So much to sell
The music industry might be dying, but the Dave Matthews Band knows how to make it pay: Take those jams on tour.
As usual,the list of North America’s topgrossing music tours of 2010 was heavy on AARP-eligible best-selling rockers: Bon Jovi, Roger Waters of Pink Floyd, the Eagles and Paul McCartney all figured in the top 10. But tucked among them, taking in $72.9 million, was the DaveMatthews Band, the ’90s-era jam-loving college-town rockers known affectionately as DMB (and less affectionately as the “Dave Matthews Bland”).
The band is nothing to sneeze at, of course. It has won a Grammy. Six of its seven studio albums have hit No. 1 on the Billboard charts. Still, compared with the other big touring acts of 2010, DMB is a featherweight— “Stay” is no “Livin’ on a Prayer.” Bon Jovi (who, to be fair, will not be eligible for AARP membership until 2012), Roger Waters and Paul McCartney have helped sell 130 million, 200 million, and north of 1.3 billion records, respectively. In the course of its two-decade-long career, DMB has moved a more modest 30 million.
But in an industry busy having its foundations rocked, in amatter of speaking, it hardly matters. Analysts and executives have long lamented that the music industry is dying. That is not quite true — it is the record business that is clearly done for, and in its place, touring stands as the top moneymaker for many industry participants. DMBlives to tour, making them not just popular but very, very profitable.
WhenI sayDMBlives to tour, Idonotjest. Every summerfor the past twodecades, the band has hit the road. In 2010, that meant playing 62 shows in 50 cities to 1,270,477 fans — more than any other artist touring in North America. The group also took trips toEuropeandSouthAmerica, andthere was a DaveMatthews and guitarist Tim Reynolds mini-tour. Andthe year was hardly unusual. Since 1992, Dave Matthews Band in its various iterations has played a whopping 1,692 shows.
So the precipitous decline in record sales in the past decade has hardly hurt DMB’s profitability because it makes the bulk of its money touring anyway, grossing more than $500 million. And it makes a lot of money doing it. According to Billboard Boxscore, between 2000 and 2009, DMBsoldmoretickets to its shows than any other band on the planet, moving a staggering 11,230,696 tickets. (No other band sold more than 10 million tickets in the same time period.)
On top of that, of course, there are profits from merchandise, records and other revenue streams. As long ago as 1998, DMB reportedly pulled in $200,000aday inmerchandisesalesontour. Plus, DMBhas a reported 80,000 fans paying$35 a year for fan club membership. And it benefits from a large catalog of cheap-to-produce live-show discs and DVDs. “Without any marketing or promotion,Live at Red Rocks debuted at No. 3 on the Billboard 200 chart and was instantly certified platinum,” the band boasts of its 1998 album. “[It] provided fans with a high quality and reasonably priced alternative to the over-priced, ill produced, and illegal liveDMBCDs.”
Part ofDMB’s success undoubtedly comes from managing its tour so well, because gross ticket sales do not always translate into profitability. Lady Gaga, for instance, was also in the Top 10 for 2010, grossing $51 million in North America, charging legions of fans about $100 a pop. But the shows proved enormously expensive to put on, what with the army of scantily clad backup dancers and dozens of fancy costumes — including a bra that shoots sparks, a feathered bird getup, and an enormous wearable gyroscope nicknamed “ the Orbit.” Add in the fountain of fake blood and the price of flying such nonsense around the world, and extravagance cut into the bottom line. The tour actually lost money at first.
In contrast, DMB’s tour seems downright humble. There is food. There is merchandise. There are video portions. But mostly, there are just the jams and the fans, and that’s how DMB obsessives like it. Indeed, the band cultivates enthusiasts particularly well, a main secret of its success. It keeps ticket prices low in comparison with other big shows, anaverageof $58.79comparedwith $91.56 for arena-rockers Aerosmith. It offers a high proportion of plum tickets to fan club members and offers them tons of freebies and special deals online. It also plays a stable roster of songs but jams or improvises at each gig, bringing fans back every year, oftenmorethanonce. Thus, while even the biggest-selling artists front the occasional flopped tour, DMBnever does.
If that sounds familiar — not the music, the strategy— it’s becauseDMBis pulling an old trick pioneered by the Grateful Dead, a band beloved of business school professors and folk-lovers alike. As described in the delightful“MarketingLessons From the Grateful Dead,” the famed jam band produced only a few well-known albums and songs. But they toured constantly, playing about 200 shows a year from 1965 to 1995. And they courted their fans, treating the concert like a service rather than a commodity and their fans like members of a community rather buyers of a product, becoming one of the most successful bands of all time.
In many ways, DMB is the Dead’s inheritor: a serious touringbandthathascaringly cultivateda devoted fan base and ended up becoming an industry anchor. Some analysts say touring will eventually anchor the whole music industry. In the past 10 years, as record sales have collapsed, the touring business has tripled in size, to nearly $5 billion a year in total revenue. (That’s mostly due to higher ticket prices rather than more people attending more concerts.) But in 2010, according to Pollstar, the top 50 tours netted only $2.9 billion worldwide in ticket sales, down 12 percent from 2009. The industry expects a stronger 2011, with consumer sentiment improving in the United States and such huge acts as U2 saddling back up.
For the first time in decades, though, DMB won’tbethere. “[ We] wantedto let everyoneknow that after twenty years of consecutive touring, Dave Matthews Band will be taking 2011 off,” the band wrote fans last year. “We feel lucky that our tours are a part of so many people’s lives, and wanted to give everyone as much notice as possible.” But, it noted, we “ look forward to returning to the road in 2012.”
Guitarist DaveMatthews and violinist Boyd Tinsley of the DaveMatthews Band, which has toured every summer for the past two decades.