In an economic downturn, maybe “flat” should be considered the new “up.”
Other industries are getting gutted in the current economic climate, but transportation industry leaders in the touring industry are grateful for “business as usual,” which remains (mostly) good. The caveat is that customers want better pricing. And some companies outside of the concert/touring business who happen to have some big trucks are trying to elbow into the market. And if the recorded music industry continues to struggle, its decline is making touring a more important source of income for artists, and that’s good for industry transportation professionals.
David Kiely, Roadshow Services
“I’ve noticed there is severe pressure to push the rates downward,” says Roadshow president David Kiely. “We’re seeing more general freight carriers entering the marketplace, and they are taking market share.” It’s understandable, he adds, as production companies are also under pressure to lower costs. Since the automobile industry slowed way down, there are simply more empty trucks available. But it takes more than an empty 18-wheeler to move tours around the country.
“Traditionally this isn’t their market, and so they are going to provide a different level of service. But it will bounce back — water keeps its own levels. Quality people will demand what the professionals can provide.”
He then notes what industry veteran Steve Maples told him years ago: Every year somebody thinks they want to be in the rock ‘n’ roll business, and they come in fast and leave just as quickly when they realize they can’t make money. In their wake, they leave a little turbulence in the marketplace.
“People don’t understand that we make it look easy, but there’s a lot of planning. It’s like choreographing ballet.”
Kiely’s analogy to the pricing dance is the airline industry: first-class customers aren’t as price sensitive. “They want to get on when they want, they want their cocktail, and they don’t want to even hear any excuse regarding their luggage. For these people you jump through the hoops.”
“Business class” clients are more cost-conscious. “Then there is coach, and if there are ‘seats’ — empty trucks — you try to accommodate them.”
Long-time clients continue to stay loyal, he says, though you have to earn it every day. Keeping the fleet up to date and treating clients well is key, because the first time you don’t, the client turns to one of the other three guys trying to get their business. “We have tough competitors, so we can’t give our clients a reason to change.”
Kiely says some festival cancellations surprised him, though the premium acts continue to sell, come boom or bust. Taking care of them was more challenging this summer. Everybody wants more fuel-efficient, greener trucks, but selling the older ones has been tougher because credit in general has been tougher to get. But he enjoyed the summer.
“I’m happy to see Springsteen out,” he says. “Our top clients are Springsteen, Billy Joel and Jimmy Buffett. They constantly tour and they are first class in everything they do. Some of them have the same drivers for 20 years. Roadshow drivers are different because they get involved. It’s almost like having their own butler.”
He’s also picked up some new acts, including Alice in Chains and Kings of Leon.
Robin Shaw, Upstaging Inc.
“Thank God it’s been a fabulous summer for us,” exclaims Robin Shaw, vice president of Upstaging Inc. “Summers have been good the last five years, in part because of the demise of the recording industry. As everybody knows, bands have to tour more. Those bands have increasingly turned to us for production services.”
Shaw acknowledges the industry-wide challenge of price concessions, but reframes the issue as business-as-usual. “We’ve always been a company that works for our clients and with their budgets. This year is not different from others in that regard. We’re firm on our goal: quality service at a good value.”
While she admits that things are “more intense,” their handling of the subject is not. “We’re very successful at working things out. We provide a very specialized service. There’s a lot of risk associated with that, yet we’ve always been a company that provides the best service at the best possible price. This year is no different.”
Upstaging has successfully hung onto its clients, and Shaw reports that the vast majority continue to stay loyal. Upstaging has also added up-and-coming acts to its roster.
Asked if the live entertainment industry was recession-proof, the answer was yes and no. People still want entertainment, but the times call for artists to charge a little less. This causes everyone to be more careful about spending money.
Other organizations necessarily reevaluate the way they do business in particularly trying times. “We’re a big company, and we’re always concerned with everything from our basic finances to how we can be more environmentally friendly.”
Shaw smiles and shifts when asked for highlights, which is akin to asking which child is most beautiful. Finally she apologizes and admits she would be hard pressed to say, but adds, “We’re just grateful to work with all the amazing bands and crews out there we’re fortunate to partner with.”
Jim Bodenheimer, Ego Trips
“July and August was sold out — all of us were. If we weren’t, we’d all be in trouble.”
The owner of Ego Trips, Jim Bodenheimer, confirms that the summer “appeared to be normal.” The big tours were still big, the mediums were mostly still there … but the smaller tours have been affected by the economic downturn.
“What is different is the medium and smaller tours were not going to ‘C’ markets as readily as they would in a typical summer,” he says.
Some of the up-and-coming bands were having shorter tours and are certainly more price sensitive. Some bands that had two trucks last year whittled it down to one; those that had one cut back to a bus and a trailer. “It’s trickling from the top down.”
But he notes that, despite the fact that there was more competition for tours, there were also more tours.
Bodenheimer sees newer bands relying more on house rigs and local crew on the road and maybe just carrying the lighting console as opposed to the whole system. Bands that insisted on their own gear in summers past are now more readily agreeing to use the in-house gear in that casino or shed.
“The other thing that is happening is that, from the blank page, they are designing their tours in a manner that considers the cost of everything, which in this environment is logical. It’s the result of the current world economic situation.” Still, he expresses his gratitude for the “amazing loyalty” from their roster of clients.
Even so, in addition to more competition, there are noticeable gaps between the seasons. Where in years prior it was all seamless, now there’s some downtime — part of the aformentioned trend of acts not making it to “C” markets as frequently.
“We’ve been more aggressive in getting new clients as those gaps come up,” Bodenheimer says. “It’s just a harder year in general. Clients want to pay less when things cost more. It’s not a good combination.”
Still, he’s pleased with a roster of clients that includes Elton John, Jackson Browne, Steely Dan, Moody Blues, Bonnie Raitt and the Pretenders.
Loren Haas, Stage Call
“The concert touring business has been great,” confirms Stage Call president and CEO Loren Haas. “The highlight is that things are ‘status quo,’ business hasn’t fallen off.”
Stage Call clients Britney Spears, Keith Urban and Rascal Flatts continue to keep the company’s engines humming. Taylor Swift jumped from supporting act to headliner this year, which also contributed to a busy summer. “She’s got this great attitude about her,” he says. Swift represents a shift in the business for him: “Country is the new pop. There is no pop music any more — it’s almost all country.”
Everyone is watching the nickels and dimes, from the top artists down. One bit of “luck” happened right before the downturn. A few employees decided to leave on their own, and, “wisely, as if we had a magic eight ball, we didn’t fill those positions.” In addition to that, he acknowledges there’s been a layoff or two. But they are in good shape.
“The companies who win are those who watch their costs and keep things under control year after year. We have a history of that. Trucking is not a high-margin business.”
Fuel surcharges are a reality of the market place. For Stage Call, if gas suddenly drops during a tour, it’s likely that tour will get a rebate; if it suddenly spikes, additional cost is added on.
While Stage Call reports that their main clients have stuck with them, a few come and go. Sometimes it’s as simple as an artist switching production managers and the production manager having a preference. There’s an ebb and flow. “But we do have a full plate right now.”
When asked about the recession, Haas pauses, then says: “Was it not during the Depression when all the great theaters were built? People tend to want to have a good time when the economy is in a tough spot.
“What’s helping us is that artists get no support from recording companies any more, and CD sales are down. This means they have to go out on tour more often. When I worked for Vari-Lite I could get all my leads from Billboard magazine. When an album came out, there was a system: record, tour; record, tour. It’s not like that today.”
In addition to those already mentioned, Stage Call also supports Chicago, Jay-Z, Rise Against the Machine and the WWE.
