HTT 610 Business of Events and Entertainment Running Notes PDF

HTT 610: Business of Events and Entertainment Running Notes October 7th: - Touring musicians - Promoting album sales - 70% of revenue comes from live performances and 30% comes from digital music sources - Make money -...

HTT 610: Business of Events and Entertainment Running Notes October 7th: - Touring musicians - Promoting album sales - 70% of revenue comes from live performances and 30% comes from digital music sources - Make money - Build a fan base - When to tour music - When the artists involved are available - When new recordings are released - When the artist is getting television or radio exposure - Touring comedians - Promote personal brand - Make money - Build fan base - Touring allows you to generate revenue from more markets and offset high fixed costs from show development - Building / monetizing fan base - Streamed movies or television shows - Streamed music listeners - Social media - Fan clubs - Touring constraints - Audience - when does core audience consume live entertainment - Venue - when is your ideal venue available - Artist/event experience - what is the nature of the availability - Touring issues  - Impact on the environment - Industry concentration - Equity diversity and inclusion - Insurance crisis - Project management - The process of organising and managing appropriate resources in a controlled and structured manner - Delivering clearly defined work to complete a project within the given scope, time, and cost constraints - Gatt charts - illustrates various tasks in time sequence order (task, time budget) - Run sheets - details timing for each element of the event on the day of execution - Floor plans and diagrams - where equipment or items are placed within the venue - Where to tour - Determine which markets to play - Anchor dates - important enough to market other dates near them (ex. Music festival and then concert in near by city) - Primary markets - big enough to attract the highest box office revenues - Based on popularity - Internationally versus domestically - Which venues will make the most revenue - Routing the tour - Share of events - Live concerts / music 54% - Sporting events (non-franchised) 20% - Theatre performances 15% - Open-air festivals (fairs and exhibitions) 10%  - Speeches 1% - Key stakeholders - Performers - Managers - Works for performer - Bookers - Sells artist to promoter, event, or venue - Concert promoters - National and international tour buyers - College buyers - Arena buyers - Performing arts buyers - Fair and festival buyers - Casino buyers - Promoters - Funds tour and buys the show & controls venues September 30th: - Operating leverage - High - Most or all costs are fixed and not changing with volume, once the show covers fixed costs it has reached break even - Theatre, live music, entertainment - Higher sensitivity to ticket sales - decline in attendance can lead to significant drop in profits - Price elasticity - Are people willing to pay higher prices? - Dynamic pricing - Increased price at increased demand - Ancillary revenue - merch sales, concessions, and sponsorships reduce reliance on ticket sales for profit - Normal - Operating costs rise when revenue rises - Grocery stores, retail, manufacturing - Hard vs soft ticketing - Hard ticketing - ticket sales are directly connected to the artist - Ex. headlining a concert or performance - Preferred because of direct revenue, risk mitigation, & control over fanbase - Performance measurement - sold out shows lead to higher future booking fees, merch sales, and future opportunities - Soft ticketing - ticket sales are not directly connected to the artist - Ex. festivals, charity events, opening acts - Selling tickets - Where does the money go? - Mostly to e-commerce and ticket sales - Advertising revenue, management services, food and merch, public and private contributions - Ticket type evolutions - Single event concerts - single seats, family packs, VIP  - Multi-event festivals - single seats, family packs, promotions, multi-day passes , VIP packs - Seasonal theatre or music - + group packages, season tickets - Increasing customer revenue - Increase purchase frequency - Increase purchase quantity - Increase price points - Reduce discounting tactics - Sell higher priced products instead September 23rd: - Broadway - 41 theatres with more than 500 seats each - In the last year broadway sold $1.54 billion in tickets and had ~12.3 million attendees - 3 companies own 95% (Shubert, Nederlander, & AGT) - 65% of Audience is not from New York City - 65% of Audience is female - Average age was 40.4 Years Old - 86% of audience completed a college/university degree & 43% completed a masters - Attend in pairs or small groups of family and friends - Average household income of Broadway theatre goer was $271,277 - Types of performing arts - Theatre non-profit - Commercial theatre - Highly centralised on broadway - Makes up 60% of gross in 2005 - 12 million tickets sold - Touring versions of shows can make up to 80% of sales - Orchestras - Over 1600 orchestras in the US - 26.5 million attendees - 4 major companies - Can take 200 professionals for one show alone - Opera - Over 100 companies presenting - 3.6 million attending the main seasons - Circus - Dance - Funding performing arts organisations  - Outside of commercial theatre like broadway, most of these organisations are non-profits - Government 10-30%, ticket income 30-50%, fundraising 10% - Intellectual property - 42% of your box office revenue is gone before operating and development costs - If a show makes money it is shared within creators and investors - Mounting costs - Production (mounting) costs are the expenses which exist even before the start of the show - Musicals - Large commercial shows can cost 17-23 million dollars even before the show is opened - Small shows 10 million dollars - Plays on broadway can cost 3.5-5 million dollars pre opening - If a show gets cancelled pre-production costs still need to be paid - Breakeven - Financial assumptions - Running costs of $100,000 per week - Average ticket price of $30 - Capacity for 500 seats - Assuming royalties are not scaled - 8 performances weekly - Breakeven at 83% sell through - Live music stakeholders - Performers - Musical artists are entrepreneurs - Higher self-employed rates than the rest of the population - Create licensable content to monetise it through publishing and live performances - Invest ‘sweat equity’ into their creations - Managers (~15% of artist income) - Manager is focused on shaping and maintaining the overall image and progression of the artist. - Managers usually take a percentage of the artist's income. This typically ranges between 10 to 20% and is usually 15% for indie artists in my experience - Bookers (~15% of gross) - ‘Booking agents’ & ‘talent agents’ - Work with artists to schedule concerts, tours, and in-person appearances, negotiate fees and contracts - Get paid through commissions and bonuses - Travel and accommodation arrangements - Standard commission is around ~15% - Top 5 agencies in the US make up half of major concert ticket sales - Promoters (can be ~20% of profit) - Organise concerts, tours, and festivals at their own expense and risk by selling tickets - Small local promoters who organise concerts in small venues - Regional promoters organising concerts in medium-sized venues - National/ International promoters who spread the risk of staging the show across multiple concerts in multiple markets - Event organisers and producers - Usually responsibility of the promoter but they can hire specialists to get it done  - Hire personnel (stagehands, mixers, sound engineers, lighting technicians, event staff, security), catering and lodging, negotiating with vendors and contractors, oversee set, costumes, sound systems, and lighting - Venues (10-30% revenue) - Supervises and coordinates fan experiences in the venue - Generate revenue from rent and ancillary revenue - Parking, food and beverage, ticketing fees, building fees - Performing arts vs live music - PA - In Canada most organisations are not for profit, driven by idealistic purposes like educational, social, political, and religious - LM - Mix of sole proprietors, contract producers, and commercial companies, driven by economic considerations - Event Math - Pre production - one time fixed expenses which are involved in developing an event - Production operating - keep the show running, can be fixed or variable - Variable - changes based on number of tickets sold or number of people attending an event - Fixed - costs that do not change September 16th: - Emotions that make up events - Joy, sadness, trust, disgust, surprise, anticipation, (fear & anger) - Entertainment mediums → physical locations and facilities → promotions → support agencies and organisations - Live nation can lose money on concert operations because they make it up in ticketing fees and sponsorships - Types of impacts - Social & Cultural - Physical & Environmental - Political & Legal - Economic & Tourism - Identify major impacts on host communities - Understand why governments get involved in events - Describe the use of economic impact studies - Ottawa Festival - Social & Cultural impacts - 16,000 volunteers - 4400 artists gaining exposure - Festivals aim to be accessible to all income levels - Giving tickets away to missions and group homes in order to include more people and offering free workshops for people who might not be able to afford them - Exposing people to new cultures and experiences - Offering free workshops - Business Model Canvas - Live events don’t solve a problem  Type of event Purpose of event Value Key resources Selling proposition tickets Risks & opportunities Financial matters - Producers - Creative / script - Budget - Contact sheet - Schedule - Contract September 14th: Impacts of events Social and Cultural Positive Negative - Shared experiences - Community alienation - Revitalising traditions - Negative community image - Building community pride - Bad behaviour - Increased community - Substance abuse participation - Social dislocation - Introducing new ideas - Loss of amenity - Expanding cultural perspectives Physical and Environmental Positive - Urban transformation and renewal - Showcasing the environment Negative - Providing examples for best - Environmental damage practices - Pollution - Increasing environmental - Destruction of heritage awareness - Noise disturbance - Infrastructure legacy - Traffic congestion - Improved transport and communications Tourism & Economic Positive Negative - Destination promotion and - Community resistance to tourism increased tourism - Loss of authenticity - Extended length of stay - Damage to reputation - Higher yield - Exploitation - Increased tax revenue - Inflated prices - Business opportunities - Opportunity costs - Commercial activity - Financial loss - Job creation Political Positive Negative - International prestige - Risk of event failure - Improved profile - Misallocation of funds - Promotion of investment - Lack of accountability - Social cohesion - Propagandizing - Development of administrative - Loss of community ownership skills and control - Legitimation of ideology September 11th: - Events - A thing of importance that happens - Planned public or social occasions - Entertainment - The action of providing or being provided with amusement or enjoyment - And event, performance, or activity designed to entertain others - Growth in events - Spending has increased 70% since the 80s - Youth would rather experiences that can be shared on socials - Events now make up 25% of organisations’ marketing budgets - Live events drive human connection and emotions - Events will grow at an average rate of 11% from 2021 to 2028 - Industry - A manufacturing activity as a whole - A distinct group of productive or profit-making enterprises - A department or branch of a craft, art, business, or manufacture especially one that employs a large personnel and capital especially in manufacturing - Systematic labour especially for some useful purpose of the creation of something of value - Live Nation - Largest producer of live concerts in the world - Ticketing: ticketmaster 580 million fans in 2019 - Concert production: 40,000 events, 90 million fans, 5000 artists - 320 venues - 100 managers providing services to 450 artists - Revenue streams - Audience and ticketing are everything - Merchandise - Sponsors - Exhibitor fees - Food & beverages - Government grants 1. How do performing arts and live music differ using the Live Event Business Canvas as a framework? The Live Event Business Canvas includes key elements such as Value Proposition, Customer Segments, Revenue Streams, Key Activities, and Cost Structure. Here's how performing arts and live music differ within this framework: Value Proposition: ○ Performing Arts: Typically focuses on storytelling, cultural enrichment, and artistic expression. The goal is often to engage audiences emotionally and intellectually through theatre, dance, or other art forms. ○ Live Music: The value is more often about the visceral and emotional experience. It’s centred around a direct connection between the artist and the audience, the energy of the crowd, and the atmosphere created by the music itself. Customer Segments: ○ Performing Arts: Attracts a more niche audience, often including patrons who have a deep appreciation for specific art forms and cultural experiences. These audiences may be more selective, value tradition, or be interested in highbrow cultural experiences. ○ Live Music: Appeals to a broader audience depending on the genre, from mainstream to subcultural crowds. It can include younger, more casual attendees looking for social and entertainment experiences. Revenue Streams:  ○ Performing Arts: Revenue might come from ticket sales, sponsorships, governmental grants, and donations. Performing arts companies may also rely heavily on subscriptions or memberships. ○ Live Music: Revenue primarily comes from ticket sales, merchandise, sponsorships, and concessions. Artists and venues often focus on maximising sales through high attendance and ancillary sales (food, drinks, etc.). Key Activities: ○ Performing Arts: Involves extensive rehearsals, intricate production designs, and often a longer running time (multiple performances of the same show). ○ Live Music: Less rehearsal time (especially for pop or rock genres) and typically shorter performances, but with extensive logistics, touring schedules, and more dynamic production elements (e.g., light shows, audio effects). Cost Structure: ○ Performing Arts: Often higher fixed costs due to the need for venues, set designs, costumes, and long rehearsal periods. Performances may be less frequent, so the cost per event can be higher. ○ Live Music: Costs are variable, with a significant focus on touring expenses, artist fees, and venue costs. The costs per event can be distributed over many shows during a tour. 2. How does high operating leverage for events impact ticket pricing? High operating leverage means that a large portion of an event's costs are fixed (e.g., venue rental, production costs, staff salaries), and these costs do not change significantly with the number of attendees. As a result, events with high operating leverage are under pressure to maximise attendance to spread these fixed costs over as many ticket sales as possible. Impact on ticket pricing: Events will often price tickets higher to ensure that they cover their fixed costs even if attendance is low. On the other hand, once  fixed costs are covered, any additional ticket sales contribute directly to profit, potentially incentivizing discounts or promotions to boost sales. 3. Why do artists prefer hard tickets? Artists prefer hard tickets (physical tickets) for several reasons: Tangible Connection: Hard tickets serve as memorabilia for fans and can enhance the experience. Artists may appreciate the lasting, physical bond that these tickets create between them and their audience. Scalping Control: Hard tickets can sometimes offer better control over ticket reselling or scalping compared to digital tickets, though this is changing with new digital technologies. Fan Interaction: Hard tickets, especially in limited editions, allow artists to create exclusive experiences. Fans who buy early or get special edition tickets feel a stronger connection with the artist. 4. Identify and explain three tour availabilities Tour availability refers to factors that influence whether an artist can perform at a given time and location: 1. Venue Availability: Tour dates are often dictated by when venues are available. Large venues can be booked months or even years in advance, so artists need to plan around these schedules. 2. Artist's Schedule: The artist's personal and professional schedule (including other commitments like recording, media appearances, or family time) plays a significant role in determining availability. 3. Market Demand and Timing: Tours are often scheduled around the demand in specific cities or regions. Artists may prioritise markets where they have strong fan bases or where festivals or local events are occurring that can boost attendance. Summary of Live Music Stakeholders 1. Performers: ○ Role: Musical artists who act as entrepreneurs by creating and monetizing their content through publishing and live performances. They invest significant personal effort (“sweat equity”) into their work. ○ Income: Primarily self-employed, they earn income from live performances and licensing their music. 2. Managers: ○ Role: Professionals who shape and maintain the artist's image and career progression. They play a crucial role in guiding the artist’s decisions and branding. ○ Income: They typically earn around 15% of the artist's income, which may range from 10% to 20% depending on the agreement. 3. Bookers: ○ Role: Also known as booking or talent agents, they are responsible for scheduling concerts, negotiating fees, and making travel arrangements for artists. ○ Income: They earn approximately 15% of the gross revenue from the concerts they book, typically through commissions and bonuses. 4. Promoters: ○ Role: Individuals or organisations that organise concerts, tours, and festivals at their own risk. They sell tickets and bear the financial burden of staging events. ○ Income: They can earn around 20% of the profits from the events they promote. Promoters vary in scale from local to international. 5. Event Organisers and Producers:  ○ Role: Responsible for executing the logistics of events, including hiring personnel (e.g., sound engineers, security) and managing various aspects of the production. ○ Income: Their compensation often comes from the promoter’s budget, and they may work on a fee or salary basis depending on the project. 6. Venues: ○ Role: Facilities that host live events, overseeing fan experiences and ensuring the event runs smoothly. They manage logistics and fan engagement on-site. ○ Income: Venues generate revenue through ticket sales, rent, and ancillary services (e.g., food and beverage, parking). Differences Between Stakeholders Focus and Expertise: ○ Performers are primarily creators, focusing on artistry and content. ○ Managers specialise in strategic career development and branding. ○ Bookers handle scheduling and contractual negotiations, connecting artists with performance opportunities. ○ Promoters take on financial risks, organising events and managing ticket sales. ○ Event Organisers/Producers focus on the logistical execution of events. ○ Venues provide the physical space and manage the audience experience. Income Structure: ○ Performers earn through live performances and licensing, while managers and bookers earn commissions from the artists’ income.  ○ Promoters and event organisers depend on profit-sharing or fees based on the success of the events they manage. ○ Venues receive revenue from multiple streams, including ticket sales and concessions. Risk and Responsibility: ○ Performers invest personal effort but bear less financial risk compared to promoters, who risk their investment in organising events. ○ Managers and bookers are more focused on long-term career success rather than immediate financial risks. Scale of Operation: ○ Local promoters may work within their communities, while national/international promoters operate on a larger scale, spreading risks across multiple markets. ○ Venues can vary significantly in size and capacity, affecting their revenue potential and audience engagement strategies.