40% of Seats Go Unsold

After officials in Greensboro, North Carolina caught wind of an essay I published last month entitled Edifice Envy, an long-time friend there invited me over to pick my brain at the acclaimed Green Valley Grill.

I had intended to ride the Cross Bones along some back roads, taking in Lake Townsend and the Guilford Courthouse National Park but hearing I was headed west anyway, another friend talked me into bringing the dogs and attending a dinner in Winston-Salem that night.

Guilford Courthouse was the name of the area when two of my great (x4 and x5) grandfathers settled there from Northern Ireland just in time to fight for their new homeland during the Revolutionary War before heading over the Appalachians.

Greensboro wasn’t founded until the 1800s so the county seat could be 5 miles closer to the center.  By then my Guilford ancestors had crossed into my native Rockies and Greensboro’s reputation for textiles loomed.

What most communities wouldn't give for a national park in their midst but Greensboro, like Raleigh in the other direction from where I live in Durham has always seemed drawn more to fantasy than authenticity even though a far greater percentage of participants for either are drawn to communities that value first, rather the latter.

Thus Greensboro underperforms by two-thirds the average nationwide for travelers drawn to parks such as Guilford Courthouse as it does in most areas except conventions where it performs on par.

Online social media chatter notes that Greensboro is building a new performing arts center a few seats larger than one built in Durham because Durham officials were bragging that patrons there (a handful) were coming all the way from Greensboro.

Greensboro is doing things right.  Private entities behind the project are shouldering the cost rather than seeking a tax on some 60+ unrelated local businesses like Durham proponents did.  They are also pursuing the same management company.

While that may give Durham officials cause to believe that this makes its lucrative management contract safe, it is more likely that one day the two communities will be played against one another to push for improvements such as owners of sports teams have done to obtain short-term attendance gimmicks such as Jumbotrons.

There are many reasons overall attendance at NFL games has been flat for a decade with many seats visibly vacant but being able to see replays on a huge screen is the least of those.

Far more, this is due to overbuilding of fantasy leisure facilities while the amount time and treasure for leisure has long been static.

Greensboro isn’t likely to draw as big a ratio of visitors to its new theater, that is if they ever begin to measure more than just the 20% who stay overnight.

Durham is an anomaly with a ratio for shopping, entertainment and dining that is 75% visitors/25% residents over more than two decades now.

Officials in Greensboro have begun to lecture nearby Winston-Salem to be cooperative and send its residents and visitors and related spending down I-40 but that isn’t how it works. 

Durham is unique among cities in North Carolina that draws that proportion not only because its destination marketing organization tries to, but because as research done two decades ago confirmed, its appeal is its authentic sense of place.

Some communities still have sense of place while others have surrendered it for fantasy such as generic water parks, ball parks and mainstream concert venues instead of leveraging indigenous, place-based assets and historic inventory.

Even business journalists, such as Catherine Carlock who covers Greensboro real estate are now coming to this conclusion by contrasting how various communities come at the bricks and mortar part of revitalization.

Just because the new Greensboro theater will likely draw a fourth to half as many patrons who are visitors does not mean it doesn’t make sense.  It just won’t have as much economic impact.

Adding a 12th performing arts venue in Durham bumped overall resident participation in performing arts and  popular concerts a point or two but all of its theaters have long ago benefited because it can draw visitors from two adjacent counties that have a much higher resident participation, one more than a third higher.

Greensboro has a small gap to fill in resident participation in these two categories but its neighboring counties are also far less inclined.  Even participation in the one midway between Greensboro and Durham has not budged just because Durham added capacity and programming.

Communities differ in interest not for lack of capacity or access to opportunity but because of inherent demographic characteristics driven by larger macro factors including why they chose particular places in which to live in the first place.

Ask Live Nation which includes Ticketmaster and now promotes and/or produces 25,000 live events annually including about 6,000 popular music live concerts many in theaters such as Durham’s and those held in the Greensboro Coliseum, and, until it closed last month for demolition, the 2,400 seat Greensboro War Memorial Auditorium.

Notwithstanding control of more than 60% of the live entertainment ticket market and 60 million ticket buyers including 14 million concert-goers (400 million worldwide now with incorporation of Ticketmaster) – an astonishing “40% of Live Nation seats go unsold every year.”

Ticket buyers increased 19% last year but that is mostly the same people buying more tickets.  Some is also due to growth in overall population and attempts to reduce the number of summer concerts and increase those held in the spring and fall.

But in part, those unsold are do to massive overbuilding of concert venues, particularly in the South over the past decade and a related consumer behavior called “access to opportunity.”

News releases surrounding performances of particular concert venues often fail to account for factors that are increasing revenues such as increased ticket prices or extended runs, e.g. touring Broadway.

Nor does it take into account that overall attendance for many forms of live entertainment are down or flat over the last two decades.

The percentage of Americans who attend popular concerts has been flat overall for decades, meaning that any increase must come from unrelated factors such as population growth and by more than doubling the price per ticket over the past 14 years (quadrupling just since 1989.)

Indexed to 2003 after the point when the promoter/producer industry began to consolidate and horizontally merge and venues began to rapidly overbuild, attendance at live popular concerts such as Country music, R&B, Hi-Hop and Rock music has repeatedly been slightly up then slightly down year to year over the past decade.

But essentially it has been flat in each category.

Foreshadowing a feared collapse of a house of cards is that the demise of the music recording industry in the face of disruptive innovation has led to many performers going back on tour.

Today only 1% of the acts now drive 56% of the ticket revenue; double the proportion in the 1980s.  And these performers are aging out.  Worst case, live entertainment is in store for major disruption. Just ask newspapers.

The remarkable success of Durham’s newest and largest live entertainment venue has not increased the percentage of Durham residents who attend popular concerts or inched it any closer to the national average or improved the ratio of residents as patrons.

These proclivities are not related to capacity or frequency or national renown.  Live Nation has the right idea by going back into its huge database of past concert goers to energize those who already attend.

It sees itself as a technology company.  According to Live Nation executives, “Getting a targeted message to the right person at the right time is solving our biggest problem which is awareness.”

“Every company is a technology company.”  Live Nation executives understand that their growth is “not from doing more concerts but extracting more value from the concert experience.”

Similarly, for venues hosting touring Broadway as Greensboro hopes to do, marketing guru Seth Godin has cautioned them to forgo traditional advertising and focus on “reaching fewer people, more often” by “building and connecting a tribe of enthusiasts.”

In a mature and static market such as live entertainment, success is not about missionary work to make performing arts converts.

Greensboro’s new theater will be a success in part because it replaces one nearly that size and because much of its attendance will be harvested from among the 21% of residents who already attend live entertainment events in other venues such as its Coliseum.

But after the initial halo wears off, it is not likely based on what other similar venues in other communities have done, to increase the percentage of residents in surrounding counties who attend live entertainment events.

Nor will it increase participation from visitors from 50 miles or more away.  Regardless of any braggadocio about more distant visitors flooding there, Durham’s newest theater didn’t nor did anyone who understood those dynamics expect it too.

However, as Durham’s will hopefully begin to do, Greensboro’s facility may be able to harvest more who are there on visits for other purposes.

Officials and news outlets in Greensboro have a unique opportunity to to realistically manage expectations beyond the first few years of hyperbole and “halo” effect for the new facility that boosts attendance for the first few years after opening or major improvements.

But history shows the temptation to avoid that trap may prove too great.

Its new theater there simply makes sense because 1) private philanthropy stepped up to shoulder its share, 2) it is replacing an existing facility and thus less destabilizing and 3) it fits in with Greensboro’s “new construction” approach forgoing sense of place to anchor revitalization with fantasy.

Greensboro should also not be threatened by nearby Winston-Salem’s plans for a new 3,000 seat theater which is designed to build on its existing placed based assets.

More on that tomorrow.