The Art and Business of Pofiting from Live Tours

In the music industry, live touring is one revenue stream that stands out as a consistent and lucrative source for artists. After 25 years of working as a booking agent in Los Angeles, I can attest that touring is a cornerstone for artists to connect with fans and generate substantial profits.

A strong market presence allows artists to negotiate favorable deals with venues and secure strategic partnerships, creating a symbiotic relationship between market dominance and the profitability of live tours. 

Last week, I discussed how artists with a significant market share have a dedicated following and a broader reach, attracting sponsors and endorsement opportunities that further contribute to tour revenue. It plays a crucial role in influencing tour profit for artists. 

A higher market share often indicates a more extensive fan base and increased demand for an artist's music, translating into more ticket sales and higher attendance at live performances. 

In this blog post, I will demonstrate how artists profit through live touring, supported by real-life examples from some of the industry's biggest names.

Touring can be a lucrative revenue stream for musicians, often considered one of the primary ways they make money. Concerts and live performances provide direct income through ticket sales and offer opportunities for merchandise sales. Additionally, touring allows artists to connect with their fan base, build a dedicated following, and enhance their visibility in the music industry. 

While revenue from recorded music has declined in the digital age, successful tours can substantially contribute to a musician's overall income, making touring a crucial component of their financial success. However, the effectiveness of touring as a revenue source can vary depending on the artist's popularity, the size of their audience, and the efficiency of their management and business strategies.

Ticket Sales

The most direct source of revenue from live touring comes from ticket sales. Artists can command ticket prices based on venue size, artist popularity, and demand. Selling tickets to live performances is the primary and most direct way for artists to generate income during a tour, becoming a primary revenue source.

Taylor Swift's "1989 World Tour" grossed over $250 million from ticket sales in 2015. Swift strategically priced tickets based on demand, venue size, and seat location, showcasing how a well-managed ticketing strategy can generate significant revenue.

Artists often implement tiered pricing based on seat location, proximity to the stage, and overall ticket demand. However, some artists implement strategies to combat ticket scalping, ensuring that more revenue goes directly to them rather than secondary market sellers, such as StubHub or SeatGeek.

Merchandising

Concert merchandising has evolved beyond just T-shirts and posters. Artists now offer a wide range of merchandise, including exclusive tour apparel, accessories, and even limited-edition collectibles. 

Travis Scott's "ASTROWORLD: WISH YOU WERE HERE" tour 2019 featured extensive merchandise, including limited-edition items. The tour's success was measured by ticket sales and the frenzy around exclusive merchandise, contributing substantially to overall revenue, which, according to Complex, made $34.3 million in the first three months.

Beyond traditional T-shirts and posters, artists offer a diverse range of merchandise, including exclusive tour apparel, accessories, and even specialty items like vinyl records or unique collectibles. Limited-edition items create a sense of exclusivity, driving fans to purchase merchandise during or after the show.

Sponsorship and Endorsements

Securing sponsorships and endorsements is another avenue for artists to boost their earnings during live tours. Brands often collaborate with artists to promote their products or services at concerts. 

Beyoncé's "Formation World Tour" saw strategic collaborations with brands like Pepsi. The partnership extended beyond traditional sponsorships, integrating the brand into the tour's promotion, which Billboard reported earning $123 million in 2016. 

Artists collaborate with brands for sponsorships and endorsements, showcasing products or services during performances. From stage setups to digital integrations, brands find creative ways to align themselves with the artist's image and connect with the fan base.

VIP Experiences and Upgrades

Many artists offer VIP packages that provide fans with exclusive experiences, such as meet-and-greets, backstage access, or premium seating. These VIP upgrades come at a premium price, contributing significantly to the tour revenue. 

Justin Bieber's "Purpose World Tour" incorporated VIP experiences, allowing fans to purchase premium backstage access and meet-and-greet packages. Touring Data reports Bieber made over $250 million in his 2017 tour. The additional revenue generated from these exclusive offerings contributed to the tour's profitability.

Fans are willing to pay a premium for these exclusive opportunities, contributing significantly to the tour revenue.

Streaming and Recording

Live recordings and streaming of concerts have become additional revenue streams for artists. Platforms like YouTube, Spotify, and Apple Music allow artists to monetize their live performances. 

Ed Sheeran's "Divide Tour" drew massive crowds and capitalized on the demand for live recordings in 2019. Sheeran released live versions of his performances on streaming platforms, creating an additional revenue stream from fans who wanted to relive the concert experience.

Artists record and release live performances through streaming platforms, generating additional income. Live recordings, behind-the-scenes footage, and tour documentaries are monetized on various digital platforms.

Tour Partnerships and Collaborations

Collaborations with other artists or bands for joint tours allow for shared costs and increased ticket sales. Tour partnerships provide opportunities for cross-promotion, exposing each artist's fan base to the other's music.

The "On the Run II" tour, a collaboration between Jay-Z and Beyoncé, showcased the financial success of joint ventures. The synergy between the two most prominent artists resulted in increased ticket sales and shared costs, grossing over $250 million in 2018, Variety reports. 

Live touring remains a cornerstone for artists to showcase their talent and earn substantial profits. By diversifying revenue streams, artists can navigate the music industry landscape while ensuring that the show goes on – both artistically and financially. 

According to Pollstar, "If 2022 was a historic record-setting year, which it was, then this year completely blew it out of the water— by double digits. Total grosses for the 2023 Worldwide Top 100 Tours were up 46% to $9.17 billion from $6.28 billion the year previous; average grosses were up a whopping 53.2% to $2.37 million per show from $1.54 million."

Artists strategically leverage a combination of ticket sales, merchandising, sponsorships, VIP experiences, streaming, collaborations, and various ancillary revenue streams to maximize their profits during live touring. This multifaceted approach allows artists to connect with their audience on a deeper level and navigate the complexities of the music industry while ensuring financial success on the road.

In my experience as a booking agent, I have noticed that artists find touring to be a more fulfilling and lucrative aspect of their careers, as live performances allow for a direct connection with fans, the chance to showcase their skills and the potential for significant revenue through ticket sales and merchandise. 

"Touring is key," New Order's manager, Rebecca Boulton, tells PRS for Music. "Once an artist reaches a certain level, live shows can be the most lucrative aspect of their income. When financially viable, [touring] can bolster an artists' fanbase, which, in turn, will increase music sales." 

Touring can be a significant source of income for musicians, and many artists rely on it as a primary means of generating revenue. Successful tours can be lucrative, with artists earning substantial amounts from selling tickets to live performances. It's worth noting that the financial dynamics of touring vary widely depending on factors such as the artist's popularity, venues' size, and tour management's overall efficiency.