January 10, 2017
As the revenue for artists from CD and download sales, continue to plummet, touring income becomes more essential to their careers. And not just through ticket sales. Andrew Tenenbaum and David Berger launched Future Beat VIP Ticketing to optimize revenue through exclusive meet-and-greets and unique pre- and/or post-concert experiences. Not surprisingly, it's becoming more and more popular among artists and consumers alike. Here, Tenenbaum offers a "backstage pass" look at a bourgeoning enterprise.
You started out as an artist manager. Who did you manage ... and how has the business of artist managing change over the years?
I started out as part of the legendary management company Morra, Brezner, Steinberg & Tenenbaum. The company had an amazing, long run. The company handled Robin Williams, Billy Crystal, Woody Allen, the Beatles and we did some work with Paul Rodriguez (a client of mine to this day) and many more. The company was acquired in 2005 by Robert Sillerman's CKX, where I worked on some projects with their other divisions, 19 Entertainment, American Idol, Muhammad Ali and the Elvis Presley estate. I also worked as manager of estate clients such as the Frank Zappa and Marvin Gaye estates.
When did you get into the concept for VIP ticketing and meet-and-greets?
Probably sometime around 2008-09. During my management days, we of course put together tours. I was going out to set up merchandise for several tours and one of the merch companies asked me if I ever thought about doing VIP experiences. I had no idea what that was. In fact, a lot of people hadn't heard of it as it was still in its infancy.
I found it to be an intriguing business because income from recorded music sales had gone way down for artists even then. It's a lot worse now, so touring income is so much more important to an artist's economy. I thought this was a great idea. Also a growing number of fans had more discretionary income to spend on a greater concert experience with artists. Through that I met David Berger who would become my partner in Future Beat when we started in late 2012.
Were you a success right off the bat?
Yes, right off the bat. In 2013 we did 53 tours; 80 in 2014; 85 in 2015 and in 2016 we will do 120 tours. And right now, 2017 has not even started and we are way ahead of where we ever were at this point in time in the business cycle.
How do you measure success of a VIP event? The number participating ... the customer experience ... the artist reaction?
A lot of people look at the final artist settlement and figure out how much they made as a real measure of success, but we feel the true measure of success is in bringing a great experience to the fans as well as servicing the artist. We make sure both groups are beyond pleased. When we have happy customers - both artists and their fans - we know our results will be just fine. The benchmark that really shows customer satisfaction is the number of bands that come back to us tour after tour after tour. And we have a lot of repeat business.
Is this a uniform measurement of customer satisfaction, or do the specifics of the events determine customer satisfaction?
We measure both customer and artist satisfaction but each event is totally unique. Every artist has his or her own individual identity, brand and fan base. They're all completely different, but we have, of course, to learn from one tour what we can apply to the next tour. We're always evolving and improving the service we provide.
A number of artists are already doing some semblance of VIP meet-and-greets, yet you maintain that they could still be leaving money on the table. In what ways?
It can happen in two ways. First, we are now in an era where a bands' hardcore fans are expecting to be able to purchase a VIP experience. The expectation out there is that they know it's going to come at a premium cost - that they're willing to pay for -- as long as they get something totally unique, exclusive and special. But if you're not providing that exclusivity to your fans, that opportunity leaves money on the table.
The second way is when the artist is not using their ability to get some of the best seats in the house. When we work with an artist we will retain for them the front 10-15 rows that can be used to be put into VIP packages. You know what happens to those tickets if you don't use them; far too many of them end up being bought by scalpers for re-sale at a premium markup for themselves. Whether it's a scalper, StubHub or others in the secondary market, those profits are being taken out of the artist's economic ecosystem and put into someone else's pocket, someone who has no skin in the game. That is just completely wrong. It's really imperative that the artist controls that extra income. It should not go to the scalpers. We can get that income to the artists while at the same time we provide the opportunity to satisfy the fans who are willing to pay for a once-in-a-lifetime experience.
I can see this providing considerable income for arena-sized shows, but does your concept work in small clubs as well?
Yes. Actually, we do a lot of club tours for a lot of bands and artists that are just getting started. We don't just do arena shows, but clubs, amphitheaters and casinos across the board, working with a number of acts such as 2 Chainz and A$AP Rocky. The two very first tours we did in 2012 were general admission for acts that were just getting started in touring -- and a world of success was in front of them. When we work with artists like that, their careers build tremendously and we hope to continue working with them. Other acts are, of course, big arena names. We work with artists that perform in all kinds of venues and all genres of music.
How much advance time do you need to run a successful VIP concert experience?
The answer is we'd like to take as much time as we can get in order to create the optimum experience. The real and practical deadline is about a week in advance. We need to build a program on the venue's ticketing platform that generally takes at least a week before the on-sale date. But there are times when the artist comes to us significantly later - sometimes after the tickets go on sale. If they miss the on-sale date, we can still do what we call an "upgrade," where the fans buy the tickets themselves, then come to our website to buy a VIP upgrade that gives them backstage access but no ticket. But it's better to sell it together with the ticket.
What are the maximum number of fans artists should have for their VIP meet-and-greets?
You can get to a point of overkill when it comes to people going backstage, but it depends on how the artists want to conduct their meet-and-greets. We always want it to be exclusive, unique and special. In general, about 50-60 people is optimum. However, if the artist decides against doing a traditional meet-and-greet and wants to, for example, do a backstage party instead, you can obviously have more people. Another option is holding a soundcheck event. It all depends on what the artist wants to do. We are here to serve the artist. But if they want to do the traditional backstage meet-and-greet, you're talking usually about 50-60 people.
Have you seen your VIP experiences sold on the secondary market?
Rarely, although there have been a few exceptions to the rule. The reason it's a very rare occurrence is that in order to redeem your VIP tickets, you need to have the confirmation e-mail we send to the person who buys the ticket package from us. Plus, the ticket buyer's name is on the backstage list and we put very tight scrutiny on any changes. Of course, we do get customer service requests such as a death in the family or an illness; we deal with those things, but if I sold a VIP package to you in your name - and you try to scalp it - if the name of the person who bought it from you is not on the backstage list, he's not getting in.
Have you ever worked with radio station concerts, such as iHeartMedia's Jingle Ball tour?
We haven't gotten involved with the Jingle Ball-type of events; I'm sure iHeartMedia uses the events for their own special VIP packages and their own promotional reasons. They seem to use these events to promote themselves as much as creating an income generator.
What about concerts put on by mom-and-pop and/or small group stations that don't have their own tours?
We've never offered our services to an individual station, but that's an interesting idea.
Where do you see your future growth?
Sports events present interesting opportunities; we're looking at applying this concept to movie premieres. Another area we're seriously considering are Broadway and travel packages as well as exclusive corporate opportunities. This is a very scalable business that we could definitely increase. I feel we're just scratching the surface. There's a lot of room for growth and a lot of capacity for expansion.