Expert Testimony: Required: Great Songs and Great Performances

Despite a tough economic climate and well-known music industry woes, Professor Jeff Dorenfeld of the Music Business/Management Department is upbeat about the future for musicians - especially in the field of live performance. While record sales have declined, receipts for major tours have soared.

Before he began teaching at Berklee, Dorenfeld was a tour manager, tour accountant, and lighting director for major tours. Eventually, he became manager of the multi-platinum band Boston. By now he's seen the live-music industry from all angles. "When you look back, artists used to tour to support their records," Dorenfeld says. "Things have flipped. Record sales have dropped significantly since the 1990s. You could say current artists release records to support their tours." Recently, Dorenfeld sat down with Berklee today to discuss trends in the field of live-music performance.

Why are concert tours so profitable when expenses for huge stadium shows are exorbitant? Are more people going to concerts? 

Higher ticket prices are part of the answer. When you see figures for gross receipts of a concert, the numbers are skewed. The gross numbers show more dollars but not necessarily more ticket sales. In 2008, ticket sales were a little over $4 billion, but it doesn't mean that in 2008 there were more tickets sold than in 2007. In 2009 the figures for the first six months are ahead of those for 2008. We'll see how it comes out when we can look at the whole year.

The major tours are grossing so much despite expenses being higher. I have heard that costs for the U2 tour are $750 K per night. They have multiple stages leapfrogging across the country with 120 trucks and 250 crew members. While the band plays in one city, the crew is setting up or breaking down in another. It takes three and a half days to tear the stage down. The U2 shows are generating somewhere between $6 million and $9 million per night depending on the stadium. When you do the math, the profit margin is very high even with the kind of overhead they have.

How can consumers pay such high ticket prices when money is tight?

They want to have a great concert experience. Historically, the tickets that sell faster are the the price-level 1 seats that are closest to the stage. If tickets for the seats in the price-level 2 section are half the price, the more expensive ones still sell faster even though the P-2 seats may be only four feet farther from the stage. People who can afford to pay for them want the best seats.

The market tells us that even the most expensive tickets are still underpriced. On the secondary market, a ticket with a face value of $200 may be marked up to $500 or even $1,000. Fans are willing to buy them. So that shows the real market value of the tier-one ticket. It's not true of the less expensive seat far from the stage. Historically, these are harder to sell.

That's great news for acts like Bruce Springsteen, Paul McCartney, U2, and others, but reaching superstar level is daunting for a budding artist.

There will come a day when the Rolling Stones will retire. Who will take over from the older, established bands doing the major tours? Over the past 10 years, Coldplay, Jay-Z, Radiohead, Kings of Leon, and others have established themselves as arena artists. Bands such Arcade Fire and Sigur Ros came out of the Internet environment and sell around 4,000 seats. I can see both of these acts making it to the next level. Taylor Swift can sell as many tickets as anybody. She's young and smart, she writes the songs, and sells. I still think it comes down to two factors: do you have the songs and can you perform live?

Anyone who is serious about playing music should have a goal to be a touring artist that can generate enough revenue to make a living at what they love to do. That doesn't mean they will necessarily become as big as U2 or Madonna. But being a phenomenal live performer is very important in today's market, because it's still the number-one revenue source for musicians. That takes into account ticket sales, sponsorships, merchandise sales, and anything else you might sell as you brand and monetize yourself as an artist. I find that young artists don't take advantage of everything that's available to them for their live performance. They can play well - especially if they are Berklee kids - but they need to think about everything a major artist does for a performance.

What considerations are you referring to?

When you play a venue, if there is lighting there, you should get there early and stand in the lights and decide if you want to move them or choose colors. The whole band should be in the lights so that you look special onstage. You have to be special. I've seen too many artists who are scheduled to play, and they are hanging out front before the show and then just climb onstage to play. I've never seen a successful touring artist who does that. Performers should be like professional athletes who are in the locker room getting mentally prepared before the game. After the show go out to your merchandise table and meet your fans.

I believe a band should be isolated from the fans before they go onstage, even if it's in a club where the dressing room doubles as a storage closet. Band members should change into a different outfit before they go on stage. Even if you're going to play in jeans and a t-shirt, you should change from the jeans you walked in wearing. This prepares you mentally to go onstage. Most artists don't prepare like this, and when they finally get the chance to play on a big stage, it is hard to score because they haven't done the preparation. I learned when I was touring with big artists that you have to always play bigger than life.

Years ago I read a story about [baseball player] Joe DiMaggio who always gave his best on the field. During a late-season game after the Yankees already knew they would be in the World Series, Joe ran to catch a fly ball and hit the fence hard, but still caught the ball. Afterward a reporter asked him why he risked an injury in a game that didn't mean anything [because] the Yankees were already in. I'm paraphrasing, but Joe said something like this: "You're missing one thing. Every time I play, there is someone in those stands who has never seen me play. That's who I'm playing for." Bands need to have that attitude too.

Have technology and the Internet truly leveled the playing field for independent artists?

It's easier to get into the game now than before, but I don't believe the playing field is level. Sure, you can record cheaper, get your videos on YouTube, get your music online, and anything else that label artists can do, but it's still difficult.

It's been proven that you don't have to have big record sales to have a great touring career. The Grateful Dead was one of the biggest touring acts for years and never sold many records. Jimmy Buffet sells lots of tickets, but not many records. The biggest touring bands are the ones that have established themselves over a period of time and have built their careers on great live shows.

Much has been said about artists using the Internet and social media MySpace and Facebook, or Nimbit, Topspin, Sonic Bids, Tunecore, and other sites. Today's artist needs to use these new tools, but nothing else is different than in the past. It still comes down to having great songs and giving a great live performance. Your gigs should feel like an event. People want to see great performers because something about the experience will be very special. If you're trying to be a bigger-than-life performer, you need to keep writing, keep working on your live show and keep performing. If you don't drop the ball or let your ego get in the way, you'll have a career. There are still a lot of opportunities.