Business or music?

[isabelle_guns]

Before you guys attempt to shoot my head off...I am just throwing this question out there for the sake of discussion on a Saturday afternoon

Do you think that U2 are more concerned about selling t-shirts and merchandise and the general business aspect of it than the actual music since ticket prices are so high.

I was discussing this with my BF so I am going to remain neutral for the time being on this opinion and I am curious to know what you guys think.

 

[Popmartijn]

No, I think that U2 are very much interested in the music. They want to present it in the best way possible to their fans.
However, this will cost money, hence the ticket prices. In a way, I think that U2 don't want to do it again like the ZooTV tour. As great as that tour was, they only made profit because of the merchandising sales. They played to huge audiences, but barely broke even.So expensive was the whole setup they were touring with (the screens, the Trabbies, etc.).

So, I think their music comes first, but they don't want to lose money on it either.

C ya!

Marty

 

[isabelle_guns]

What was the merchandise for POP besides the "Snow Globe thingies" with the Lemon in them?

 

[Popmartijn]

I don't know exactly what they sold at Pop concerts, but I think it included T-shirts, tour books, those "snow globe thingies", Rubik Pop-cubes and condoms.

 

[STING2]

Before you guys attempt to shoot my head off...I am just throwing this question out there for the sake of discussion on a Saturday afternoon

Do you think that U2 are more concerned about selling t-shirts and merchandise and the general business aspect of it than the actual music since ticket prices are so high.

I was discussing this with my BF so I am going to remain neutral for the time being on this opinion and I am curious to know what you guys think.

The band want to produce the best work they possibly can and then share it with the largest audience possible. They have one of the highest royalty rates per album sold not because they want to rob their fans, but because if they are not willing to make that money, than the record company is going to make it.

This is the same with tickets. Tickets are priced, like the all other artist, based on "demand". The higher the demand there is for tickets based on the supply available, the more the price will increase. If U2 did not keep prices at the market level and began to sell them below market level, Ticket Brokers and Scalpers would scoop up the tickets and sell them for greater than market value. In such a situation, the fan pays even more for their ticket, and the Scalper and not U2 is making the profit.

Bottom line, if your not willing to make what you are worth, then someone else is going to. That is why U2 sells its tickets at market prices and it is the MARKET, not U2 that determines that price.

 

[Bonochick]

I don't know exactly what they sold at Pop concerts, but I think it included T-shirts, tour books, those "snow globe thingies", Rubik Pop-cubes and condoms.

Don't forget the inflatable lemons!

 

[isabelle_guns]

Don't forget the inflatable lemons!

I like those lemons...I saw some on e-bay, that would make a great ball to play with.

 

[SWlondnr]

U2 are very passionate, I think every artist needs to have a that passion in order to write a number 1. And get fans and the money, I think the fans and money is a gift and a curse from being passionate about music. But U2 have every other thing about their music, religion, politics, sex etc..

 

[NoControl]

Re: Re: Business or music?

Originally posted by STING2 This is the same with tickets. Tickets are priced, like the all other artist, based on "demand".The higher the demand there is for tickets based on the supply available, the more the price will increase.

That's not necessarily true. There's a certain greed factor that goes into working out ticket prices as well.

Originally posted by STING2 If U2 did not keep prices at the market level and began to sell them below market level, Ticket Brokers and Scalpers would scoop up the tickets and sell them for greater than market value. In such a situation, the fan pays even more for their ticket, and the Scalper and not U2 is making the profit.

That doesn't make too much sense. No matter how high prices will be ( well...as long as they can break even) scalpers will always be making a fortune regardless. And U2 will as well.

Originally posted by STING2 Bottom line, if your not willing to make what you are worth, then someone else is going to. That is why U2 sells its tickets at market prices and it is the MARKET, not U2 that determines that price.

I disagree. If you ask me, most of U2 prices are way too high and are not within the "market". They could be playing to many more thousands of people in each market if they had cheaper prices, period. Bottom line: The promoters (CC) and U2 decide on their ticket prices, not necessarily the "market".

 

[Popmartijn]

Re: Re: Re: Business or music?

I disagree. If you ask me, most of U2 prices are way too high and are not within the "market". They could be playing to many more thousands of people in each market if they had cheaper prices, period. Bottom line: The promoters (CC) and U2 decide on their ticket prices, not necessarily the "market".

Well, only a limited number of people can fit in an arena. By setting a lower price you still could not sell more tickets as there wasn't more supply. For the Elevation Tour U2 decided upon an arena tour. This limited the supply, thus increased the price.

C ya!

Marty

 

[NoControl]

Re: Re: Re: Re: Business or music?

Originally posted by Popmartijn Well, only a limited number of people can fit in an arena. By setting a lower price you still could not sell more tickets as there wasn't more supply. For the Elevation Tour U2 decided upon an arena tour. This limited the supply, thus increased the price.

C ya!

Marty

They didn't decide on an arena tour. They performed indoors again because they couldn't sellout stadiums (or even come close to selling out in many markets) any longer, at least in the North America. The arena tour chose them.

 

[gorman]

I think it's fair to say that U2 doesn't _need_ the money, and obviously could have retired by now. So no, I don't think they're doing this for the money or business aspects.

With that said, since they are doing it, they need to make it worth their while. Plus, there are a lot of costs involved, and a lot of people to pay. As a result, they need to maximize the revenues as much as they can. Just because they have very smart business senses doesn't mean they're trying to rip off their fans. Without financial success they wouldn't still be around. As with any good business, I'm sure they aim to increase their revenues with every tour. There are always more expenses as time goes on, and additionally, higher profits are a good determination of your success and popularity.

However, the ZooTV tour is a good example of how the art is most important. I remember reading that most shows were barely profitable, because the tour was so expensive to operate. Regardless of that, they did it because that was the show they wanted to put on. Hopefully they won't have that problem for the HTDAAB tour though.

 

[Popmartijn]

Re: Re: Re: Re: Re: Business or music?

They didn't decide on an arena tour. They performed indoors again because they couldn't sellout stadiums (or even come close to selling out in many markets) any longer, at least in the North America. The arena tour chose them.

This contrasts with your previous statement, where you said that U2 could've sold thousands of tickets more by setting a lower ticket price. As they had a sold-out arena tour this would've implied they'd go into stadiums. However, now you're saying that they couldn't sell out stadiums. So the decision to go into arenas and sell them out with the ticket structure they used was the correct one.

C ya!

Marty

 

[NoControl]

Re: Re: Re: Re: Re: Re: Business or music?

Originally posted by Popmartijn This contrasts with your previous statement, where you said that U2 could've sold thousands of tickets more by setting a lower ticket price.

I meant they couldn't sellout the majority of stadiums in North America with the prices they currently have, that's why they're in arenas in North America and why the arena tour chose them.

Originally posted by Popmartijn As they had a sold-out arena tour this would've implied they'd go into stadiums. However, now you're saying that they couldn't sell out stadiums. So the decision to go into arenas and sell them out with the ticket structure they used was the correct one.

It's not entirely true that the Elevation tour was sold out. There were 6 shows that didn't sellout and many other shows in North America that crawled their way to sellouts. And apart from their major markets (Chicago, New York, Boston, etc.), it doesn't necessarily imply (at least to me) that they could play stadiums in North America.

 

[mikeuk]

all very interesting, but the FACT is that (after Zoo) U2 wanted a decent return on touring - not unreasonably IMO. That's when they agreed `deals' with promoters - who guaranteed a certain level of income to U2, based on certain venues 7 number of shows. Of course as part of such negotiations U2 would want to be satisfied that ticket prices would not be pitched too high- recent history shows that Madonna has struggled to sell out indoor concerts ar £100+ per show.

I believe it is clear that Europe could (and probably will) support outdoor shows, as will probably be the case in South America & Australasia. Very few acts completely sell- out outdoor shows in the US e.g. Bruce Springsteen, but U2 would sell out in major cities.

Mike

 

[NoControl]

Originally posted by mikeuk all very interesting, but the FACT is that (after Zoo) U2 wanted a decent return on touring - not unreasonably IMO. That's when they agreed `deals' with promoters - who guaranteed a certain level of income to U2, based on certain venues 7 number of shows. Of course as part of such negotiations U2 would want to be satisfied that ticket prices would not be pitched too high- recent history shows that Madonna has struggled to sell out indoor concerts ar £100+ per show.

I believe it is clear that Europe could (and probably will) support outdoor shows, as will probably be the case in South America & Australasia. Very few acts completely sell- out outdoor shows in the US e.g. Bruce Springsteen, but U2 would sell out in major cities.

Mike

True but as for Madonna, to my knowledge every show on her Re-Invention tour this year sold out except her Slane Castle show.

 

[u2ulysses]

Sting2 has all the tour info., but if I recall, U2 sold out every show on the Elevation tour.

I agree, U2 cannot do stadium tours across the whole U.S. But even in the heyday of the JT era U2 had trouble selling out every stadium. Furthermore, this is also true for Springsteen and the Stones!! So don't let some lower sales in select cities on what ultimately proved to be a less popular album ("Pop") dictate that U2 can't do stadiums. They sold out 2 stadiums - forcing a third - in Chicago in '97 (for the supposedly unpopular PopMart tour). If U2 wanted to do a stadium tour, they could. They would just have to select the cities better.

For the ZOO TV tour, U2 started out with arenas as they weren't sure of the economy (i.e., would enough people spend $ to see them in a poor economy). After the ZOO TV arena tour did incredibly well, they then switched to stadiums and outdoor venues in certain areas in the U.S. I felt they could have easily done this with the Elevation tour as well. U2 sold out 4 shows in Boston and Chicago and could have easily had 2 or more shows! This strongly suggests that stadium shows could have been done.

As for ticket prices... I do think some were high (like the "Golden Circle" seats). However, also note that the "best seats" in the house were just $45 (the tickets for getting "into the heart"). Furthermore, I think 3/4 of each arena was $85 or less. Now compare this to artists like the Bee Gees, who were charging $300 for top tickets in '97!! Madonna's recent tour also was charging $300 for some tickets and her "cheap seats" were still $100.

In other words, U2 was BELOW the market, IMO - especially considering their status. And they could do stadiums in certain cities/markets, but clearly not the whole U.S. By going to arenas, U2 were able to easily sell out each show definitely giving the impression of a "hot tour" - which is what any artist wants. In contrast, even though PopMart sold far more tickets, as U2 didn't sell out every single stadium, it gave the impression of an unsuccessful tour. This is highly erroneous. Which is better? To sell out an 17,000 seat arena or sell 40,000 tickets out of 50,000 in a stadium? Clearly the latter, but the former gives the impression of a "hot tour" as it's sold out. Hence the need for arenas. But did arenas "choose" them as you say? I think marketing of the tour dictates that arenas are the way to go - then expand to stadiums for areas where demand is high.

 

[NoControl]

I'm not saying which is better or is best to do. All I am saying is that U2 can't fill stadiums in North America apart from major markets (Chicago, NYC, Boston and very few other cities) unless they lower their ticket prices. Pure and simple.

 

[STING2]

Re: Re: Re: Business or music?

That's not necessarily true. There's a certain greed factor that goes into working out ticket prices as well.




That doesn't make too much sense. No matter how high prices will be ( well...as long as they can break even) scalpers will always be making a fortune regardless. And U2 will as well.




I disagree. If you ask me, most of U2 prices are way too high and are not within the "market". They could be playing to many more thousands of people in each market if they had cheaper prices, period. Bottom line: The promoters (CC) and U2 decide on their ticket prices, not necessarily the "market".

The best way to make the most money is to price tickets according to the market. Price them to cheap and yes, lots of fans will come, but the artist will not be making as a high a gross as they could. Make the tickets to expensive and not enough people will come to pay for the cost of the show.

Regardless with what your selling, you want to sell at market prices because this ensure's the best average amount of gross per show.

The whole greed factor is a myth. This is business and economics and not a single fan has to show up to the show if they feel it is to expensive and this summer, that is what happened in the concert industry.

False! Scalpers were selling POPMART tickets for 1/2 of list price in many cities where the stadium shows did not sellout. I see this all the time at every level of the concert industry. When concerts do not sellout and Scalpers still have tickets, they lose money.

If Prices are priced correctly are above market value, it can make it difficult for scalpers to make a profit on such tickets even if shows sellout as compared to shows where tickets are underpriced, and the Scalper can easily make a killing.

The fact of the matter is, if your not willing to make what your worth, someone else is going to.

 

[STING2]

Re: Re: Re: Re: Re: Business or music?

They didn't decide on an arena tour. They performed indoors again because they couldn't sellout stadiums (or even come close to selling out in many markets) any longer, at least in the North America. The arena tour chose them.

That is incorrect, the band could have easily done another POPMART tour if they had chosen despite the potentially lighter attendence. The decision was the bands though as the elected to play arena's even in markets where they could still sellout multiple nights at the stadium level.

 

[STING2]

Re: Re: Re: Re: Re: Re: Re: Business or music?

I meant they couldn't sellout the majority of stadiums in North America with the prices they currently have, that's why they're in arenas in North America and why the arena tour chose them.




It's not entirely true that the Elevation tour was sold out. There were 6 shows that didn't sellout and many other shows in North America that crawled their way to sellouts. And apart from their major markets (Chicago, New York, Boston, etc.), it doesn't necessarily imply (at least to me) that they could play stadiums in North America.

If U2 had chosen a Stadium tour, the prices would have been reduced because of the additional supply of tickets in each venue. The pricing is based on the number of tickets that are going to be put on sale. If U2 had decided to play 3,000 seat theaters, the price of tickets would have doubled or trippled. The price is based on demand which goes up if the number of tickets that are available in each market is smaller, which is what happened on the Elevation tour with shows being in smaller Arena's. A preview of this fact was on the POPMART tour where U2 actually played on arena sized show in Perth Ausrtralia and the ticket prices were double of Stadium prices on the same tour. When supply is reduced, demand increases which increases price. Economics 101.

The elevation tour was a complete sellout as defined by the industry because every ticket that was printed was sold. Yes, not every Arena's full capacity was used, but that is not uncommon and selling behind the stage seats in small markets at very high prices can be difficult even for major artist.

The Arena shows that crawled their way to sellouts were perfectly priced from business perspective. This happened in markets where U2 was only playing one show and usually involved behind the stage seats or 85 dollar nose bleeds.

U2 played to large crowds in Stadiums on POPMART in

New York City 3
Chicago 3
Los Angeles 1
Philadelphia 1
Washington DC 1
San Francisco 2
Miami 1
Boston 2
Edmonton 2
Winnipeg 1
Toronto 2
Montreal 1

Regardless of U2's popularity at any given time, the band can go into these cities and successfully play stadiums in North America. On ATYCLB/Elevation, U2's popularity had a big boost! The album sold over 4.2 million copies in the United States and a total of 12 million worldwide. This doubled the sales of POP worldwide and nearly tripled the sales of POP in the United States.

U2 grossed 109 million dollars in North America on the tour there making it the 2nd highest grossing tour ever in a single Calendar year, in North America. That type of success at those ticket prices in addition to the album selling success shows that U2 would have had an easier time on a Stadium tour at POPMART inflation adjusted prices. I'd say U2 increased their concert drawing power for a hypothetical stadium tour during this time by 50%. U2's concert drawing power on POPMART in North America was around 50% of what it had been on ZOO TV. Thus ATYCLB album and Elevation brought U2 up to roughly 75% of where they had been on ZOO TV for drawing power on a hypothetical stadium tour at stadium prices, during that time.

Where U2 is now with this knew album coming out is not fully known, but they are probably around where they left off from Elevation in Terms of hypothetical drawing power for a Stadium tour in North America. At worst, they are not as far down the ladder as they were for POPMART in North America. That being said, because it is difficult to guage, and the image of success is easier to create with soldout arena's instead of 75% filled Stadiums, I think U2 will probably stay indoors in North America for the tour next year, although I think it would be nice to see them play outdoors where the market will sufficiently support a stadium show (at least 40,000 plus). Stadium shows will have lower ticket prices which is great for many fans. Arena shows with the reduced supply of tickets forces the price upwards.

From what I have seen though, they will be playing outdoors in Europe.

 

[STING2]

all very interesting, but the FACT is that (after Zoo) U2 wanted a decent return on touring - not unreasonably IMO. That's when they agreed `deals' with promoters - who guaranteed a certain level of income to U2, based on certain venues 7 number of shows. Of course as part of such negotiations U2 would want to be satisfied that ticket prices would not be pitched too high- recent history shows that Madonna has struggled to sell out indoor concerts ar £100+ per show.

I believe it is clear that Europe could (and probably will) support outdoor shows, as will probably be the case in South America & Australasia. Very few acts completely sell- out outdoor shows in the US e.g. Bruce Springsteen, but U2 would sell out in major cities.

Mike

Bruce Springsteen sells out outdoor shows primarily in the North East. He has had several Arena shows in the southern United States that have failed to sellout at reduced capacity. After last summer, its clear Springsteen owns New York City though.

 

[STING2]

True but as for Madonna, to my knowledge every show on her Re-Invention tour this year sold out except her Slane Castle show.

Madonna plays fewer shows and does not use behind the stage seating, at least in the US Markets.

 

[STING2]

I'm not saying which is better or is best to do. All I am saying is that U2 can't fill stadiums in North America apart from major markets (Chicago, NYC, Boston and very few other cities) unless they lower their ticket prices. Pure and simple.

Ticket prices are lower for Stadium shows period because of the larger number of seats available.

U2 are as good as gold for Stadiums in these markets even if demand is as low as POPMART.

New York City 3
Chicago 3
Los Angeles 1
Philadelphia 1
Washington DC 1
San Francisco 2
Miami 1
Boston 2
Edmonton 2
Winnipeg 1
Toronto 2
Montreal 1

ATYCLB album and Elevation with its much higher ticket prices and multiple sellouts showed that demand for hypothetical stadium tour at stadium prices would have done better than POPMART and most likely 50% better. Not back to ZOO TV levels yet, but indeed up significantly. If the new album really takes off, you could see U2 get back to that level, but I predict mostly an Arena tour for North America with potentially a some stadiums in the big markets above, and then the band going outdoors in Europe.

 

[NoControl]

Re: Re: Re: Re: Business or music?

Originally posted by STING2 The whole greed factor is a myth. This is business and economics and not a single fan has to show up to the show if they feel it is to expensive and this summer, that is what happened in the concert industry.

It's not a myth, it's reality. How can you possible justify selling tickets for over $100 and tell me that it's not being greedy is beyond me. And your above statement is why I've lost respect for U2. Music shouldn't just be for the wealthy. And if you think that way, then you're quite sad.

Originally posted by STING2 False! Scalpers were selling POPMART tickets for 1/2 of list price in many cities where the stadium shows did not sellout. I see this all the time at every level of the concert industry. When concerts do not sellout and Scalpers still have tickets, they lose money.

With tours of this magnitude, that's a rare exception.

Originally posted by STING2 If Prices are priced correctly are above market value, it can make it difficult for scalpers to make a profit on such tickets even if shows sellout as compared to shows where tickets are underpriced, and the Scalper can easily make a killing.

I don't agree. You're generalizing.

Originally posted by STING2 The fact of the matter is, if your not willing to make what your worth, someone else is going to.

Once again, that's BS.

 

[NoControl]

Re: Re: Re: Re: Re: Re: Business or music?

Originally posted by STING2 That is incorrect, the band could have easily done another POPMART tour if they had chosen despite the potentially lighter attendence. The decision was the bands though as the elected to play arena's even in markets where they could still sellout multiple nights at the stadium level.

Apart from their major markets, that's not true at all. Because if they would've toured stadiums in North America on the Elevation tour, most stadiums would've been half full. And that's why they didn't do stadiums in 2001. We both know that, so I don't have a clue as to what you're on about?

 

[NoControl]

Re: Re: Re: Re: Re: Re: Re: Re: Business or music?

If U2 had chosen a Stadium tour, the prices would have been reduced because of the additional supply of tickets in each venue. The pricing is based on the number of tickets that are going to be put on sale. If U2 had decided to play 3,000 seat theaters, the price of tickets would have doubled or trippled. The price is based on demand which goes up if the number of tickets that are available in each market is smaller, which is what happened on the Elevation tour with shows being in smaller Arena's. A preview of this fact was on the POPMART tour where U2 actually played on arena sized show in Perth Ausrtralia and the ticket prices were double of Stadium prices on the same tour. When supply is reduced, demand increases which increases price. Economics 101.

I know that. And that's what I'm saying. You've just chosen the less concise route of explaining that.

Originally posted by STING2 The elevation tour was a complete sellout as defined by the industry because every ticket that was printed was sold. Yes, not every Arena's full capacity was used, but that is not uncommon and selling behind the stage seats in small markets at very high prices can be difficult even for major artist.

Wrong, U2 reduced the capacity AFTER they discovered that they couldn't sell out these markets. How many times do I have to tell you that? 6 shows DID NOT sellout.