The Psychology of Pricing Musical Events

I’m currently doing a fair bit of research about pricing for music events, including festivals, gigs, concerts and other formats. There’s a massive range of pricing and in my view its a very interesting area of discussion. This article offers some thoughts on the matter based on my own observations and conversations with others.

The Difference Between Price v Cost

When we talk about “pricing” one of the first things to consider is “price v cost” These are often thought to be the same thing but they are quite different. The price is what you pay financially. The cost is what you pay in all respects- i.e. time to get to the event, accommodation, food options, everything that is involved in the situation.

The financial price may seem extremely attractive but you may then find other factors mitigate against this being such a good deal. Of course the value of anything is often very subjective. That said, any promoter running an event should IMO we mindful of added value if they want to attract a good number of people and maintain any kind of brand longevity.

Personal Preferences

Over the course of a year I will attend a wide range of musical events across the globe. In 2017 these included an arena gig and a number of small concerts. When I say “small” I mean a capacity of 200 or less. My favorite gigs by far were two concerts in New York at the Vanguard where I saw Bill Frissell. The venue has a total capacity of 125 and its $35 plus paying for one drink for usually a 90 min set. If you arrive early you can literally be a few feet away from the artists. This is one of the best musical experiences anyone can have and there are two sets per night with the venue mostly sold out. Great music lovers appreciate The Vanguard and know that’s its truly a place for music lovers. Similarly I just booked to see The Secret Sisters at a great local folk club and the price is 15 pounds for the evening. I saw Martin Simpson there last November (15 pounds for 2 sets) and it was a brilliant evening, again with a total capacity of 125 attendees.

Another favorite venue of mine is The Beacon Theatre in New York. The capacity is 2894 and I have seen The Allman Brothers there numerous times over the years. These were always sold out events and the playing time was always around three full hours. Back in 1990’s Eric Clapton joined them for the whole 2nd set. This is not an inexpensive night out and I may pay anything form 75 – 140 pounds for the evening, but it was 100% worthwhile as these were world class musicians and of course that window of opportunity has now gone. The Allmans were masters of added value and merchandising. You could get the whole concert you just saw on CD at the end of the show and a huge number of people bought these CDs. The sound was always amazing and they were known for always having a different set each night with surprise guests.

Price is always a filter and remember to add value…

The price for anything is always a filter for people’s purchasing choices. Some people regard 200 pounds as being expensive for a musical instrument. Others would pay thousands and not think twice. Of course affordability is also a factor and the higher the price does not always guarantee satisfaction for the customer. I ran a number of polls online to see what people would pay for a musical evening assuming this was not for an A-list artist or the reformation of Led Zeppelin. The general opinion was that 15 pounds was good value price wise. If you charge more you will still get people, but in my experience the numbers start to drop.

In December last year I was talking to an artist about a local event that was significantly more than 15 pounds for a few hours entertainment. On the night the numbers were pretty small for the size of the venue and it was obvious that even though at the last minute they kept trying to add value with all manner of incentives, most people on first impressions thought it to be too expensive. Few locals attended and many commented that it was far too expensive for their pockets. It was also quite close to Xmas which is traditionally a financial stretch for people. In contrast on Dec 23rd there was an evening of entertainment at a local venue that held 400 people. The event was sold out, food was available, there was a full bar and close to four hours music. What was the ticket price? Fifteen pounds…

Interestingly at the other end of the spectrum is you advertise an event as “free” that suggest to many that its not of any great value as there’s no money required to attend! The “pay as you feel” model is different and this allows affordability for all, but is a big risk for any promoter. However it does put the onus on the entertainers to do a great job and the hosts to provide an excellent environment for the entertainment that IMO should include a full bar, seated accommodation and great varied food options.

Making the numbers balance

If you are a promoter, the “risk v reward” factor can be a tricky balance. In the UK there are lots of niche events described as “festivals” These can vary massively in nature with budgets of anything for 10-50k. If we assume we are looking for a capacity of 400-500 people (this would be in my experience quite common) a venue cost is probably going to be between 5-6k. If the ticket price is 40 pounds (again reasonable for a weekend niche event) then at the lower 5k figure the promoter needs to shift 125 tickets at full price just to pay for venue hire alone without any other costs. Then there’s the cost of paying artists. Local artists may play for a token sum and/or “for exposure” BUT more established artists who travel will demand a fee which could be anything from 300-1000 pounds in my experience. If the artists come from overseas, there are also flight costs and accommodation costs. This means the overall costs seriously start to crank.

Audience Expectations and interesting poll feedback

Music festivals vary massively in nature. I blogged about this previously here

In that article I talk about what makes for a great music festival and those festivals that have stood the test of time. A key factor in achieving that is making the numbers work and meeting and/or preferably exceeding audience expectations. There’s no point in offering an experience that is not what the audience want. Some promoters can be a touch myopic in making commercial choices and this can really come to bite them. Typical mistakes are to choose artists who are personal favorites regardless of commercial appeal. Another mistake is fail to attract sponsors who are invaluable allies in supporting an event financially and through third party recommendations.

When I was doing some research for a colleague about ukulele based niche events, a friend alerted me to some very interesting events from an online poll where people were asked about buying preferences. Some of the most interesting results were as follows. Only 22.8% of those polled would consider a major artist as a reason for attending, compared to 52.9% who would prefer to jam with others. Options to buy stuff attracted 55.5% and meeting friends accounted for 37% of interest. This reconfirms my research that audiences for many niche events don’t really come to hear music, its more a social meet up/purchasing an opportunity. Nothing wrong with that of course, but that’s what attracts paying customers to many (not all) of these niche events.

Time for a New Model?

I have spent a big part of 2017 looking at this issue and 2018 will be more of the same. I’m interested in creating better opportunities for original musicians playing live. My own band “The Small Change Diaries” probably won’t be playing any more ukulele festivals, but rather looking at more music based festivals. To date The Lagoa Guitar Festival, some of the arts festivals, and our own album launch have been clearly the better options to reach appreciative listening audiences for our music.

The Pay as you feel model interests me greatly. Its a bold initiative but it needs to be framed properly and that means a lot of great attention to detail and providing exceptional value for customers. Of course its a risk for promoters but in a world where people are bombarded with choices, its a refreshing new way of thinking. I’m currently working on a big project that ties together many of the themes discussed here. Ultimately the value of anything is what people will actually pay for it of course