P2P and Concert Prices

Concert ticket prices are skyrocketing. There’s some hullaballoo today about the role online filesharing plays in this phenomenon, though some say don’t believe the hype. It seems even Madonna‘s been implicated in the tussle. Apparently, concert tickets have risen, on average, by 8.9% every year between 1996 and 2003, as against a concurrent inflation rate of only 2.3%.

I’d like more insight into the methodology of this research, but for now, I’ll just comment on a couple of issues that I think are being overlooked in much of the discussion:

One factor that’s been completely ignored is that between 1996 and 2006, retail gasoline prices doubled (and in the United States, they nearly tripled). It’s hardly surprising to see the increased costs of staging a tour (e.g., fuel, freight) getting offloaded to consumers via increased ticket prices. Am I way off base here? Those tour buses guzzle thousands of litres of fuel just idling outside a venue to keep Dave Matthews’ beer fridge cold (not to mention the fleets of Peterbilts hauling Britney Spears’ gargantuan lighting and sound apparatus all over the place).

Also absent in the discussion is consideration of the different (though related) effects this economic upheaval has had on independent music scenes. The BBC article documents the unsurprising finding that

research into the market in the US … has found that in 1982, the top 1% of artists received 26% of concert revenue. By 2003, that figure had gone up to 56%.

Vanishing profits and fierce competition have decimated many smaller live music venues in North America (this is particularly true in Vancouver, where I live…RIP, Starfish Room), devouring tour opportunities for lesser known rock bands. The concomitant rise of electronica events and touring laptop acts (the best way to cost-cut – replace your entourage with robots!) has probably played a role in amplifying this trend, too.

Indie bands have been pressured by changing economic conditions to promote themselves more heavily (and far more cheaply) online on sites like myspace and last.fm. Inexpensive channels for online music marketing have been exploding all over the place, while Madonna’s company simply raises the price of admission after conducting some careful audience metrics. P2P filesharing has been instrumental in indie music successes, as recent research shows (original paper here, in PDF format).

The changing economies of popular music deserve our attention, but P2P is only one small piece of the puzzle.

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