Album Bundles-From A Promoter

Here's my take on albums bundled with ticket sales. First thing to note, TicketMaster refer to it as a "forced bundle". This is because the customer has no option to decline the bundle. They have to pay the same as everyone else, then they can choose not to redeem. Billboard is aware of this and thus only counts redeemed albums, their rules involve the customer having to take action to redeem. If all purchasers received an album directly whether handed out physically at a show or sent digitally as files Billboard would not count it. There has to be a decision to redeem.

All that said, from the customer perspective they don't think "Oh, I get my ticket and the album only cost me $5 extra averaged across all redemptions". The customer thinks "Cool, free album".

As we all know ticket pricing is one of the toughest jobs for a promoter and any tour. If you Price too low you've got an instant sellout but all of that extra demand goes to the secondary market. Revenue not going to the artist who created the demand or the promoter who is taking the risk. Price the tickets too high and you don't sell all the seats. There can be unrest by the fans on social media about the high prices and if ticket prices aren't corrected quickly the show could end up not selling out and possibly losing money for the promoter.

I bring all of this up because the record labels try to sell the forced bundle as "it's easy, just add $5 to every ticket." But if we thought the tickets would sell for $5 more they would already be at that price.

So in reality the $5 is just a deduction off the box office. 12,000 tickets at an arena, $60,000 charge for the album. 50 shows in a tour and someone just spent $3,000,000 buying albums. The record companies couldn't be happier with that arrangement. All they need to do is get their Artist to agree to the album bundle and they just sold 600,000 albums. No marketing on their part, the promoter has to market the tour, no real effort to sell those albums other than to ensure a smooth redemption process (usually outsourced to TM). And they just sold $3,000,000 worth of albums. So who is paying that money?

Billboard and the labels like to think the customer is paying it, it's in the ticket right? But as stated above the tickets are priced what they can sell for, and there is no perceived added value for the album. That money would be in the show gross with or without the album bundle. That means that assuming a tour is in percentage the Artist is left paying the bill for their own albums. Or at least 90% of it (assuming a 90/10 split with the promoter). But if the tour is not in percentage the promoter is left paying that bill. Knowing this risk is there most promoters are now pushing to keep Album Bundles out of the deal entirely. Which means this cost is left entirely on the Artist. Which at the end of the day means the Artist is actually buying their own albums.

Craig Sneiderman
Sr Vice President Touring
Concerts West

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