Increased Concert Ticket Prices = Downloading?

This is not my area of expertise, but the conclusion Krueger makes appears to take for granted that decreased record sales are due to downloading, which strikes me as a rather large assumption - an assumption that I don't believe has been substantiated as of yet:

If you have gone to a rock 'n' roll concert lately, you probably noticed that the price of tickets has been rising faster than the decibel level. Although concert prices have always grown somewhat faster than inflation, from 1996 to 2001 the average price soared 62 percent, while the Consumer Price Index increased just 13 percent and the price of sporting events, movies and theater rose 24 percent.

The average price to see Billy Joel and Elton John in concert, for example, jumped from $44 when they toured in 1995 to $110 this year. The best seats rose even more: to $175 from $50.

The reasons for this extraordinary growth are debatable.

Many point to Clear Channel Communications, the giant multimedia conglomerate. After the Telecommunications Act of 1996 relaxed constraints on radio station ownership, Clear Channel gobbled up nearly 1,200 stations. It also owns amphitheaters and billboards. Clear Channel entered the concert promotion industry by acquiring SFX Entertainment in 2000, and it now promotes two-thirds of all concerts, by dollar sales.

Critics have accused the company of monopolizing the industry. Representative Howard L. Berman, a California Democrat, has urged the Justice Department to investigate whether "Clear Channel has `punished' recording artists, including Britney Spears, for their refusal to use its concert promotion service, Clear Channel Entertainment, by `burying' radio ads for their concerts and by refusing to play their songs on its radio stations."

Although the anecdotal evidence is strong — and the concert industry certainly appears to be more monopolized lately, with rising prices and declining ticket sales — it has proved surprisingly difficult to find systematic evidence linking Clear Channel to the exorbitant growth in concert prices. In particular, analyzing data from Pollstar and Arbitron, I find no correlation between Clear Channel's share of radio listeners in a city or state and its share of concerts promoted there, or between its share of radio listeners and the growth of concert prices. Likewise, there is no correlation between the change in the concentration of concert promoters in an area from 1994 to 2001 and the corresponding growth of prices or ticket sales.

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Article Author: Eric Olsen

Career media professional Eric Olsen is honored to be the founder and former publisher of Blogcritics.org, and former publisher of Technorati.com, which both rule. He is now editor, co-founder, and CEO of The Morton Report.

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