The Next Best Revenue Stream

We’ve heard it over and over again. The album is no longer a moneymaker. Music execs say live performance is the artist’s second largest revenue stream. But how lucrative is touring?

On November 19 I had the privilege of watching Bright Eyes perform at Radio City Music Hall. Mr. Connor Oberst performed with Sonic Youth founder, Thurston Moore, and The Felice Brothers. The event was sold out.

Which led me to wonder – how many dollars can a concert accrue? Let’s start with ticket sales. In a previous blog post, I mentioned that I had spent $95.48 on two tickets. This means each ticket cost $47.74. The Radio City Music Hall has 5,933 – all of which were filled. Multiply that number by the ticket cost to find the event’s gross revenue in ticket sales:

$283,241.42

Let’s assume the 39 city tour visited venues of equal size. Let’s also pretend that all seats were filled. That means the tour grossed over $11,046,415.38 in ticket sales alone. That’s a generous number. And that number doesn’t include parking, merchandise or concessions. It also doesn’t include costs associated with touring.

Bright Eyes belongs to Omaha-based Saddle Creek Records. Although the label is popular, it is still an independent label. This leads me to ask – Is $11 million in touring revenue a lot for an artist of this caliber? How profitable is touring for a lesser known artist, or, for that matter, a well-known one?

According to Billboard.com, the Rolling Stones were the top touring band in 2006. The band “reported $147.3 million in grosses from 45 shows in U.S arenas and international stadiums.”

Total domestic touring revenue was $3.1 billion for 2006, according to CNNMoney.com. Compare this figure to that of the Rolling Stones. One can assume that the top touring artists make up the largest percentage of the total figure. This leads me to wonder – what’s left for lesser known artists?

Not much.

I can’t help but conclude that touring isn’t as lucrative for smaller artists as music execs would like us to believe. Perhaps the next best stream will only benefit the next best thing.