Last October, during the CMJ Music Marathon in New York City, Arcade Fire played a pair of not-so-secret shows in Brooklyn under the pseudonym “The Reflektors,” the title of their new album. At a converted warehouse space that held about 3,000 people, tickets sold out instantly for the two shows and within minutes, tickets on StubHub ranged from $220 to $5,000.
Fast-forward a few months and for $22, you can see the band play at Philadelphia’s Wells Fargo Center thanks to a Groupon promotion, a more than 50 percent savings off “face value.” Similar promotions were done in other cities including Atlanta and St. Louis through Groupon’s new “Groupon Live” service.
This promotion clearly worked, as more than 1,000 tickets were sold through this promotion in Philly alone, with hundreds selling in St. Louis and Atlanta.
Recently, a horde of bloggers have taken to their Internet thrones and bashed this concept with headlines such as “Et tu Arcade Fire? Canadian indie darlings take to Groupon to fill Target Center” (The Star Tribune) and “Arcade Fire’s Groupon for the OPENING show of their tour should disgrace you all” (Louisville.com) takes a rather sensationalist look at an interesting problem: What do you do with empty seats?
Every major city worth its live music salt has a number of venues that can support newly touring bands, which holds between 500 and 1,000 people, and a theater that can hold somewhere between 1,000 and 3,000 people. That being said, typically the next step up is a 15,000-seat or larger theater. Without stating the obvious, that’s a pretty big jump.
Outdoor venues have considerably more flexibility in that regard, with the ability to just use the pavilion or have a capacity between 3,000 and 15,000. However, a band can’t play the Jay Pritzker Pavilion in Chicago’s Grant Park with its capacity of 11,000 people when it's February.
The conundrum bands face is: Do they play a half-empty arena or do they sell out a theater in seconds? If a band plays a half-empty arena, it looks bad if there are seats available for a fraction of face value on StubHub. A few years back, The Black Keys made this same jump, going from big theaters to playing arenas and when they came to New York’s Madison Square Garden, one could find a ticket for way more than 50 percent off through StubHub.
While in that case, the only people getting screwed are the fans who purchased tickets they couldn’t use, the band was not profiting on the secondary sale of the ticket. If they had adopted the same strategy Arcade Fire had done, where fans are still getting tickets for 50 to 60 percent off face value, they could have been the ones profiting off those sales of $20 tickets.
On the other side of the coin, if the band decided to play a theater and likely charge more—if the demand exceeds the supply, which in this case, we will say it does—you can run into another problem: Everyone else is making tons of money while you don’t.
As an example: In January, I saw Neil Young at Carnegie Hall in a room that holds about 2,800 people. In previous visits to New York City, he has played Madison Square Garden, which holds up to 20,000 people for concerts. Young sold out Madison Square Garden on a Tuesday night, so you can only imagine the kind of demand there was for a show at a theater barely more than 10 percent of the size. For this show, where I was sitting in the absolute last row of the theater, I paid $50. The people next to me, sporting a StubHub envelope, paid $548 for the pair of seats directly next to me.
While Neil Young doesn’t need that money, he is in a “damned if you do, damned if you don’t” situation. If he raises ticket prices on his own, fans and critics will blast him. If he keeps his ticket prices (relatively) down, scalpers will snatch them all up and resell them at market value.
To conclude, there is no right answer in this situation. One potential thing you could do is have a co-headlining tour with another band in a similar situation with a similar fan base, where you can play those arenas and do a better job filling them up without resorting to rampant discounting. Or, you can keep playing arenas by yourself with a random opening band and I, the fan who knows that Arcade Fire will never be able to sell out an American arena outside of a small handful of cities, will swoop in and grab cheap tickets.
Do you consider this a conundrum for bands? Send your opinion to Brian at weidy@wisc.edu
