“Tickets are a luxury item that people cut back on,” said Alan Gould, an analyst at Natixis Bleichroeder in New York. David Kerstenbaum, an analyst at Morgan Joseph, agreed, saying, “The company is going to have to be very careful about its price points. They won’t be able to raise prices as much as they probably would have liked.”
Live Nation maintains customers are continuing to buy tickets because their typical consumer goes to just one or two concerts a year. The company says they saw little difference in ticket sales between 2007 and 2008, when the recession kicked in.
Artists, meanwhile, may be hit especially hard by any dip in ticket sales or prices. The upper tier of performers make 7.5 times more money from touring than from recorded music sales, according to a study by Marie Connolly and Alan B. Krueger at Princeton University.
Musicians have leeway in setting ticket prices but are often reluctant to cut prices. “They think ‘Well, so and so got that much, so I’m worth at least that,’ ” Bongiovanni says. “Until the public proves them wrong by not buying tickets, you’re not going to see an adjustment.”