Enjoying a night out at a concert can end up being an expensive endeavor to attend. Aside from buying a ticket before you get there, once you’ve arrived there are souvenirs to buy and refreshments to imbibe in.
Makes you wonder – how do concert venues make money?
Running a concert venue requires a lot of work and overhead to make the experience for customers unforgettable, so it’s no wonder most of these things are high-priced.
But how do concert venues make money?
In order to keep things running smoothly, concert venues must find ways to bring in extra revenue streams on top of ticket sales. Read on to see how concert venues make money.
How Do Concert Venues Make Money?
Here are 5 ways in which concert venues generate revenue:
- Refreshments and Food
- Venue Hire
- Merchandise
- Ticket Sales
- VIP Experiences
Let’s look at each of these revenue sources for a concert venue.
#1. Refreshments and Food
It’s not surprising that refreshments and food bring in considerable money for concert venues. A snack or drink from the bar is marked up to what may seem like an unreasonable amount for consumers.
Typically, a concert venue will have an outside vendor supply the refreshments, instead of handling the logistics of food and drinks in-house. The markup occurs because a concert venue must make some money off of sales of refreshments, in addition to the vendor who supplies the venue.
#2. Venue Hire
Venue hire can be the highest revenue stream for a space since it involves charging to use the venue. Different pricing and packages are made up by a venue in order to appeal to multiple acts that may want to perform and use the space.
There are two types of venue hire; dry hire and wet hire. Dry hire is when a venue is rented out only as a space, with no inclusions such as refreshments or services. Wet hire can include security, refreshments, and even decorations all provided by the concert venue and is more profitable.
#3. Merchandise
The merchandise that a band sells at their show is another good source of revenue for a concert venue. A portion of the sales of shirts, sweatshirts, and posters go to the venue, while the rest will go to the band that is performing.
While this might not seem like a high profit-earning stream for a concert venue, depending on the popularity of the performer, it can be quite lucrative.
#4. Ticket Sales
Venues who promote shows will also sell tickets for them, making a profit off of those sales. While ticket sales aren’t the biggest earner for concert venues, there is a small amount of money to be made off of tickets.
Most tickets are bought online through larger websites that make it easy to purchase safely. However, if a concert venue is smaller and does its own ticket sales, it will make a cut of the profit.
#5. VIP Experiences
Offering a VIP experience to concertgoers can be a profitable move for a concert venue. A venue can upsell better seats or access to a roped-off section close to the stage to consumers who are willing to pay top dollar.
These packages can include unlimited beverages and even food, depending on the venue. The high margin on these VIP experiences can be very lucrative since they are specialized and will likely only appeal to customers with money to spend at the venue.
Conclusion
So how do concert venues make money?
In this article, we reviewed some of the top revenue sources for concert venues. These include ticket sales, refreshments, and food and merchandise.
Concert venues also earn an income by charging for use of the venue and for any VIP experiences they offer concertgoers.
