New Promoters Struggle To Find Backing During Slow Economy

Sept. 17, 2012 - PRLog -- Promoting concerts or a big music festival is a dream many share. Unfortunately, many entry level wannabees think it’s just a matter of booking a venue, hiring a band and printing some flyers or building a Facebook site from their basement. Unfortunately, most will never see their aspirations come to fruition due to the high cost of admission.

Small start-up independent concert and music festival promoters don’t have the cash and in this economy, risk capital is almost impossible to raise. So most newbies think they will just secure some sponsors and use ticket sales. Not so fast.

Sponsors capable of contributing the cash required to power a concert featuring nationally known artists won’t participate in any event without the artists first being booked. They justifiably ask “who’s performing” before the conversation goes any further. If you are fortunate enough to impress a sponsor with a professional sponsor deck or proposal, there are 3 types of sponsors or combination thereof, cash, media or product and increasingly sponsors are only concerned with ROI.

If there’s no plan for the sponsor to receive and market their products or services, sponsors will pass. Even if a sponsor does agree to contribute cash, the transfer is not made before the event, it is customarily transacted once they see the bands are booked and web site is up.

“Using ticket sales monies isn’t an option either” says Hal Davidson, veteran promoter and festival consultant. New promoters find out Ticketmaster, TicketsWest and every other concert ticketing agency keeps your ticket sales money until after the show, sometimes up to 2 weeks, usually within 5 days of the event’s end. “They’ve just been burned too many times. Some used to allow you to use your own Visa/ Mastercard merchant account, and collect their fees along the way, but now they’ve even stopped that because in the case of cancelled event, the customer still looks to them for a refund.” Hal said and continued. “Ticketing companies can’t take the risk of paying ticket monies to promoters without knowing the outcome, just too risky. Due to the track record of promoters, the media also makes promoters pay up front for all of the radio, TV, print and billboards they buy.”

Promoters desiring to enter the marketplace need to keep two things in mind with regard to tickets. Have your event funded completely, and/ or consider funding it at least 70% and using your own merchant account or paypal to sell your own tickets that you either sell in hard tickets or purchase software for customers to print out or use their mobile device to purchase.  Then the the ticket sales money ends up in your company’s checking account within a few days. More than 80% of all tickets are purchased through either credit cards, debit cards or paypal (bank debit). “It’s still not advisable to promote a major event without 100% up front backing and if refunds are necessary, it’s all you. Lack of funding and knowing it before you start can later be considered fraud in most states” Hal said.

Davidson says there’s basically 3 ways to do concert ticketing:

1)   Using a ticketing agency like Ticketweb, Front Gate Tickets, Paper Bag Tickets, Ticketfly (specializing in mobile platforms and added online marketing methods), Groove tickets or many club shows use wanttickets. These agencies will manage your online and phone orders, you may then have then print tickets at a small fee for you to open independent ticket outlets at already existing retailers if their contract allows.

2)   Paypal, The promoter then pays additionally to print the tickets from a ticket printer like Quicktick based in Houston, staff their own phone, create a shopping cart and open authorized outlets if desired.

3)   Obtain a legitimate bank merchant account and additionally obtain a shopping cart capable of taking customer’s credit cards for ticket payment. (godaddy.com offers a credit card shopping cart linking up with Paymentech which offers credit card merchant accounts.)

Using options 2 or 3 offers the promoter total control over fees charged to the customer. The advantage to these methods is that the promoter can charge a relatively low fee covering the $2.75%-3.5% merchant bank or paypal charges plus any staff, ticket printing and shipping costs. Tickets can actually generate a profit and become an additional revenue stream for every event.

Which method the promoter chooses really depends on how involved the promoter wants to be and how much control over the funds a promoter needs to retain.
Whichever method chosen, it’s wise to have all 3 means of ticket selling: phone, internet and authorized retail ticket outlets (at least 10). You simply offer the outlet free advertising generating store traffic for being listed. They can ask for a service fee to offset any charges.  
 
“No matter what you do, always imprint “RAIN OR SHINE” and “NO REFUNDS” on every ticket. Davidson says.

Lastly, many venues have already existing contracts with ticketing companies such as Ticketmaster and there is no other option other than finding another unattached venue.
If new promoters want to maximize their use of ticket monies, they’ll seriously consider the options and decide whether they are comfortable in having a company hold onto their funds. In these times, the promoter needs to get every financial edge they can.

Hal Davidson is a Maryland, USA, based concert and festival consult available to promoters worldwide. He has promoted concerts, music festivals, Ringling Bros. Circus/ Ice Follies, Las Vegas Casinos, trade shows, resorts and retail chains since 1975.

His top selling all-inclusive manual, HOW NOT TO PROMOTE CONCERTS AND MUSIC FESTIVALS, and the simplified Concerts only version, are the best references revealing precious details of not just ticketing but all components involved with promoting concerts and music festivals. See www.concert-promotions.com and www.rentapromoter.com

This press release is copyrighted in 2012 by Hal Davidson and may not be used by other promoters on the web without written permission. All rights reserved.