Story courtesy of Billboard Magazine
It may be a digital age, but live is still the big cash driver for the top 40 earners on our annual list.
The U.S. music business offers a matrix of trends to satisfy chart watchers and number crunchers. New CD sales continue to fall. Digital music sales are rising nearly 10 years after the launch of the iTunes Music Store. Streaming and subscription revenue are growing as music lovers choose easy access over-and, sometimes, in addition to-physical ownership.
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These trends, however, matter very little to the most successful earners in the industry. When it comes to making the biggest score, the most money always comes from high-paying live performances.
Concerts make up 68.9% of revenue for the 40 artists on Billboard’s Moneymakers list, which tallies artists’ annual earnings. Remove Adele and Taylor Swift, both of whom didn’t earn any U.S. touring income in 2012, and the average increases to 72.5%-a figure on par with the 72.6% in 2010 and the 68.3% that touring represented in 2011.
Perhaps Live Nation CEO Michael Rapino said it best during a conference last week, noting that music artists now make “90% of their money on the road. It’s truly become the center of their financial world.”
Madonna tops the 2012 list, in part because 93.5% of her total revenue came from concerts. Bruce Springsteen, a close second, earned 92% of his revenue from live shows. Roger Waters, a distant third, had the highest concert share on the list with 93.6%. The entire top 10 averaged 84.2% of their income from concerts, and the number would have been higher, if not for Justin Bieber’s mere 60.1% share at No. 10 dragging down the average.
Billboard estimates the 2012 Moneymakers artists pocketed $373 million from concerts after paying agents, managers and expenses. That was up from $329 million in 2011 but down from $383 million in 2010. For all Moneymakers artists, touring income accounted for 72.8% of revenue in 2011 and 75.1% of revenue in 2012. Artists at the top of the list got an even greater share of revenue from touring. A top 10 artist made 84.2% of income from concerts in 2012 compared with 75.8% in 2011 and 81.7% in 2010.
Ironically, the most popular touring artists are usually well past their peaks on the album sales charts. In fact, touring revenue was negatively correlated with CD sales (-0.35 correlation), digital album sales (-0.43) and digital track sales (-0.38) in 2012. In other words, touring revenue doesn’t move in the same direction as recorded-music sales for the 40 acts on the Moneymakers list. Artists with higher touring revenue have lower recorded-music sales and vice versa. Touring revenue is also negatively correlated with noninteractive streaming services like Pandora (-0.36) and streaming revenue in general (-0.4).
This probably doesn’t come as much of a surprise. Major touring artists who command large revenue tend to be decades past their peak in recorded-music sales. In the case of the rock band Rush, for example, there wasn’t a lot of music-streaming activity to go along with the group’s strong touring and decÂent recorded-music revenue. Indeed, Rush earned 77.2% of its revenue from concerts and only 16.2% from recorded music-CDs, digital albums and/or digital tracks-but just 0.04% from streaming.
Touring wasn’t vital for every act on the Moneymakers list. Two major artists, Swift — who topped last year’s rankings — and Adele, made the list without any concert earnings for the year. Meanwhile, two others-Mumford & Sons and Maroon 5-pocketed less than $1 million in concert earnings for 2012. In percentage terms, touring accounted for just 12.6% of Mumford & Sons’ total revenue and only about 2.6% of Maroon 5′s total.
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