DISPATCHES FROM THE RETURN TO NORMALCY: Even With Sold-Out Concerts, No-Shows Are a Big Problem for Venues.
The concert industry was expecting a full-scale recovery in 2022, but persistent fears about COVID-19 have led to high no-show rates that disproportionately impact venues. So while live music may be back across the county, low attendance still has many venues hurting.
Prior to the pandemic, the average no-show rate — meaning the percentage of ticket buyers who don’t attend an event — averaged around 5%. But now, “sagging consumer confidence is causing national no-show rates as high as 50%,” Raeanne Presley, former mayor of Branson, Mo., and co-owner of the city’s Presley’s Theater, told the House of Representatives Small Business Committee during a Jan. 18 hearing. This is having a “devastating” impact, said Presley, who serves on the board of directors for her local chapter of the National Independent Venue Association, “because most of our venue members rely on in-house spending to pay core bills.”
More than any other sector of the touring industry, venues bear the brunt of high no-show rates because of how they make money from concerts. Artists and promoters generate the bulk of their income before the performance from advance ticket sales. After production costs are deducted, the artist and promoter split the ticket revenue; the artist typically receives 85%, and the promoter gets the remaining 15%. Artists also profit from merchandise sales, of which they often must pay a 5% to 20% cut to the venue. On average, an artist will make at least 85% of their concert revenue from tickets and the rest from merch. While high no-show rates do negatively affect merch sales, most artists and promoters go into a concert knowing how much they will make each night. (For smaller shows, the venue typically acts as the promoter as well.)
It’s the opposite for venues, which often make at least 65% of their revenue during the concert from food and beverage sales, parking and their cut of merch sales. The remainder of their income generally comes from fees attached to tickets, rent charged to the promoter or artist and sponsorship money. That reliance on in-person spending leaves venues far more vulnerable. According to Billboard’s own analysis, a 5% drop in attendance equals a 7% drop in revenue for a venue, but only a .4% drop for artists.
Hopefully the massive no-shows at concerts will begin to dwindle, given we spent the fall and winter watching sold-out college and pro football games and other sporting events throughout the US without a comparative spike in COVID numbers, and especially since: The Omicron Wave Subsides.