How to invest in Music Concerts & Festivals

Artists are re-inventing themselves. CD sales are down.  Music is being pirated left and right.  So what's the logically BEST way for an Artist to make money? A Concert!! Fans have NO CHOICE but to pay to see and hear them perform. 

David Vincent of Sankeys in Manchester, England, told Manchester Evening News “Artists are holding a lot more concerts now as they are not making much money from records anymore, so arenas are a growth area."

In the past few years, Mega Concerts and Mega Concert Promoters, like AEG and Live Nation, have shown sluggish sales and lack of profits. However, smaller venues and established concert promoters are seeing quite the opposite.

I spoke with Joe Fletcher, an established concert promoter who has promoted Motley Crue, Rascal Flatts, B.B. King, Hilary Duff, Kelly Clarkson, Korn, Lynyrd Skynyrd, 50 Cent, Eminem, Le Ann Rimes, Black Eyed Peas, Jimmy Cliff, Tori Amos, Snoop Dogg, Ludicris, Clay Aiken, Alison Krauss, Ani Di Franco just to name a few. Joe Fletcher has over two decades of experience promoting concerts. Joe stated that smaller concert venues have been filling up quite nicely.  As he explained, in this economic recession,consumers still want to go out and enjoy themselves, but rather than paying a $150 ticket, they're willing to pay a $50 or $60 ticket to enjoy a nice evening out. 

Horror stories abound regarding unscrupulous promoters taking investor's money and dissappearing.  The key to concert investments is WHO you invest with.  Joe Fletcher is an estabished persona in the concert promotion arena and he has an impeccable record.  Artists respect him, business people respect him, and managers respect him. 

"Pie in the Sky returns" aren't realistic.  One story I read clearly stated that the promoter offered double the investor's money.  When the promoter couldn't pay, investors cried fowl. 

What is great about concert investing is that the investment is very short term, usually around 3 months.  EVERYONE including the Investor(s) gets paid the night of the concert.  Investments range from $25K through $100K, and promise returns of 10% to 15% (realistically).  That would mean that in a year's time, should an investor continue to invest every quarter in a new concert, an investor can make a 40% return, conservatively speaking. 

Concerts do have a lot of costs which include (first and foremost) the Talent (Artist) and the Venue.  Then there's the ticket sales, seating arrangement, insurance, catering, staffing, etc.  These arrangements are coordinated by the Concert Promoter.  This is why the right promoter is the key to making sure the concert is a success. 

Lesson for the Day:  It's not how much you invest, but WHO you invest with.