The High Cost of Live Music
Why are major concerts so expensive, and what can musicians do about it?
Can I ask you a question? Did you ever try to buy tickets to a Taylor Swift concert?
(If you didn’t get the reference, don’t worry about it.)
Swift’s upcoming Eras Tour is poised to crush various concert-going records, with the artist taking the stage 35 times across 20 football stadiums over five months. Tickets, as you might imagine, will not be easy to come by — devoted Swifties have already taken to gatekeeping on social media in an effort to crawl infinitesimally higher in the virtual queue to buy tickets. Swift said in a press release that tickets would be on sale for between $49 and $449, but the price on the secondary market is sure to be much greater.
Given that Swift is one of (if not the) top pop star of the last decade-plus, it isn’t surprising that her first tour in five years faces overwhelming demand (the tour will probably sell close to 2 million tickets, enough to seat over half a percent of the US population, and that still won’t be enough). But she is not alone at the top of the music world — Bruce Springsteen recently drew ire for four-digit ticket prices, and Olivia Rodrigo had to publicly apologize for not booking larger venues during her Sour tour.
So why has demand to see top musical artists exploded, and is there anything they can do about it?
‘Don’t Blame Me’
Taylor Swift undoubtedly makes popular music, but her rise in the music industry has also coincided with several industry-wide trends that have seen mega-stars entrench their status — call it the “Moneyball”-ification of music. Since 1991, when Billboard updated their chart methodology to incorporate actual sales figures, pop and hip-hop have dominated the charts and top songs have charted for longer (case-in-point, Swift became the first artist to ever hold all 10 spots on the Billboard Hot 100.) There’s even evidence to suggest music has increased in “sameness” over time (yes, Swift writes all her songs, but often works with producers who have their fingerprints all over the industry.)
The industry convergence on megahits and superstars has been accelerated by the digital streaming era, where trends and listenership can be tracked in real time and music execs can harness data to engineer chart-topping singles (Spotify: this is why we can’t have nice things.) The most popular artists have gotten more popular than ever in an era where their music is more accessible than ever. It’s no wonder at all that so many want to see Swift perform live.
But when it comes time to go on tour, all of these music industry trends collide with a very boring piece of economic theory known as Baumol’s Cost Disease. Two economists, William Baumol and William G. Bowen, observed that the average wage earned by a string quartet performing a given piece of music has risen steadily over time, even though the number of people or the amount of time required to play that music hasn’t changed at all since it was written. The musicians are earning more money even though they are no more productive!
There is only one Taylor Swift, and she can only perform in one place at one time. The supply of seeing Swift perform live is extremely constrained, and so any increase in demand is met by a skyrocketing price.
‘this is me trying’
We can’t increase the absolute supply of Taylor Swift, but there are ways we can make her more efficient. Looking at Swift’s tour schedule, that she’s only playing on weekends quickly sticks out. This is in part because weekend events sell better and are more convenient for fans and because Swift wants some time off in her schedule — but it’s also because the tour will probably involve a very large and complex set that takes a long time (and many people) to break down, move, and set up again. What if, instead of moving Taylor Swift and her set around the country, we brought the country to Taylor Swift?
Residencies are nothing new in music, and have seen something of a comeback recently: Swift ex Harry Styles has been doing a quasi-residency in five cities across North America, and Adele is set to begin a residency in Vegas later this year. The advantages are clear, with the travel schedule being less arduous for the artist and their staging being far more efficient. Musical performers in residence can minimize their time spent doing other things and maximize their time spent performing, squeezing out additional supply where there was none before. Travel becomes an additional cost for the fan, but given Swift is already skipping many major cities for Eras this is an expense most concertgoers will be incurring anyway.
In addition to residencies Swift might also consider playing more festivals, which she has typically eschewed on her US tours. Festivals occur on a slower cadence than residencies, with artists typically only performing once during a weekend, but can accommodate more people than even the largest football stadiums.[1] Festivals are also more consumer-friendly, bundling the cost of megastars like Swift with many other artists of lesser renown and providing more value to the concertgoer.
Swift combined these two concepts when she announced her 2020 Lover tour, where she was set to headline one weekend in Foxborough, MA and another in Inglewood, CA, but due to COVID that tour was ultimately canceled.
‘I Wish You Would’
I don’t expect Swift to follow my advice; she’s popular enough to design exactly the kind of tour she wants and I have no doubt that every single bit of Eras is intentional. But I’m heartened to see artists like Styles and Adele try something different, and I hope other top-tier musicians will follow their lead. As the upper echelon of pop music continues to consolidate megastars will only get more popular and their concert tickets more expensive.
For now we’ll just have to put up with the Ticketmaster monopoly and hope for the best available seats. And if you’re looking to get Eras tickets, DO NOT DO NOT do not sign up for verified fans! No matter what you do! Wait until after general sale, the tickets will be the cheapest![2]
- Most football stadiums set up for a concert can seat 50–60,000 people. Annual attendance at the Bonnaroo festival is around 80,000, and Lollapalooza is up to 100,000.
- This is a joke.
