Many shows don't sell out, who'da thunk? Yesterday everybody was complaining they couldn't get a ticket and now they're saying no one wants to go, which is it? What we've got here is the internet, where everybody reports, mostly without background knowledge, and then things are repeated as fact and... Suddenly you've got an issue where you didn't have one before! The Pussycat Dolls? In the pre-internet days, no one would assume a pop band that had been away for years with no discernible fan base would be able to sell tickets. But the Spice Girls did... God, you'd think this was rocket science. But no, it's betting, a casino! What you've got here is managers who want to sell their wares, and their wares are their acts. And then you've got talent buyers who either bite or do not. Not to mention, there's tons of FOMO. Is your competitor going to get the tour, establishing a relationship that might run forevermore? Do you want to take that risk? So especially with old acts with no tour history, everybody is making a bet, and sometimes the bet is wrong. But this doesn't only happen in music. Look at the Cybertruck, it was projected to sell 250,000 to 500,000 units when production was fully ramped up. But it actually sold 38,965 units in 2024, and only 20,000--21,000 units in 2025. Talk about a stiff! But at a much higher cost... Elon Musk and Tesla didn't know whether people would want to buy the Cybertruck until it was on offer. But he hyped the hell out of it before it came to market. Just like the music business does. Ever notice that suddenly an act is all over the news? It's usually to gain interest in new recordings, then again, you've got Taylor Swift's Eras tour... Where all the tickets in the U.S. went on sale on the same day so there would be mania, which would drive sales further. I mean the audience doesn't want to be left out. This was insurance against not going completely clean, like the previous time around. But the story became about a Ticketmaster failure... That's hysterical, it was a bot field day, what Ticketmaster said was true, but it didn't want to say no to Taylor, say that it couldn't sell all those tickets on one day, risking that another company would come and take her business. And Ticketmaster really had no idea how bad the bots would be until the tickets went on sale. There are acts that will sell out no problem, like Olivia Rodrigo. But notice how she keeps adding dates. Yup, she could announce multiple shows at once, but that risks them not selling out, which is anathema to an act. Once you're playing to empty seats, you're on the downhill slide. So fans are rabid for the few seats available, and after the announced shows sell they add extras, which were on hold...this was the plan. It's not like the promoters were shocked that there was sellout demand for the announced shows...they just didn't know how many shows she could sell! Now it used to be if someone canceled a show or a tour, few would know about it. Possibly no one other than those who had already purchased tickets. But in the internet era, word spreads like wildfire, and nothing spreads like negative news. Haters love this stuff, they want everybody to know. Never mind that a lot of shows that are announced as being sold out are not. Which is why you should be wary of buying extra tickets to scalp. You can't get rid of them, because the demand was not as great as perceived, and you can't compete with the experts, which is what we've learned with prediction markets: "Why Almost Everyone Loses—Except a Few Sharks—on Prediction Markets - A WSJ analysis shows a small number of accounts on Polymarket and Kalshi—often pros using data-driven algorithmic trading—take home most of the winnings" https://www.wsj.com/finance/investing/polymarket-kalshi-betting-profits-prediction-markets-eb23ac11 But today everybody believes they're an expert. They're privy to all this information online, of course they know how to do it. But would you let someone who watched a lot of YouTube videos set your broken leg, or install a stent? OF COURSE NOT! Then why is the average punter so convinced they know everything about the concert business? They keep on beating up promoters, but the margins are amazingly thin. And not every show is successful., but the band still has to get paid. But there are stories of acts going on the road and coming home with no money and it must be someone's fault, and the obvious targets are the promoter and ticketing company. They're stealing from the acts! But did the act have to tour at this cost? And how much demand is really there? Think about it. You're a pretty good instrumentalist. Why don't you go on the road. But you wouldn't, because you can't sell enough tickets to make it financially viable. That's where the rubber meets the road, ticket sales...are enough people big enough fans that they'll lay down all that money to see you. They might listen to your record, but go to a show? There's not only the ticket price, but the transportation, the parking, the food... In most cases, it's a big decision. And while I'm quoting the "Wall Street Journal," did you see this article? "The Boy Band Heyday May Be Over—But the ‘Man Band’ Era Has Just Begun - From the Backstreet Boys to the Jonas Brothers to Boyz II Men, adult women are paying up to see their favorite grown-up boy bands this summer" https://www.wsj.com/arts-culture/music/nkotb-the-backstreet-boys-boyz-ii-men-tour-97f915e0 Here's the nougat: "Melissa Hicks, a 46-year-old Baltimore elementary-school teacher who bought tickets to see NKOTB three times in Vegas over July 4 weekend, a cheap seat for $153, then VIP tickets for $1,910 and $1,491—plus she paid for travel." That puts the kibosh on all those stories that the rich are buying the good seats, driving up prices. This woman is a SCHOOLTEACHER! But she paid four figures to see her favorite act, and she's not the only one! The dirty little secret is it's the fans who are paying outrageous sums for tickets, they want to be inside the building just that much. Which is why ticket prices are so high. Because if they're priced so the prognosticators won't bitch, the scalpers buy the ducats and then resell them at a huge markup, with the act getting none of this money. But you've got to blame somebody, and for some reason it's always Ticketmaster. Which may not be perfect, but... In most cases fans are missing the point, as are reporters who delve into this field only occasionally. The bottom line is fans have unlimited cash for the acts they want to see. Period. And no one is forcing them to see acts they don't want to, usually the price doesn't even matter. Either you want to go or you don't. The promoter can drop the price and very few are incentivized to buy. So, will this be a good summer for the concert business? Well, what about the stock market, which keeps going up despite the war in Iran and high gas prices... And the truth is most of the value run-up is a result of AI investment, and so far return has been underwhelming, so will there be a crash? You can make your own bet, buy stock or sell it or... But that would require a modicum of expertise. But when it comes to the show, everybody's an expert! But the dirty little secret is when it comes to so many shows, NO ONE knows exactly what the demand is. You can go on a sellout arena tour and the next time around you can have trouble moving theatre tickets. So are people pinched such that they won't go to shows this summer? Or is the truth that when it comes down to desirable acts, fans will beg, borrow and steal to be there. This is the game concert promoters play. As for those who are not superstars... The truth is since recording revenue for acts that can sell a couple of thousand tickets is so low they tour constantly and come back to markets a few times a year and at what point do fans say it's not worth it? That's when price plays a factor. Post Malone selling stadiums this summer? I wouldn't have taken that bet. But a promoter did. What would you do? If it was your money? But you ask yourself the equivalent question all the time... What's it worth for you to be in the building... You might not think it's worth $200, but if you don't pay the freight, you won't be there. So you bitch and moan, but you open your wallet and go to the show. -- Visit the archive: http://lefsetz.com/wordpress/ -- Listen to the podcast: -iHeart: https://ihr.fm/2Gi5PFj -Apple: https://apple.co/2ndmpvp -- http://www.twitter.com/lefsetz -- If you would like to subscribe to the LefsetzLetter, http://www.lefsetz.com/lists/?p=subscribe&id=1 If you do not want to receive any more LefsetzLetters, http://lefsetz.com/lists/?p=unsubscribe&uid=0eecea7b60b461717065cbde887c8e25 To change your email address http://lefsetz.com/lists/?p=preferences&uid=0eecea7b60b461717065cbde887c8e25
