Problems with the new music model?

In a number of previous postings, I’ve talked about how the music monetization model has moved from recording sales to live performances – as a direct result of the rise of free online music (legal and illegal). But, as the Wall Street Journal reports, there may be a problem with this new model:

With the continued evaporation of recorded music sales, acts at all levels of the talent pool must lean heavily on their live-performance earnings. That’s forcing artists to tour more, and to keep their ticket prices high, despite the weak economy. This has created a glut of seats.
. . .
Live Nation Entertainment, which after a recent merger with Ticketmaster is now the most powerful live-music company in the industry, says bad news from a handful of tours doesn’t signal a crisis. “Cancellations are part of the business, and in fact the number this year is in line with past years,” says Jason Garner, chief executive of the company’s concerts division.
Still, he says failed tours and slower ticket sales should serve as a collective wake-up call: “When 40% of tickets across the industry are going unsold, you have to have an honest talk about ticket prices.”

All of this doesn’t quite add up to the Journal’s tag line for the story – “Why the Eagles, Rihanna and the Jonas Brothers Have Canceled Concert Dates This Summer.” In fact, the story goes on to say, “This summer, everyone seems to be on the road.”
Still, the point is interesting. As live performances become more the norm, consumers can become more selective and prices drop. That’s the way the market works. Seems to me that this is evidence that the shift in the model is being successful – not the other way around.

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