Aerosmith meet Adam Smith.
Classic economics is poised to enter the concert business after a lousy 2010 for the industry. Year-over-year attendance figures were reportedly down by the high teens to somewhere around 20% last year, depending on which numbers you believe. Shows were cancelled and performers came down with mysterious ailments to cover up slow ticket sales throughout the year.
It’s not hard to see what happened. The average concert ticket in the mid 1990s cost $26. In 2009, the last year for which we have reliable stats, the average concert ticket was $67. That’s a huge increase. Then you have all those Ticketmaster rip-off charges.
I recall being a young guy and being furious when the “convenience charge” on a concert ticket was 25 cents. Now it’s not uncommon for that charge to be $10 sometimes!
So what do you do? Promoters and musicians are facing the fundamental economic laws of supply and demand in the school of Adam Smith. You want to raise your ticket prices too high? You won’t find much demand for your tickets then.
A lean 2010 now has promoters saying they’ve learned their lesson. 2011 is supposed to be the year of the discount concert ticket.
Editor’s note: This segment originally aired January 2011.