Despite a summer of more festivals than ever and a diverse roster of touring superstars from Bruce Springsteen to Radiohead to Kanye West, the U.S. economic slowdown and $4-a-gallon gasoline are driving up ticket prices for many shows and could keep fans home. "The costs are increasing – that will get reflected in the ticket price," says Randy Phillips, president of concert promoter AEG Live. "And it's more expensive for people to go to things, so they've got to really pick and choose how they spend their disposable income."
Although no superhigh-priced, Rolling Stones-level act is touring this summer, more-affordable stars such as Eric Clapton, the Eagles and Jimmy Buffett have inched up their ticket prices compared to recent tours. For example, Clapton's June 2nd date at the Mohegan Sun Arena in Uncasville, Connecticut, is on sale for $125 to $195, compared to $85 to $150 at the same venue in 2006; the Eagles' three late-May dates at Madison Square Garden are $50 to $190, compared to $25 to $180 when they played there in 2005. "It's a constant battle," says Andy Cirzan, vice president of concerts for Chicago's Jam Productions. "Our goal would be to keep ticket prices constant so people could go to multiple shows."
Cirzan and others in the industry say declines in CD sales over the past few years have encouraged artists to make up the income through aggressive touring. But many managers dispute the idea that top artists raise ticket prices based on any factor other than market demand in individual cities. "'Gas prices are up and record sales are down, let's tour and raise ticket prices' – that's goofy," says Jim Guerinot, manager of Gwen Stefani and Nine Inch Nails. "Nobody does it that way."
Of course, many artists resist the economic pressure to increase prices – Tom Petty and Springsteen generally keep their tickets below $100, Dave Matthews Band tops out at $75, Pearl Jam is between about $42 and $77, and the Warped Tour is still in the $23-$37 range.
Festivals have become so huge in the U.S. that many in the concert industry wonder if they'll take over from the traditional summer model of bands playing amphitheaters. For now, the amphitheater business is healthy – Matthews, the Jonas Brothers, Buffett and Radiohead are among the acts selling well in these venues this summer. But the proliferation in U.S. festivals may be getting close to oversaturation.
Promoters postponed New Jersey's Vineland Festival before even putting it on sale, and Coachella in late April was attended by 160,000 fans, according to reports, compared to 180,000 last year. Many of this summer's major festivals have the same headliners – such as Jack Johnson at Coachella, Bonnaroo, All Points West and Outside Lands – and they may be losing their distinctiveness. "There's always a saturation point for everything," says Chuck Morris, the AEG Live promoter who is producing the July 19th-20th Mile High Music Festival in Denver, with Petty and DMB.
For now, festivals have given artists a different way to tour. Top acts from Nine Inch Nails to Petty plan their summer tours around festivals, which can mean crazy routing schedules that jump from Chicago to Western Canada and back. A few acts begin planning their tours with festivals and follow up later with headlining shows – Pearl Jam booked a short summer tour after deciding to play Bonnaroo, and the Flaming Lips are doing nine festivals, period. "When we put out a record [in 2006], we went out and played as many shows as we could," says Lips frontman Wayne Coyne. "This year, it's 'That sounds like a weird little festival.' Honestly, some [festivals] won't happen again – they'll lose a bunch of money – but some of them will."
This story is from the May 29th, 2008 issue of Rolling Stone.