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“Live 2.0” – the value of live events

At TED University yesterday, Jim McCarthy talked about the phenomenon of the value of recorded media plunges whereas the value of live, in-person experiences increases. He refers to this as Live 2.0. He pointed out that in 1985, the cost of a CD and a concert ticket were roughly the same. Recorded media has lowered in price (if you think about buying whole albums on iTunes) whereas concerts have gone up and up. Considering he was saying this in a room of people who paid $6,000 to attend, even though all the talks can be seen free online, clearly, there’s something there.

When this trend is discussed, the typical explanation involves people wanting to be together, with one another, because we’re fundamentally social, etc. etc. That’s obviously correct, but insufficient — people in 1985 wanted that togetherness as much as we do today. Other forces at play must have dramatically shifted the value.

A couple ideas:

  • The decreasing price of recorded media means people have money left over, and are able to funnel that money into other things they love, such as concerts.
  • Information about live events is easier to come across, thanks to the internet (whether simply sharing of forwarded emails, or tools like Upcoming). So more people know about these events increasing demand, increasing prices, because supply is limited.

    Your thoughts?

    1. I agree with both your points, but I would add a third factor: I think the most significant change has been the increased cost and quality of production for live shows. The scale and professionalism of the spectacle for the biggest names (Rolling Stones, Celine Dion, Cirque de Solei, and so on) has stepped up considerably since the mid-1990s. Opera tickets have always been expensive due to the high production values, and a major rock concert or circus or other live performance with the same quality and opulence will need to reach for the same level of ticket prices. That pushes up the relative price for the entire market, even those without as much glam, since people’s expectations have been set fairly high.

    2. Oh, I thought of a fourth factor: talent salaries. Professional sports is the best example: salaries for the top performers are large enough to directly impact ticket prices. You hire Beckham/Posh for a billion dollars, somebody’s gotta pay for that. I assume there has been similar salary pressure in the other talent industries: music, film, comedy, whatever. It’s all about the bling, baby.

    3. Great post.

      Your point makes more sense to me for entertainment, where increased piracy has driven to sell stars live at higher prices.

      To me that does not apply to conferences. Increased prices at conferences are the last attempt to front the new waive of user generated events, where the same people attend and network, at a small or no cost.

      The trend started by Meetups, Barcamps, Tweetups and the like are getting people together in a more interactive fashion.

      If conferences are selling speakers’ knowledge, expertise and networking, you can get pretty much all of it for free at several free gigs.

      To me expert status is something that is not marketable anymore with ridiculous ROI’s but rather on an inclusive model.

      Given that, we’ll always have the iPhone or Playstation of events but on a concpetual basis rather than on bogus 80-20 rules which belong to 1900.

      Of course this is my opinion but I am collecting case studies in this perspective and the trend is growing.


    4. Peter, thanks for talking about this!

      One point I made briefly in my talk is that, in fact, we have a decreasing set of options for in person socializing versus the past. You’ve probably read ‘Bowling Alone,’ but if you happen to have missed it, check it out.

      So yes, we wanted to socialize just as much then as we do now, but we have (or at least we find) fewer ways to do it. At least in person.

      BTW, if anyone is interested in listening to the talk, I recorded basically the same thing at this link on the Live 2.0 site:

      Thanks again for talking about this! I’m glad you got something out of my talk.

    5. This phenomenon is all about supply curves.

      Recorded (or, perhaps better stated for the purposes of this discussion, “non-live”) media is not just cheaper, as you noted above, but it’s also more ubiquitous. Chronologically, the walkman, iPod, and now iPhone streaming Pandora or have brought us quite close to the reality of a cloud-based universal jukebox. Add to that the ease of copying and sharing, and you’ll see there’s been a massive shift in the supply curve of non-live music & performance.

      In contrast, the supply of live performances, at least on a per-performer basis, has probably remained about level and will remain so until cloning is much cheaper and more reliable.

      These changes have also revealed new insights into the economically complementary nature of live and non-live performances.

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