Friday, December 10, 2010

Music? It's alive and well at Aspen Live

Every year a small group of music business people get together up in Aspen. It's more conversation than conference, and it's rarely dull. [Images: Don Strasburg, MGMT, Skrillex, Bob Lefsetz, Jamie Loeb.]

Some may come to Aspen Live just for the skiing. But most come for the give and take that develops between promoters, managers, ticket sellers, marketers, tech people and more. Jim Lewi, who organizes the event, is a always good for interjecting lively elements into the mix, and the cast of characters includes everyone from the notable blogger, Bob Lefsetz, to the outspoken AEG promoter, Don Strasburg. This is a great cast of characters, that includes the former manager of the Doors, the VP of Marketing for Nederlander Concerts (The Greek, The Grove) the manager of MGMT, the owner of the Belly Up here in Aspen, and many more, and everyone has an opinion. Or two. So what were the big topics of conversation on Day #1?

Goldstar and Discount Ticketing

MGMT's manager asked if we wanted to talk about ticketing. No one responded. At first. Then things began to warm up a bit. To kick this segment off, Jim McCarthy, the CEO of Goldstar and Editor of the Live 2.0 blog, talked a little bit about his company. Goldstar has a membership list of 1.3 million people who are interested in attending live events. What do the members want? They want to know what's going on, what's available, and they want a great price. Most of Goldstar's ticket selling business is in sports, theatre and performing arts. Live music has been a more difficult nut to crack. But the company has grown consistently and now has a substantial presence in LA, San Francisco and eight other cities, and they expect to enter 10 new markets in 2011. 

Godstar's deal is pretty straightforward, and while it's not for everyone, it has proven to be a real winner in some contexts. The ticket normally costs $100? With Goldstar, you get that ticket for $50. Why would a promoter do this? If those tickets weren't going to sell anyway, it's better to sell them at a discount (and have people come to the show, buy a beer, pay for parking, etc.) than let the seats go empty.  

One of the things I love about this group is its willingness to listen to input from those outside the music business. They're not closed - at least not initially. They may be a bit skeptical at first. But if anyone has a useful perspective to bring to the group, they are welcomed and encouraged.

Pretty early in the conversation, Don Strasburg talked about the problem of "the middle." The seats in the front sell quickly because they're great seats. The seats in the back sell because they're cheap. But the middle, that's a different story. The middle is hard. Many others agreed. 

What's the average number of shows a person goes to each year?

Jim McCarthy did a good job addressing this one. He compared it to the average height of a basketball team. That number might be 5'6" - but it obscures the fact that the key players on the team are 6'10," 6'7" and 6'3." So it is with the live entertainment business. Some people don't go to any shows. Some go to more than 10 a year. Goldstar's goal is to move everyone up just a bit - to get the people who went to 10 shows last year going to another 2-3 shows this year; to get the people who went to just 2-3 going to 5 or six; etc.

How much do you spend to promote a show?

One notable promoter: we spend 8% of the gross proceeds on promotion. Another prominent figure in the industry: "That's not enough! You've got to spend at least 10%! The first promoter: "We actually think that in some cases 8% might be too much." Another: the figures for marketing budget in other parts of the entertainment industry - e.g., film - are much higher - 25%.

What works today in terms of reaching fans?

Radio still seems to have significant life left it in. It isn't what it used to be. But Jamie Loeb from Nederlander sharted the data: a surprising number - 50%+ - of respondents to a survey (all under 24) said they discovered new music via the radio. And this was terestrial radio. Internet radio came in as the source for discovery among 14%.

Interesting artists were the subject of discussion, some of them new and not yet wideley known, some far more established.. Passion Pit, Zac Brown Band, Skrillex, Phoenix, Boombox. How did they get their start? The manager for the Avett Brothers: a great artist with a great show generates word-of-mouth. 

And we talked for awhile about electronic music and the growing popularity of more DJ-driven shows with younger audiences. 

Someone noted that younger audiences can't afford tickets to classic rock shows. (To which one of the participants responded: "[Even] I can't afford a ticket to classic rock shows!")

What about compensating the fans themselves for promoting the shows? 

Don Strasburg talked about compensating fans for promoting shows. He looked at me for a moment and said "Remember that idea?" He was making reference to a conversation we had many years about about starting a new legitimate, but "Napster-like" P2P service. The idea: the record stores are no longer needed. The new model in the new digital world would allow us to compensate the fan directly for the digital redistribution of great music. I thought long and hard about building a company to do that and decided against it. (Another company, Passalong Networks, did try to make a go of this, but it closed up shop a few years ago.)

The reason I rejected the model was pretty simple. I didn't like the world it would create. If a fan is urging me to listen to the latest recording of Artist X, I want to have some confidence that the fan isn't on the take. 

So I reacted pretty strongly to the idea that we should compensate fans for promoting a show. Same problem. But I am not suggesting at all that fans are unimportant for promotion. Quite the opposite. Friend-based promotion is becoming more and more valuable by the day. Given what we're doing with Pavlov Games, I strongly believe there is a way to harness fan-driven promotion without, in effect, "killing the goose that lays the golden eggs."  The right way to do this, I argued, is to make sure that we reward fans in ways that boost their credibility within their online and offline communities. 

By the way, you can get a feel for what goes on at these conferences just by reading Bob Lefsetz's newsletter; go ahead, subscribe to the Lefsetz Letter.

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