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Entertainment Venues - US - January 2009

This report explores the entertainment venue market in the U.S., with a focus on the leading concert promotion companies, providing insight into the external and internal factors that are affecting future sales growth and industry innovations. Specific questions that are answered in this report include, but are not limited to, the following:

  • What effect does consolidation among the industry's leading players have on the overall market?

  • How are revenues distributed among the major players involved in producing a live event?

  • How have rising ticket prices affected ticket volume?

  • How have the dramatic changes in the recording industry affected live touring?

  • What effect has the popularity of destination festivals had on the overall market?

  • Who are the leading artists on the concert tour circuit and why?

  • How can the market appeal more to the Hispanic consumer and how can that outreach appeal to a wider consumer base?

  • Which promotion companies are innovating in their segments and how can others learn from their success?

  • How are sports franchises entering the market to create competition among the major players?

  • What media are industry leaders using most to deliver the most effective marketing campaigns?

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Table of contents

  1. Scope and Themes

    • What you need to know
      • Definition
        • Data sources
          • Sales data
            • Consumer survey data
              • Abbreviations and terms
                • Abbreviations
                  • Terms
                  • Executive Summary

                    • Entertainment venue revenues increasing due to ticket price hikes
                      • But ticket volume decreasing, revenues to hit ceiling by 2009
                        • Top 100 tours represent more than half of total market revenue
                          • Market leaders becoming all-in-one content, service providers
                            • Secondary ticket resellers threaten market value of tickets
                              • Key consumer findings
                              • Insights and Opportunities

                                • Invest in mobile ticketing to drive box office convenience, sales
                                  • Charge extra for special seating that is roomier, more comfortable
                                    • Build consumer loyalty, frequency through seasonal subscription clubs
                                    • Inspire Insights

                                      • Trend: I Travel Therefore I Am
                                        • I was there. You were not.
                                          • Hear me, see me, envy me
                                            • Cool show – now let’s go buy sushi and check our email
                                              • Trend: In Search of Memories
                                                • Everyone’s documenting
                                                  • Experience versus observation
                                                  • Market Size and Forecast

                                                    • Key points
                                                      • Concert industry revenues increasing due to alarming rise in ticket prices
                                                        • But ticket volume decreasing, revenues to hit ceiling by 2009
                                                          • Figure 1: Total U.S. concert industry ticket sale revenues, at current prices, 2003-13
                                                          • Figure 2: Total U.S. concert industry ticket sale revenues, at inflation-adjusted prices, 2003-13
                                                          • Figure 3: Average ticket price for the top 100 tours, 1997-2008
                                                          • Figure 4: Total tickets sold for the top 100 tours, 2003-08
                                                        • Top 100 tours represent more than half of total market revenue
                                                            • Figure 5: Total ticket grosses of the top 100 tours, at current prices, 2003-13
                                                            • Figure 6: Total ticket grosses of the top 100 tours, at inflation-adjusted prices, 2003-13
                                                        • Competitive Context

                                                          • Secondary ticket resellers threaten market value of tickets
                                                            • Legislation in some states, cities proposes to regulate secondary market
                                                              • Secondary market expected to reach $10 billion by 2012 due to rising prices, demand
                                                              • Segment Performance

                                                                • Key points
                                                                  • 82% of 2007 ticket volume sold for top venues in leading markets
                                                                    • Figure 7: Total tickets sold for the top 100 tours, 2003-08
                                                                  • Arenas leading venue segment for ticket sales
                                                                    • Figure 8: U.S. tickets sold, by venue or site, 2007*
                                                                • Segment Performance—Arenas

                                                                  • Key points
                                                                    • Arenas offer more revenue potential than competing venues
                                                                      • Madison Square Garden dominates arena ticket volume
                                                                        • Figure 9: Top ten U.S. arenas per tickets sold, 2007
                                                                    • Segment Performance—Amphitheaters

                                                                      • Key points
                                                                        • Amphitheaters at risk due to rising gas prices, aging infrastructure
                                                                            • Figure 10: Top ten U.S. ampitheaters per tickets sold, 2007
                                                                          • Key points
                                                                            • Generous capacities, amenities make theaters safer bets for promoters
                                                                              • Radio City Music Hall dominates theater volume sales
                                                                                • Figure 11: Top ten U.S. theaters per tickets sold, 2007
                                                                            • Segment Performance—Clubs

                                                                              • Key points
                                                                                • Clubs establish close ties with community, ticket buyers
                                                                                  • House of Blues franchise threatens regional club operators
                                                                                    • Figure 12: Top ten U.S. clubs per tickets sold, 2007
                                                                                • Segment Performance—Outdoor Stadia/Festival Sites

                                                                                  • Key points
                                                                                    • Events at stadia, outdoor sites are fewer, carry greater promoter risk
                                                                                      • Destination festivals driving stadium/outdoor site segment
                                                                                        • Sports franchises opening stadium doors up to more concerts, events
                                                                                            • Figure 13: Top ten U.S. outdoor stadium/feestival sites per tickets sold, 2007
                                                                                        • Promotion Channels

                                                                                          • Key points
                                                                                            • Promotion companies set prices, control costs of entertainment events
                                                                                              • About 80% of market controlled by two leaders: Live Nation and AEG Live
                                                                                                • Figure 14: Top ten U.S. promoters, by tickets sold, 2007
                                                                                              • Top ten tours of 2008 roughly split between Live Nation, AEG Live
                                                                                                  • Figure 15: Top ten selling North American tours of 2008, by revenue, dates, average primary and secondary market ticket prices and promoter, 2008
                                                                                                • Key points
                                                                                                  • Live Nation dominates industry, controlling 155 venues worldwide
                                                                                                    • North American revenues represent almost half of total revenue
                                                                                                      • Figure 16: Live Nation revenues, at current and constant prices, 2003-07
                                                                                                    • Live Nation moves to control ticketing, artist revenue streams
                                                                                                    • Promotion Channels—AEG Live

                                                                                                      • Key points
                                                                                                        • AEG Live controls 20% of ticket volume sales, second to Live Nation
                                                                                                          • Company avoids amphitheater market in favor of arenas, theaters, clubs
                                                                                                          • Market Drivers

                                                                                                            • Corporate sponsors spending more on entertainment venues, tours
                                                                                                              • Sports sponsorships reign, followed by entertainment tours, venues
                                                                                                                • Music sponsorship spending to total $1.04 billion in 2008
                                                                                                                  • Sponsorship categories expanding as music events become more lifestyle-oriented
                                                                                                                      • Figure 17: Music sponsorship spending on entertainment venues and tours, 2006-08
                                                                                                                    • Banking crisis may affect entertainment venue naming rights
                                                                                                                      • Average ticket price more than doubles over 11-year period
                                                                                                                          • Figure 18: Average ticket price for the top 100 tours, 1997-2008
                                                                                                                        • Live Nation’s “360 deals” driving up artist exclusivity, ticket prices
                                                                                                                          • Long-term potential threatens short-term profits
                                                                                                                            • University venues becoming more prominent players in market
                                                                                                                              • Declining music sales may create ripple effect on future box office sales
                                                                                                                                • Entertainment venues both isolated from, affected by declining music sales
                                                                                                                                    • Figure 19: Top-grossing world tours, 1997-2007
                                                                                                                                • Innovation and Innovators

                                                                                                                                  • Paperless tickets designed to force secondary resellers from market
                                                                                                                                    • Layaway option helps guarantee box office threatened by recession
                                                                                                                                      • Live Nation revives brick-and-mortar sales through Blockbuster kiosks
                                                                                                                                        • Ticketmaster markets to disenfranchised consumers by suspending fees
                                                                                                                                        • Advertising and Promotion

                                                                                                                                          • Overview
                                                                                                                                            • Radio formats dictate which events are promoted on the air
                                                                                                                                              • Print media work best for regional events; format ad spending decreasing
                                                                                                                                                  • Figure 20: U.S. newspaper advertising revenues, 2007-12
                                                                                                                                                • Venues promote events online virally and through branded websites
                                                                                                                                                    • Figure 21: U.S. online advertising spending, 2008-13
                                                                                                                                                  • Analysis of commercial television spots
                                                                                                                                                    • Live Nation showcases synergy across multiple advertising platforms
                                                                                                                                                        • Figure 22: Live Nation ad, 2009
                                                                                                                                                      • Concessions, secondary entertainment major revenue generators for venues
                                                                                                                                                        • Figure 23: House of Blues ad, 2009
                                                                                                                                                      • Credit card partnerships generate revenues, awareness through pre-sales, promotions
                                                                                                                                                        • Credit card partnerships consolidate ticketing opportunities for high-profile events
                                                                                                                                                            • Figure 24: Billy Elliott ad, 2009
                                                                                                                                                          • Recession generates messages that reflect ticket buyer fears, hesitations
                                                                                                                                                              • Figure 25: Live Nation ad, 2009
                                                                                                                                                          • Entertainment Venues—Consumer Frequency

                                                                                                                                                            • Key points
                                                                                                                                                              • Over half of respondents staying home from concerts
                                                                                                                                                                  • Figure 26: Entertainment venue frequency, by gender, November 2008
                                                                                                                                                                • Over a quarter of Baby Boomers attend concerts with relative frequency
                                                                                                                                                                    • Figure 27: Entertainment venue frequency, by age, November 2008
                                                                                                                                                                  • Respondents from households earning $100K+ attending 1-4 shows every six months
                                                                                                                                                                      • Figure 28: Entertainment venue frequency, by household income, November 2008
                                                                                                                                                                  • Consumer Entertainment Preference

                                                                                                                                                                    • Key points
                                                                                                                                                                      • Classic rock dominates respondent entertainment choice
                                                                                                                                                                          • Figure 29: Consumer entertainment preference, by gender, November 2008
                                                                                                                                                                        • Preferences of some music types transcend respondent age
                                                                                                                                                                          • Wide age appeal repositions classic rock concerts as potential family fare
                                                                                                                                                                            • Older respondents in wider attendance than expected
                                                                                                                                                                              • Untapped older market for kiddie/tween shows
                                                                                                                                                                                  • Figure 30: Consumer entertainment preference, by age, November 2008
                                                                                                                                                                                • Expanded age appeal of classic rock creates multiple revenue opportunities
                                                                                                                                                                                  • Higher prices limit audiences for jazz/classical
                                                                                                                                                                                    • Fans of jam band/indie rock may be more connected to technology
                                                                                                                                                                                      • Lower-income respondents value authenticity, non-conformity
                                                                                                                                                                                          • Figure 31: Consumer entertainment preference, by houseold income, November 2008
                                                                                                                                                                                      • Consumer Venue Preference

                                                                                                                                                                                        • Key points
                                                                                                                                                                                          • Stadium events, free festivals have widest appeal
                                                                                                                                                                                            • Women may value atmosphere, intimacy more than male counterparts
                                                                                                                                                                                                • Figure 32: Consumer venue preference, by gender, November 2008
                                                                                                                                                                                              • Opera and symphony venues appeal to both ends of age spectrum
                                                                                                                                                                                                • Figure 33: Consumer venue preference, by age, November 2008
                                                                                                                                                                                              • Street and city festivals can “open up” to attract a broader income audience
                                                                                                                                                                                                  • Figure 34: Consumer venue preference, by household income, November 2008
                                                                                                                                                                                                • Key points
                                                                                                                                                                                                  • Fan loyalty primary driver of repeat ticket sales
                                                                                                                                                                                                    • Male respondents more “event-driven,” females more “artist-driven”
                                                                                                                                                                                                        • Figure 35: Motivation to attend live music event, by gender, November 2008
                                                                                                                                                                                                      • Middle-aged respondents seek relaxation at shows
                                                                                                                                                                                                        • Older respondents are more driven by nostalgia
                                                                                                                                                                                                            • Figure 36: Motivation to attend live music event, by age, November 2008
                                                                                                                                                                                                          • Respondents from households earning $75-99.9K driven by genre, not artist
                                                                                                                                                                                                              • Figure 37: Motivation to attend live music event, by household income, November 2008
                                                                                                                                                                                                            • Concerns over ticket price, safety divides youth from older respondents
                                                                                                                                                                                                                • Figure 38: Motivation to not attend live music event, by age, November 2008
                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                • A precipitous generational divide in information access
                                                                                                                                                                                                                  • Younger respondents are more plugged in by internet than any other media
                                                                                                                                                                                                                    • Figure 39: Important factors in the purchase of tickets to live music events, by age, November 2008
                                                                                                                                                                                                                  • Those from households $25K-$49.9K less likely plugged into internet sites
                                                                                                                                                                                                                    • Figure 40: Important factors in the purchase of tickets to live music events, by household income, November 2008
                                                                                                                                                                                                                  • Female respondents order online, while male respondents “DIY”
                                                                                                                                                                                                                      • Figure 41: Ways consumers purchase tickets to live music events, by gender, November 2008
                                                                                                                                                                                                                    • Older respondents a potential untapped market for online sales
                                                                                                                                                                                                                        • Figure 42: Ways consumers purchase tickets to live music events, by age, November 2008
                                                                                                                                                                                                                      • Key points
                                                                                                                                                                                                                        • Concert merchandise as public and private expressions of lifestyle
                                                                                                                                                                                                                            • Figure 43: Concert merchandise spending, by gender, November 2008
                                                                                                                                                                                                                          • Improving concession lines may increase sales
                                                                                                                                                                                                                              • Figure 44: Concert merchandise spending, by age, November 2008
                                                                                                                                                                                                                            • Selling food, drink and T-shirts: “Eat, drink and be merry”
                                                                                                                                                                                                                                • Figure 45: Concert merchandise spending, by household income, November 2008
                                                                                                                                                                                                                              • Key points
                                                                                                                                                                                                                                • Calming concerns about destination festivals
                                                                                                                                                                                                                                  • Using community, alternate activities to attract female respondents
                                                                                                                                                                                                                                      • Figure 46: Destination festival participation, by gender, November 2008
                                                                                                                                                                                                                                    • Younger respondents primary target audience for destination festivals
                                                                                                                                                                                                                                        • Figure 47: Destination festival participation, by age, November 2008
                                                                                                                                                                                                                                      • Those from households earning $100K+ likely to attend New Orleans fest
                                                                                                                                                                                                                                          • Figure 48: Destination festival participation, by household income, November 2008
                                                                                                                                                                                                                                        • Destination festivals are attractive as vacation options
                                                                                                                                                                                                                                          • Northeast region fertile for marketing destination festivals
                                                                                                                                                                                                                                            • Figure 49: Destination festival participation, by region, November 2008
                                                                                                                                                                                                                                          • Key points
                                                                                                                                                                                                                                            • Asian and Hispanic respondents have brand loyalty for music events
                                                                                                                                                                                                                                              • Blacks least frequent ticket consumers
                                                                                                                                                                                                                                                • Figure 50: Entertainment venue frequency, by race/ethnicity, November 2008
                                                                                                                                                                                                                                              • Asian respondents more driven by genre than specific artists
                                                                                                                                                                                                                                                  • Figure 51: Motivation to attend live music event, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                • Asians most dissatisfied with rising ticket prices, excessive spending
                                                                                                                                                                                                                                                  • Figure 52: Motivation to not attend live music event, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                • Asian respondents lead Ticketmaster purchasing but open to alternates
                                                                                                                                                                                                                                                    • Figure 53: Ways consumers purchase tickets to live music events, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                  • Hispanic respondents more likely to support additional revenue streams
                                                                                                                                                                                                                                                    • White, Asian respondents least invested in souvenir programs
                                                                                                                                                                                                                                                        • Figure 54: Concert merchandise spending, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                      • Ethnic respondents and successful destination festivals
                                                                                                                                                                                                                                                          • Figure 55: Destination festival participation, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                        • Asian, Hispanic respondents more plugged into digital media
                                                                                                                                                                                                                                                          • Traditional media of primary importance to black respondents
                                                                                                                                                                                                                                                              • Figure 56: Important factors in the purchase of tickets to live music events, by race/ethnicity, November 2008
                                                                                                                                                                                                                                                          • Cluster Analysis

                                                                                                                                                                                                                                                              • Musicolics
                                                                                                                                                                                                                                                                • Opportunity:
                                                                                                                                                                                                                                                                  • Ticketmastered
                                                                                                                                                                                                                                                                    • Opportunity:
                                                                                                                                                                                                                                                                      • Outdoor Phobics
                                                                                                                                                                                                                                                                        • Opportunity:
                                                                                                                                                                                                                                                                          • Figure 57: Music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 58: Entertainment venue frequency, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 59: Consumer entertainment preference, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 60: Consumer venue preference, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 61: Motivation to attend live music event, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 62: Concert merchandise spending, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 63: Important factors in the purchase of tickets to live music events, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 64: Ways consumers purchase tickets to live music events, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 65: Destination festival participation, by music event attender clusters, November 2008
                                                                                                                                                                                                                                                                          • Figure 66: Music event attender clusters, by gender, November 2008
                                                                                                                                                                                                                                                                          • Figure 67: Music event attender clusters, by age, November 2008
                                                                                                                                                                                                                                                                          • Figure 68: Music event attender clusters, by income, November 2008
                                                                                                                                                                                                                                                                          • Figure 69: Music event attender clusters, by race, November 2008
                                                                                                                                                                                                                                                                          • Figure 70: Music event attender clusters, by Hispanic origin, November 2008
                                                                                                                                                                                                                                                                      • Appendix: Other Useful Consumer Tables

                                                                                                                                                                                                                                                                          • Figure 71: Motivation to not attend live music event, by gender, November 2008
                                                                                                                                                                                                                                                                          • Figure 72: Motivation to not attend live music event, by income, November 2008
                                                                                                                                                                                                                                                                          • Figure 73: Ways consumers purchase tickets to live music events, by region, November 2008
                                                                                                                                                                                                                                                                      • Appendix: Trade Associations

                                                                                                                                                                                                                                                                        Companies Covered

                                                                                                                                                                                                                                                                        • AMC Entertainment Inc.
                                                                                                                                                                                                                                                                        • American Express Company (The)
                                                                                                                                                                                                                                                                        • AMR Corporation (American Airlines)
                                                                                                                                                                                                                                                                        • Anheuser-Busch Companies Inc
                                                                                                                                                                                                                                                                        • Apple, Inc
                                                                                                                                                                                                                                                                        • AT&T Inc.
                                                                                                                                                                                                                                                                        • BB&T Corporation
                                                                                                                                                                                                                                                                        • Blockbuster USA
                                                                                                                                                                                                                                                                        • Cinemark, Inc.
                                                                                                                                                                                                                                                                        • Citibank
                                                                                                                                                                                                                                                                        • Clear Channel
                                                                                                                                                                                                                                                                        • Craigslist
                                                                                                                                                                                                                                                                        • Dell Inc.
                                                                                                                                                                                                                                                                        • EMI Group plc
                                                                                                                                                                                                                                                                        • Facebook, Inc.
                                                                                                                                                                                                                                                                        • Greenfield Online
                                                                                                                                                                                                                                                                        • Harrah's Entertainment Inc.
                                                                                                                                                                                                                                                                        • Home Depot (USA)
                                                                                                                                                                                                                                                                        • IMAX Corporation
                                                                                                                                                                                                                                                                        • JPMorgan Chase & Co
                                                                                                                                                                                                                                                                        • Live Nation
                                                                                                                                                                                                                                                                        • MBNA Corporation
                                                                                                                                                                                                                                                                        • McDonald's U.S.A.
                                                                                                                                                                                                                                                                        • Motorola Mobility Holdings
                                                                                                                                                                                                                                                                        • MTV Networks
                                                                                                                                                                                                                                                                        • Napster Inc.
                                                                                                                                                                                                                                                                        • National Football League Inc.
                                                                                                                                                                                                                                                                        • Netflix, Inc.
                                                                                                                                                                                                                                                                        • Nokia Corporation (US)
                                                                                                                                                                                                                                                                        • Recording Industry Association of America [RIAA]
                                                                                                                                                                                                                                                                        • Regal Entertainment Group
                                                                                                                                                                                                                                                                        • SMG plc (Scottish Media Group)
                                                                                                                                                                                                                                                                        • Sony BMG Music Entertainment
                                                                                                                                                                                                                                                                        • Southwest Airlines Co.
                                                                                                                                                                                                                                                                        • Target Corporation
                                                                                                                                                                                                                                                                        • The New York Times Company
                                                                                                                                                                                                                                                                        • Ticketmaster
                                                                                                                                                                                                                                                                        • Tower Records USA
                                                                                                                                                                                                                                                                        • U.S. Bureau of Labor Statistics
                                                                                                                                                                                                                                                                        • Universal Music Group
                                                                                                                                                                                                                                                                        • Verizon Wireless (Cellco)
                                                                                                                                                                                                                                                                        • Virgin Group Ltd.
                                                                                                                                                                                                                                                                        • Virgin Mobile Usa Llc
                                                                                                                                                                                                                                                                        • Wachovia Corporation
                                                                                                                                                                                                                                                                        • Walmart Stores (USA)
                                                                                                                                                                                                                                                                        • Walt Disney Company, The
                                                                                                                                                                                                                                                                        • Warner Music Group
                                                                                                                                                                                                                                                                        • Washington Mutual Inc
                                                                                                                                                                                                                                                                        • YouTube, Inc.

                                                                                                                                                                                                                                                                        Entertainment Venues - US - January 2009

                                                                                                                                                                                                                                                                        £3,199.84 (Excl.Tax)