#DigitalSkeptic: The Live Concert Business Hates Live Concerts
NEW YORK (TheStreet) -- Todd Hunt will tell anybody who's got the guts to listen that the secret to making money producing big-time live music concerts in the digital age is not strictly relying on partners such as Live Nation Worldwide or selling VIP tickets or T-Shirts or via Facebook or the iPhone or even the mobile Web.
The secret is not actually being in the live concert business at all.
"The concerts are exciting. They are the glitz and the glamour. But they are not the bulk of the business," Hunt told me on the phone. He's the director of the 10,000-seat BancorpSouth Arena and Conference Center in Tupelo, Miss., which serves the greater Mid-South, including Tennessee and Alabama.
"Markets vary dramatically," he said. "And it's not like we don't want concerts, but venues of this scale get at most 20% of revenue from live music."
Investors should realize that Hunt is not merely speaking from his 18-some-odd years in the live event trade, nine of which were spent working and then managing BancorpSouth. Or that his facility fetches top-line sales of $1.5 million to $2 million per year from selling north of 235,000 tickets for concerts, events such as Disney on Ice, World Wrestling Entertainment and smaller local graduations and meetings. Hunt is also chairman of the arenas committee for the International Association of Venue Managers, the Coppell, Texas-based large venue trade group.
That means he has a unique line of sight on just the type of facilities that are supposed to be the final payday for today's digitally enabled stars, such as Jay Z, Taylor Swift or Justin Timberlake.
"We love doing concerts when they work," he said. "But the risks now are so great, you have to be very careful."