Is there true demand for a Take That or Ronan Keating concert tour in the US?
“If Take That or Ronan Keating played in the US, they would easily sell out arenas in select cities”. This is the assertion of American fans of these artists. Take That and Ronan Keating are just examples of global stars that have a minimal footprint in the American pop culture. That being said, this list of “obscure only in America” artists is quite a long one. Noteworthy examples of people in this list include Robbie Williams, Poets of the fall, and Will Young. Despite their relative obscurity, their fans in the US insist that there is sufficient demand for these artists to do concert tours in the US. But can any of these people truly quantify the demand for American concert tours of their favorite artists? More importantly, can people truly assess the profitability of such concert tours? After all, the music industry is still very much a business and the bottom line does matter.
The management companies and record labels for artists such as Take That and Ronan Keating are convinced that these artists are NOT commercially viable live acts in the US. This assertion is based primarily on the fact that they have no exposure via terrestrial radio in the US. But is terrestrial radio the final word in terms of determining the lack of viability of a concert tour for a relatively obscure non-American artist in the US? 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.
a. What is the market demand (in terms of potential ticket buyers) for acts such as Take That in the US and what cities is this demand concentrated in (if indeed there is a concentration)?
b. If there is market demand, how many shows can be put on and in which cities?
c. 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.
Record sales for these artists in the US is not a good proxy for demand since these days, most people (with the exception of absolute die-hard fans) are quite put off by the idea of buying “import CDs” at high prices by artists whose music is not released via digital stores in the US. Interestingly enough, this problem only exists for fans of a handful of major label artists from overseas. Fans of Indie artists from overseas do not suffer from this issue in the US. 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.
One good starting source for this type of data comes from Facebook’s Audience Insights. A week ago, we took a peek at Facebook’s audience insights to get a true sense of what Take That’s American fanbase looked like on Facebook. Here is an audience profile (created from Facebook’s “Audience Insights”) of the Take That fan in the US.
The snapshot reveals that there at least a 100,000 active American Take That fans on facebook alone. This does not mean that there are a 100,000 ticket buyers for a Take That concert but it means that even a moderate fraction of this number is fairly substantial and could potentially justify a tour. But this is 100,000 active fans across the US. To say this number justifies a show in the US assumes that people are willing to travel within the country to attend a show – and that very well might be true but certain assumptions would have to be made to model out the demand in the few locations that Take That could potentially perform at. For the sake of argument, let us assume that around 90% of these folks are potential ticket buyers, that gives us a US market size of 90,000 ticket buyers.
Now, the next question becomes where in the US Take That could potentially perform AND get a large enough crowd to be profitable. The snapshot below shows a geographical breakout of Take That’s fanbase in the US.
There appears to be no concentration of the fanbase. It is pretty dispersed with a maximum of 8% being based in Houston. This is a noteworthy surprise. One would expect this fanbase to be predominantly in the country’s media centers and nowhere else. Assuming that the 90,000 ticket buyers have the same geographic breakdown shown in the snapshot above, one could expect the following turnouts for a Take That show in the following cities:
Houston: 7200 tickets
New York City: 6300 tickets
Los Angeles: 6300 tickets
A 5000-seat venue is the bare minimum for a Take That show to be viable. It must be emphasized that this would be a pure music show with no theatrics of the sort that Take That is known for in their stadium performances. In a nutshell, a Take That mini-tour is absolutely viable in the US – with a focus on Houston, New York City, and Los Angeles guaranteeing a positive return on investment. The demand numbers above assume that no one will travel from other cities within the US to watch Take That – which we can safely say is a false assumption. Odds are, people WILL travel from other cities to watch one of the greatest live pop acts.
Here is an audience profile (created from Facebook’s “Audience Insights”) of the Ronan Keating fan in the US.
The snapshot above reveals that the overall market demand is substantially lower than that of Take That. The lower number of 35,000 American fans is the universe of ticket buyers that Ronan Keating’s record label has to work with. Let us assume that of this universe, 32,000 of these fans are potential ticket buyers. More importantly, let us assume that this mass of 32,000 fans is split geographically based on the location profile below for Ronan Keating fans.
This snapshot is noteworthy because of Ronan Keating’s San Diego fanbase – which appears to be larger than that of any other fanbase in the country of his. Based on the stats above, here is the demand for Ronan Keating in the following cities:
San Diego: 4480 ticket buyers
Chicago: 2560 ticket buyers
Los Angeles: 2560 ticket buyers
For Ronan Keating, anything less than a 2000-seat venue might not really work or have a positive ROI. Despite the demand for Ronan Keating being substantially lower than that of Take That, there is commercial viability for a limited number of shows in the US for Ronan Keating. Some critics might say that we have not factored in costs and pricing of tickets and hence there is a very basic gap in our assessment of commercial viability. As we had stated earlier, the shows will be centered around music – no dancers, no special effects, no theatrics. We have used the viability of comparable artists playing in venues that can hold between 2000 and 10,000 people and are assuming that the pricing for Take That and Ronan Keating’s shows will be similar to that of those shows.
As mentioned before, this data is public. Record companies do not have to work hard to access this data. Their modeling standards and assumptions to calculate the size the market in the US might be different from the ones we have used but the source data is there and it is easily accessible.
Last, but not least, Take That and Ronan Keating are absolutely viable as commercial live acts in the US and we have the numbers to prove it! Please feel free to add your ideas or comments in the “comments” section below.
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