Is there demand for a Take That concert tour in South America?

It appears that the now “Manchester Trio” Take That has triumphed yet again after the departure of band-member Jason Orange with a #1 single titled “These Days” and a #1 album titled “III“. They are getting geared to go on tour. When this happens, fans outside the band’s core territories tend to hope that a concert tour from their favorite band will come to where they are. This post has been inspired by the Twitter-based #TTtoArgentina campaign that is being run by the Argentinian fans of one of Britain’s greatest pop bands – Take That. The campaign is an endeavor to persuade Take That to perform a live concert in Argentina. Argentinian fans insist that there is a LOT of love for Take That in their country but is there sufficient demand to make a Take That concert in Argentina a profitable promotional activity? To address this question, it is imperative to make a data-driven quantification of the demand for such a show in Argentina.  After all, the music industry is still very much a business and the bottom line does matter. For those readers that read  our post about whether there is demand for a Take That tour in the US, the train of thought that we are using in this post is similar to that of this post titled “Is there demand for a Take That concert tour in the US?”.

The management companies and record labels for artists such as Take That are convinced that there is no demand for these artists outside UK and Europe. This assertion is based primarily on the fact that these artists/bands have no exposure via terrestrial radio outside of Europe. But is terrestrial radio the final word in terms of determining the lack of viability of a concert tour for a globally successful artist? Maybe not.

In this world of big data, it appears that the music industry displays the most resistance to leveraging data in making marketing and promotion decisions around musicians. Record labels are to blame for this. They continue to resort to “old world” approaches such as “focus groups” to figure out the marketability of their artists. Decisions are made primarily on gut instinct and are very often divorced from reality.

When deciding whether or not an act such as Take That is viable in Argentina from a concert tour perspective, the following questions need to be answered:

 What is the market demand (in terms of potential ticket buyers) for acts such as Take That in Argentina and what cities is this demand concentrated in (if indeed there is a concentration)?

If there is market demand, how many shows can be put on and in which cities?

Can the tickets be priced in such a way that the tour is profitable? Depleted levels of demand on a per-city basis can make this a tough one.

 

For bands that do not have a significant commercial footprint in a specific country’s mainstream (i.e. not much terrestrial radio play), record sales is NOT a good indicator of domestic demand for an artist or band. So given that record sales are inadequate and radio airplay on terrestrial radio is practically non-existent, what is the answer?

The answer can be summarized in two words – “social data”. In the last few years, companies like The NextBigSound have proved that a music listener’s activity on a social network (especially as it relates to his or her favorite artists) is a stronger predictor of music consumption patterns than responses to old-world research approaches such as focus groups and surveys. It is absolutely mindboggling that record companies do not dig into this pool of social data to make any of their decisions about their artists. Here is the best part of this data. It is literally available to ANY of us (or so we think!).

We used Facebook’s Audience Insights to project demand for Take That in Argentina (and a few other countries in South America).. For this analysis, Facebook’s Audience Insights gives us the following data:

 

1. The number of ACTIVE “Take That” fans (based on whether or not a facebook user explicitly “likes” Take That) in each country.
2. For a given country, the “percentage split” of Take That fans across the country’s major cities.

We made the following assumptions in our exercise of determining whether or not Take That live gigs are profitable in South America:

 

1. Take That’s tour promotion company can get the word out on the live gigs to ALL the band’s facebook fans in each of the South American countries that we analyzed.
2. Facebook gives us a lower estimate and a higher estimate of the active monthly fans of Take That. The number associated with the lower estimate is equal to the number of guaranteed ticket buyers for a Take That concert.
3. The likelihood of a Facebook fan to buy a ticket is NOT lowered by the fact that Jason Orange and Robbie Williams are no longer part of Take That’s current incarnation.
4. All the demand for a concert is LOCAL. No one will travel from one city to another to watch Take That. For instance, a fan in Rosario (Argentina) will NOT travel to Buenos Aires (Argentina) to watch the concert. We made this assumption to be conservative.
5. The cost basis for Take That to perform in South America is similar to that of artists such as Ed Sheeran and James Blunt – both of whom have enjoyed success with live gigs in Argentina.
6. Take That needs to be able to sell a MINIMUM of 5000 tickets in a city for the concert(s) in that city to be profitable.
7. There is ZERO “opportunity cost” associated with Take That spending a few weeks in South America for live concerts.

We have infographics for Take That’s fanbase in the following countries – Argentina, Chile, Brazil, and Peru.

ARGENTINA:

 

The infographic above suggests that Take That has a minimum of 15,000 active Facebook fans in Argentina. Fortunately, this fanbase is not dispersed and is concentrated in Buenos Aires (40% of the fanbase is here). Assuming the “percentage splits” in the above infographic can be applied to the 15,000 number, and that all 15000 fans would buy tickets to a Take That concert, Take That is guaranteed to sell a minimum of 6000 tickets (i.e. 40% of 15,000) in Buenos Aires – and hence meets the guideline for profitability in this city.

 

BRAZIL:

 

The infographic above suggests that Take That has a minimum of 30,000 active Facebook fans in Brazil. In comparison with Argentina, Take That has a critical mass of fans in two cities – Rio De Janeiro and Sau Paulo. Assuming the “percentage splits” in the above infographic can be applied to the 30,000 number, and that all 30,000 fans would buy tickets to a Take That concert, Take That is guaranteed to sell a minimum of 5100 tickets (i.e. 17% of 15,000) in Rio De Janeiro and a minimum of 5100 tickets (i.e. 17% of 15,000) in Sau Paulo. Once again, Take That meets the guidelines for profitability in both cities.

 

CHILE:

The infographic above suggests that Take That has a minimum of 15,000 active Facebook fans in Chile. Like in Argentina, Chile’s Take That fanbase is concentrated in one city – Santiago (50% of the fanbase is here). Assuming the “percentage splits” in the above infographic can be applied to the 15,000 number, and that all 15,000 fans would buy tickets to a Take That concert, Take That is guaranteed to sell a minimum of 7500 tickets (i.e. 50% of 15,000) in Santiago.

 

PERU:

The infographic above suggests that Take That has a minimum of 10,000 active Facebook fans in Peru. Like in Argentina, Peru’s Take That fanbase is concentrated in one city – Lima (65% of the fanbase is here). Assuming the “percentage splits” in the above infographic can be applied to the 10,000 number, and that all 10,000 fans would buy tickets to a Take That concert, Take That is guaranteed to sell a minimum of 6500 tickets (i.e. 65% of 10,000) in Lima.

[JANUARY 31, 2015 UPDATE]: MEXICO

We do not really think of Mexico as being part of South America but it is still very much a huge part of Latin America’s core. Geographically speaking, it is not exactly a detour from South America. Logistically, it would make a lot of sense for Take That to add Mexico to a tour itinerary that revolves around South America. Interestingly enough, Mexico City just might have the most potential for ticket sales among the cities we have highlighted so far.

The infographic above suggests that Take That has a minimum of 30,000 active Facebook fans in Mexico. Like in Argentina, Mexico’s Take That fanbase is concentrated in one city – Mexico City (33% of the fanbase is here). Assuming the “percentage splits” in the above infographic can be applied to the 30,000 number, and that all 30,000 fans would buy tickets to a Take That concert, Take That is guaranteed to sell a minimum of 10,000 tickets (i.e. 33% of 30,000) in Mexico City.

In summary, not only is a short South American tour financially viable for Take That, it is also guaranteed to be profitable under the set of assumptions that we outlined earlier. A Take That tour plan in South America would look something like the table below:

 

Country	City	Venue	Tickets sold (per concert)	Number of Concerts
Argentina	Buenos Aires	Gran Rex	3260	2
Brazil	Rio De Janeiro	Vivo Rio	5000	1
Brazil	Sau Paulo	HSBC Arena	4500	1
Chile	Santiago	Movistar Arena	7500	1
Peru	Lima	Coliseo de Eduardo Dibos	6000	1
Mexico	Mexico City	Palacio de Los Deportes	10,000	1

As mentioned before, this data is public. Record companies do not have to work hard to access this data. Their modeling assumptions to calculate the size the Take That concert “ticket buyer” market in South America might be different from the ones we have used but the source data is there and it is easily accessible. Now, all that needs to be done is for this post to be read by Gary Barlow, Howard Donald, Mark Owen, 10 Management, and Polydor Records (Universal Music). We would associate even a mere consideration of our data and analysis a victory for South American Take That fans. Until then, here is a video from the fans in Argentina. It is a dedication to Take That a sincere plea to Manchester trio to grace their country with a live concert.