Pollstar Live! Coverage: Finding Alternative Revenue Streams For Artists

– Pollstar Live! 2018
Finding alternative revenue models for artists

On day two of Pollstar Live!, Stephen Duval (23 Capital), David Marcus (Ticketmaster), Natalia Nastaskin (UTA), Carmen Romano (Flood Bumstead McCready & McCarthy), Rit Venerus (Cal. Financial Group), Lillian Williams (O’Neil Hagaman) and host Peter Luukko (Arena Alliance) explored ways of making artists money outside traditional revenue streams.

Part of a business manager’s job in the context of live entertainment is figuring out creative marketing plans that can help make more money on tour, be it through VIP packages, pop ups or meet and greets. “In this day and age, any member of an artist’s team is responsible to enhance whatever it is the artist may want to do. The artist is the CEO, and we are there to help to plan deals, particularly when it comes to touring and tour sponsorships,” said Nastaskin.

Everybody on the panel loved VIP tickets, as they are usually created outside the promoter deal, meaning artists earn a substantial amount from their sales. According to Venerus, it was no longer uncool to do VIP. Most panelists preferred VIP tickets to, say, bundling a ticket with an artist’s current album, be it digital or physical. In some cases, ticket sales may help propel an album to number one in the charts, but the financial benefit to the artist was negligible or at least highly dependent on the record deal. “It may help drive ticket sales, because fans perceive it as value,” said Venerus.

Marcus recapped Ticketmaster’s Verified Fan program, which made controversial headlines during the latest Taylor Swift tour. Buying Swift’s records, watching her videos, tweeting or messaging about her on Facebook and all sorts of fan activity – some commercial, some not, but all tied to the artist – moved fans up the waiting list for tickets.

Another way of making money is to first borrow some and invest it. Duval’s company provides finances to live entertainment professionals such as promoters and venue operators, but also to artists directly, in order to enable them to realize their commercial endeavors. “Not everyone wants to take a big advance from Live Nation or AEG,” he explained. “So we’ll come in and look at probably between 15 and 20 data points: who the artist is, how they’re performing in the charts, what their heritage performance looks like, we look at Pollstar data. You assess that with the merch and ticket numbers, what the capacity has been historically.

“And then it’s just a financial structure, where you put some financial funds in, according to the way you’ve structured it against those line items that the production of the tour needs. And as the money comes in from box office, from merch, from sponsorships, it comes back through a collections facility, and we just get paid [from that].”

The importance of data cannot be forgotten, when talking about finding new revenue streams. Duval and Nastaskin explained how drawing the right conclusions from the right types of data enabled artists to target their fans in a personalized manner, offering something very special to the most engaged fans. The question was no longer who owned the ticket, but how to unlock the data behind it, added Marcus. Companies are usually very protective about their data. His vision, however, doesn’t require them handing out their data to everyone, but merely allowing artists to exploit the data via a dedicated platform.

– Pollstar Live! 2018
Lillian Williams of O’Neil Hagaman

Just like in other industries, business management firms, like the ones Romano, Venerus and Williams work at, create targets and work with the artists, agents and managers to hit those targets. These targets can be tour revenues or merchandise income. “You want to be conservative with the numbers,“ said Williams. “We all hope it’ll rain diamonds, but it might not.”

“But the meeting goes easier if you tell them it’s going to rain diamonds,” joked Romano.

When speaking about increasing artists’ income, secondary ticketing invariably comes up. A large part of the industry believes the market proves that people are willing to pay a lot more for tickets than what artists, agents and promoters are asking for. Marcus, who refuses to call large-scale resellers brokers and insists on calling them scalpers, explained how Ticketmaster – for example through Ticketmaster Platinum – helped artists price the house right. “The existence of the secondary market is an indication that we’re doing a really poor job of understanding the value of the thing we sell,” he said, emphasizing that the industry lost several billion dollars because of it.

Luukko wanted to know whether selling memorabilia, which is done a lot in sports, could be an income stream for artists, and whether it was true that a lot of the merchandise sold online were forgeries. Nastaskin responded, “signed stuff and memorabilia have fallen by the wayside. It’s all about selfies, and they’re legit.”

Luukko closed by asking each panelist what constituted a good and a bad day for their respective businesses. Said Duval: “Building up this company, being able to be dealing with sports, music, entertainment, lifestyle sectors, just being able to release our product in the market is a good day for me. We’ve had a pretty explosive rise. We started with four people three years ago, we’re now 50 people worldwide. Because there’s no one else really doing the same thing we´re doing, we, luckily, have very few bad days.”

Marcus: “A good day for us is a thoughtful plan well executed, I think. We’re trying to be a lot more intentional about the way we distribute tickets, and that requires a lot of planning. When we plan well, and we execute, and we deliver for the artist and the fan it’s great. And a bad day is when shit goes haywire. Ticketing’s unfortunately still too complex. There’s all these bad guys out there, who are doing their best to screw it up at the expense of the fan and the artists. That’s just bad, because people are really emotional about live entertainment, about tickets, they love these artists. We’re in the way, by necessity. But when we’re in the way, and it’s our fault, that sucks.”

– Pollstar Live! 2018
UTA’s Natalia Nastaskin

Nastaskin: “A good day is when the tour sells out before it starts, all the VIP packages have sold out, and there’s a brand partnership relationship that has a tour sponsorship component in it, and that just got signed, there’s a synch that’s gone viral, every festival buyer’s calling wanting to buy the act for their festival, and the manager and the artist are both calling us and saying thanks. And a bad day is when the tour’s over and the manager and the artist call and say that the tour didn’t make any money at all.”

Romano: “I think a good day is when nothing out of the ordinary happens. The day goes along as planned. A bad day is when something really bad happens, and you get a phone call, ‘somebody just jumped off the cruise ship,’ and it just wreaks havoc on your day and you got to try and unwind it.”

Venerus: “A good day for me is getting to go to a show. Because, ultimately, how I got into this business was seeing that excitement and energy at a show. I’m sure there are bad days, but I tell everybody, it doesn’t feel like a job when you love what you do. And to be able to do this, it beats a real job any day. There really are no bad days.” (Romano: “Can I come work for you?”)

Williams: “I would say, a good day is when you help an artist achieve their goals, whether it’s a tour or buying a house or getting that car that they always wanted, and going to their shows are always positive. A bad day, for me, is when I feel like I have let them down in some way. Luckily, I don’t have very many of those days, but I get mad at myself if I don’t anticipate everything that could possibly go wrong.”