaller venues, such as Kid Cudi, Leon Bridges and Lil Durk, have struggled to sell tickets.
If sellouts become less common in a saturated post-pandemic world, independents are much more likely to feel the economic pain than Live Nation or AEG. In fact, Live Nation’s latest earnings release doesn’t include any language about how many shows and festivals have sold all of their tickets. Growth for Live Nation has come from increased consumer spending through increases in ticket prices — while a small percentage of Platinum tickets on Bruce Springsteen’s 2023 tour made headlines, the real boost came from a 33% average increase in ticket prices that pushed average show grosses to $3.7 million — and on-site spending, as well as sponsorship dollars and the fees it generates from ticket sales.
Unlike many festival promoters whose main source of income is ticket sales, Live Nation is diversified enough to generate significant income from its events whether or not they sell out, creating more incentive to stage a higher volume of events to better pinpoint demand.
The same goes for Day N Vegas’ parent company, AEG. A source there confirms that parts of the company’s various touring and concert divisions — where profit-and-loss statements rely mostly on ticket sales outpacing costs — could be down this year. But overall, AEG, which operates a complex ticketing business, facility management team and sponsorship division (that closed out 2021 with a $700 million naming rights deal to rechristen Los Angeles’ Staples Center as Crypto.com Arena), is on track to be profitable in 2022.
That could leave independent promoters in a precarious position, but don’t rule the sellout dead yet. Earlier in July, the fourth annual Zedd in the Park mini-festival at L.A.’s State Historic Park hit its expanded capacity of 19,000, resulting in people who had expected to buy tickets at the box office — some of them decked out in LED-enhanced outfits — being turned away.
“This was the first time we attempted 19,000,” says Zedd’s agent, Lee Anderson, of Wasserman Music. It worked because Zedd was willing to stage a smaller version of his show, essentially at cost, and build fan momentum and enthusiasm organically until it hit critical mass. “We only stage this concept here in L.A., because it’s right for this market,” he adds. In Las Vegas, for example, Zedd goes big, performing at two nightclubs inside the brand-new Resorts World casino.
The success of this year’s Zedd in the Park date was “a slow build,” Anderson says. “It’s not just throwing something on sale and maxing it out.”
This story was written for the Aug. 6 edition of Billboard magazine using data from Live Nation’s first quarter financial report. On Aug. 4, the company released its second quarter financial reports. This story has been updated to denote that the data relied on in this story comes from the company’s first quarter.