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Concert Tour Success in North America: An Examination of the Top 100 Tours
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Article in Popular Music & Society · May 2007

DOI: 10.1080/03007760701267698

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Popular Music and Society
Vol. 30, No. 2, May 2007, pp. 149–172

Concert Tour Success in North

America: An Examination of the Top
100 Tours from 1997 to 2005
Grant C. Black, Mark A. Fox and Paul Kochanowski

Radio airplay, album sales and concerts provide revenues to songwriters, music labels,
and musicians. From 1997 to 2005, concert revenues in North America increased from
$1.3 billion to $3.1 billion. We analyze concert trends by investigating pricing and
attendance, the superstar phenomenon, and structural changes in the way the concert
tour industry operates. To conduct this analysis we look at the performance of the top 100
tours from 1997 to 2005. These data comprise a chart of sorts—an annual review of the
performance of the concert industry, with performers being ranked in terms of gross
concert revenues.

Introduction
Our research discusses the characteristics of the concert industry. Revenues from
concert tours constitute the ‘‘third stream’’ of income for the recording industry. The
sale of pre-recorded music and income from songwriting comprise the other two
income streams (Hull). While revenues from concert tours have increased in recent
years, sales from pre-recorded music and songwriting have declined in most years.
The concert industry in North America generated $3.1 billion in ticket revenues in
2005, up from $1.3 billion in 1997—an increase of 138% (Pollstar 2005 YearEnd
Edition). In contrast, sales of pre-recorded music have suffered major setbacks.
Global record sales have declined over the last four years, with 2005 sales of
$21 billion, a 3% decline over 2004 (International Federation of Phonographic
Industries). We have also seen a rise in music piracy, which deprives rights holders of
royalties and, arguably, has contributed to a decline in the sales of pre-recorded
music. The Recording Industry Association of America (‘‘Anti-Piracy’’) estimated
that music piracy costs the industry $4.3 billion per year.
Aside from comprising a major revenue stream, the concert business is also
important for artists’ career development. As Hall and Blau observe, ‘‘Concerts

ISSN 0300-7766 (print)/ISSN 1740-1712 (online) # 2007 Taylor & Francis

DOI: 10.1080/03007760701267698
150 G. C. Black, M. A. Fox, and P. Kochanowski

generate and maintain the audience for popular music’’ (33). This view is echoed by
Jodi Summers, who discusses the role of albums, radio, and concerts in building
momentum for an artist’s career:
In the real world of making a career go, album releases, marketing, touring, and
television appearances have to be synchronized. You want to have your record out
for a month or two before your tour starts so that you will have some radio airplay.
Obviously, you’ll want to go and gig in the markets where radio airplay is
happening—that’s called building momentum. (130)

Despite the size and importance of the concert industry, concerts have received little
attention outside trade publications such as Billboard and Pollstar. In what follows,
we provide a literature review of the concert industry. We then analyze concert trends
by investigating trends in pricing and attendance, the superstar phenomenon, and
structural changes in the way the concert tour industry operates. To conduct this
analysis we look at the top 100 tours in the years 1997 to 2005. These data comprise a
chart of sorts—an annual review of the performance of the concert industry, with
performers being ranked in terms of gross concert revenues.

Literature Review
This literature review explores two key issues regarding concert performances: (1)
Why do consumers attend concerts? (2) Why do performers give concerts?

Why Do We Attend Concerts?

In 1966 pianist Glenn Gould predicted the death of the concert. Writing in High
Fidelity magazine, he noted:
I predicted that the public concert as we know it today would no longer exist a
century hence, that its functions would have been entirely taken over by electronic
media. It had not occurred to me that this statement represented a particularly
radical pronouncement. Indeed, I regarded it almost as self-evident truth and, in
any case, as defining only one of the peripheral effects occasioned by developments
in the electronic age. But never has a statement of mine been so widely quoted—or
so hotly disputed.

In the discussion that follows, we will observe that although attending concerts does
have significant costs—including reduced sound quality, compared to pre-recorded
music—there are benefits to attending concerts that, for many, outweigh these costs.
We experience music in three major formats: (1) by listening to radio; (2) by
listening to pre-recorded music; or (3) by attending a concert. There is relatively little
research undertaken on the question of why consumers attend concerts (Hall and
Blau; Earl; Minor, Tillman Wagner, and Hausman). The earliest empirical study that
we could find on this topic was by Hall and Blau. Those authors examined a listing of
concert performances from a 1975 edition of Rolling Stone and attempted to explain
the existence of these concerts by population demographics (from United States
 Popular Music and Society 151

Census data). The total supply of concerts was influenced by populations with
significantly more young adults, with more women, with more white-collar workers,
and with more blacks. When concerts were analyzed by genre (eight different genres
were used), more differentiated markets were apparent. Hall and Blau concluded that
this was a sign that ‘‘various taste cultures seem to demand different types of music,
and each influences the total supply via this demand suggesting the potential for
cultural pluralism’’ (42). Hence, concerts were not targeted at an undifferentiated
mass, but the concert market in individual cities was a reflection of the underlying
demographics.
The view of concert demand that Hall and Blau explored is based upon inferring
aggregate consumer tastes. At the other extreme of analysis, Peter Earl—in a paper
based on personal introspection—applies the concept of Simon’s Travel Theorem to
attending concert performances. The theorem states: ‘‘Anything that can be learned
by a normal American adult on a trip to a foreign country (of less than one year’s
duration) can be learned more quickly, cheaply and easily by visiting the San Diego
Public Library’’ (Simon 306). Earl proposed that the consumption of live
performance is ‘‘similarly mysterious if the enjoyment of live music is framed only
in terms of gathering and processing information’’ (336). Based upon his own
experiences attending concerts, Earl proposed a number of disadvantages of
attending live performances, as well as a number of positive experiences that can
be associated with attending live music performances. We can usefully categorize the
disadvantages of attending concerts as involving: (1) economic costs; (2) sensory
costs; or (3) time-related costs. These costs are likely to influence whether we attend
concerts at all, or, if we do attend concerts, which venues we go to, which seating we
purchase, and which performers we see.

Economic Costs of Attending Concerts. Prima facie, attending concerts involves

significant economic costs when compared to listening to the radio (which is
typically free) or to listening to pre-recorded music (which is also free, for those
engaging in music piracy). Also, the purchase of pre-recorded music typically
involves a one-off cost that enables repeated listening of the recording being

Table 1 The Down-Side of Live Music Performances

Transport-related costs
Child-related costs
Poor sound quality and excessive volume
Difficulties in seeing performers
Disadvantages of social consumption
Undesired supporting acts
Limited editing opportunities
Monopolistic suppliers of food and drink
Source: Earl (344)
152 G. C. Black, M. A. Fox, and P. Kochanowski

purchased. In contrast, concerts involve one-off costs (e.g. the purchase of a ticket)
that provide access to only a one-off listening experience.
The economic costs of concert attendance fall into three categories:
1. Indirect costs that are necessary to facilitate attending the concert itself, e.g. the costs
of travel to the concert, costs associated with parking, and the costs of childcare for
those who attend concerts without their children.
2. Direct costs that are optional but are related to the event itself. In turn, we can
conceptualize these costs as those that relate to attendees’ comfort or enjoyment of
the event, e.g. the purchase of food, beverages, or drugs; or those costs that relate to
mementoes of the event, e.g. concert-related merchandise such as t-shirts, posters,
and compact discs.1
3. Direct costs associated with the purchase of concert tickets themselves.
The last of these costs is typically the major economic cost of attending concerts. For
example, in 2005, the average ticket price for acts in the top 100 tours in North
America was $56.88 (Pollstar, 2005 YearEnd Edition).

Sensory Costs of Consuming Live Music. In addition to the economic costs of

attending live concerts, audience members incur a number of sensory costs. With
regard to visual costs, we may not have an ideal view of the performer due to
obstruction from the concert venue itself, e.g. having our view blocked by balconies,
columns, or by large and/or tall individuals who are positioned between us and the
concert performer. In venues with general admission, such problems may be easier to
avoid—at least for those who arrive early at the concert venue. In contrast, if we were
to purchase a DVD of a musical performance then the views afforded us of the
performers would be superior to those that we would be likely to achieve were we in
the audience. Some venues attempt to overcome some of the visual costs of concert
performance by the use of large-screen monitors within the concert venue. However,
this filters the image of the performers through technology, thereby depriving fans of
the immediacy of a direct visual connection with performers.
We may also incur costs associated with touch—particularly at general admission
facilities, i.e. those facilities that do not have assigned seating. Here, people may brush
past us in order to obtain a better view, or in order to move toward people they are
attending the concert with. We may also be bumped into by individuals around us
who dance without regard for the space that we are occupying.
Attending concerts also has costs associated with our sense of smell. For example, we
may be exposed to cigarette or marijuana smoke, or to unwelcome scents from concert
attendees (these may include unpleasant body odors or fragrances that we either do not
like or that are simply overpowering). The restroom facilities at concerts may also
frequently provide further unwanted and unpleasant exposure to odors.
Finally, the audio experience of attending a concert is decidedly inferior to that of
listening to a digital recording. The quality of sound experienced by individual
audience members will be largely dependent upon:
 Popular Music and Society 153

N The equipment used by the band, including the quality of the sound mixing.
N The acoustics of the venue itself, and where the audience member is located within
that venue.
N Whether audience members wear earplugs.
N Other audience members, who may wolf-whistle, shout enthusiastically, or talk to one
another during a performance (or, using cell phones, to others who are not present).
By attending concerts we are also forgoing some control about what we listen to—the
performers decide the order of the songs we hear, and we may be exposed to songs
that we would otherwise wish to avoid.

Time-Related Costs. Time-related costs occur before, during, and after a concert
event. The time taken to purchase tickets (either online or at a ticket office in advance
of the performance) is the first such cost. The time spent traveling to the concert itself
is another such cost (in some cases the time spent traveling to the concert may exceed
the actual length of the concert).
The time spent in a line waiting to get into the venue (or being padded down by
security personnel) constitutes another time-related cost. Once we are inside the
concert venue itself, time-related costs are associated with queuing to get drinks or
food, to check coats, or to use the restroom facilities. Further, the band may not start
at the announced time and we may be exposed to music from an opening act that we
have no interest in hearing. After a concert, we also incur time-related costs in
traveling home, in waiting to exit the facility, and in exiting the parking facility.
On the face of it, the economic, sensory, and temporal costs that we have just
discussed appear to make attending concerts a decidedly unattractive proposition.
Or, as Earl observes, ‘‘Seen purely in these terms, the live music performance appears
to be a doomed product, destined to give way to recorded music which has none of
these price and non-price costs attached’’ (344). Earl proposes that the demand for
live music is associated with factors other than an interest in the music itself. This
begs the question: why would we attend a concert rather than just listening to an
artist’s recordings? It is this question that we will now explore.

Benefits of Attending Concerts. Live music has an energy and immediacy that is
difficult to capture on recordings (even if that pre-recorded music is of live
performances). The demand for live concerts is clearly evident when we observe that
the concert industry in North America is valued at some $3.1 billion per year. When
we attend concerts we are able to experience music with like-minded individuals.
Attending concerts provides a sense of community that is not present when listening
to music alone. A sense of community and hero worship appears to be strongest for
bands that have a fanatical following of their live performances, e.g. the Grateful
Dead, the Dave Matthews Band, or Phish.
Often, concerts are seen as a complement to listening to pre-recorded music. At a
concert we may learn things about an artist’s music that we were hitherto unaware of,
154 G. C. Black, M. A. Fox, and P. Kochanowski

including gaining insights into the meaning behind an artist’s work. We also gain the
opportunity to share judgments on the performance skills of artists with others.
Concerts may also permit the audience to hear performances of songs that have
not yet been released, are seldom performed live, or vary in some way from the pre-
recorded version. This is one reason bootlegs of some artists are so highly sought after
(Heylin). For emerging artists, whose ticket prices may be relatively low, attending
concerts provides concert attendees a means of sampling an artist’s work without the
commitment associated with buying pre-recorded music.
The advantages and disadvantages of concert attendance must influence not only
consumers’ willingness to attend concerts, but also consumers’ satisfaction with the
concerts they do attend. We could find only one empirical study examining the
determinants of consumer satisfaction with live concerts. This study, by Minor,
Tillman Wagner, and Hausman used a sample of 233 respondents from an unnamed
medium-sized, Southern city. The locale for the research meant that the authors were
evaluating live performances by local or regional musicians, rather than by superstars.
Respondents answered questions based upon a recently attended musical perfor-
mance that they were asked to visualize after the fact.
Minor, Tillman Wagner, and Hausman examined a total of 18 factors that were
found to have some relationship to audience satisfaction with concerts. Sound quality
and volume were ranked highest in terms of importance. The next highest-ranking
factors were musical ability and creativity—factors that are also associated with the
performance itself. Factors that were ranked in the middle order of importance
included two comfort-related attributes (temperature and seating facilities), and
other physical elements of the performance location (lighting and parking facilities).
Also of middle-ranking importance were factors related to audience enthusiasm, the
musicians’ interpretation of songs, familiarity of songs played, and social
compatibility—defined as ‘‘where audience members share the same experiences
and know they are sharing them’’ (12). Musicians’ appearance—their movements,
physical appearance, and clothing—had little relationship to overall satisfaction.
Having examined the motives for attending concerts, we turn our attention to a
discussion of why artists choose to perform live concerts.

Why Do Artists Perform Concerts?

Artists tour for three main reasons: (1) to earn money; (2) to expand their fan base;
and (3) to satisfy existing fans. Tour revenues are the bread and butter for most
artists. While recordings often generate the most hype, they are typically not a
significant source of revenue for artists. This is because most recordings do not yield
a profit—an estimated 80% of records fail to recoup their costs (Krueger). To
illustrate this point, consider that in 2002, 30,000 CDs were released, but more than
83% of these sold fewer than 1,000 copies; only 404 sold more than 100,000 copies
(Beach). Moreover, the costs associated with producing a record can be substantial.
For example, the Flecktones, a jazz/fusion band, report that their CDs generally cost
 Popular Music and Society 155

$100,000 to $200,000 to produce. This cost is fronted by the recording label in the
form of advances. The artist must recoup those costs before a band begins to receive
royalties (Graham). In addition to high production costs, it can take considerable
time for sales to reach a level where royalty payments are even seen by the artists
(Rothenbuhler). The Flecktones did not receive royalties on their first album, released
by Warner Bros Records, until after their eighth record.
According to John McBride, of Clair Brothers Audio, concerts can generate 75% of
any artist’s income, regardless of record sales: ‘‘If you want to work hard, you’ll make
a lot more money from touring than from selling records’’ (qtd in Jackson). For
example, as with many artists, the Flecktones have ‘‘never had a hit single, a gold
album, or substantial airplay,’’ and concerts make up approximately 70% of the
band’s income, with record sales generating another 20% and merchandise
accounting for another 10% (Graham). In other words, touring pays the bills for
most artists. This is the case not only for lesser-known artists, but also for most big-
name artists. For these superstars, touring provides a regular source of substantial
income.
In addition to its being a source of current income, artists tour because it can
expand their fan base, which, in turn, should increase future revenue streams. While
record sales are argued to be a significant determinant of concert success, the reverse
relationship also matters. Exposing more consumers to an artist through concerts can
increase the likelihood of additional record sales. For example, Clint Higham,
booking agent for Kenny Chesney at Dale Morris and Associates, designs tours based
on:
where Chesney needs to build his fan base and where previous tours have
stopped….A fan is a fan is a fan. You’ve got to hit Omaha, Nebraska, just like Los
Angeles. Some places might not be every-year markets, but you have to go there.
(qtd in Kipnis)

Artists also tour in order to maintain and strengthen the loyalty of their existing fan
base. While similar to touring to expand the fan base, this motive is, however, quite
distinct. Artist success is obviously strongly linked to the level of interest among
consumers—artist recognition, income, and career longevity are all influenced by the
size and characteristics of their fan base. Concerts provide a direct means for artists to
try to create and maintain an adequate fan base to support their careers. Experiencing
a live performance (and the related proximity to the artists) gives fans a different type
of satisfaction than simply listening to a recording by the same artist, as well as
creating a unique bond between fan and artist. These intangible qualities of a concert
contribute to fan loyalty by keeping artists visible before the public and allowing fans
to ‘‘interact’’ with them. Understanding the characteristics of the fan base influences
the structure of the concert and tour. For example, emerging artists appealing to
lower-income, young consumers may do more shows in smaller, less expensive
venues, while established artists with older fans may opt to do fewer but more
expensive shows in large venues. An extreme case of this phenomenon is the recent
trend that we see with some artists who do not tour but instead perform numerous
156 G. C. Black, M. A. Fox, and P. Kochanowski

shows in a single location. Examples of this phenomenon include Celine Dion and
Elton John, performing at Caesars Palace in Las Vegas, and the numerous acts in
Branson, Missouri.
Due to their focus on concert performances, many artists have remained highly
successful by maintaining strong fan bases. This is particularly true of established
artists and those artists with few or no new recordings. For example, long-time artists
such as the Rolling Stones, Elton John, and the Eagles have ranked among the top-
grossing concerts despite their lack of frequent new releases. Jackson described this
phenomenon as ‘‘baby boomer acts exploiting their legacies and the fact that they
have older well-heeled fans who will pay top dollar.’’
In the next section we introduce the source of data that we will then use to analyze
the concert industry for the 1997–2005 period.

The Data
Data were obtained from Pollstar magazine’s YearEnd Editions. These are published
in January of each year and summarize the performance of the concert industry in
North America for the preceding calendar year. The data we obtained were for top
100 concert tours for nine years, 1997 to 2005 inclusive.2 More specifically, the data
we collected for any given year include the following:
1. The rank ordering of performers (measured by gross ticket sales, in millions of
dollars), from 1 (highest ranking) to 100.
2. Gross ticket sales (in millions of dollars).
3. The average ticket price for concerts by the given performer.
4. The average number of tickets sold per performance (this was not available for the
years 1997 and 1998, so we calculated this figure by dividing the average gross by the
average ticket sales).
5. The total number of tickets sold by the performer.
6. The average gross for concerts given by the performer.

Our Findings
Recording sales represent by far the largest source of income for musical artists. In
2005, the retail value of recordings came to $10.5 billion, far exceeding the other main
source of artists’ earnings, concert tours, which amounted to $3.1 billion. Yet, starting
in the mid to late 1990s, the trends in these sources of artist income diverged.3
As shown by Figure 1, live performance gross revenues generated by all tours grew
by more than 100% between 1997 and 2005. In contrast, the retail value of recordings
decreased by 3% during the same period. Moreover, as previously noted, this
increasingly important source of artists’ earnings has received little analysis outside
trade publications. In what follows, we analyze concert trends by investigating trends
in pricing and attendance, the superstar phenomenon, and structural changes in the
way the concert tour industry operates.
 Popular Music and Society 157

Figure 1 Recording Sales and Tour Revenues

Attendance Increases vs. Ticket Price Increases

Recent discussion in trade publications such as Pollstar and Billboard has centered on
the dramatic escalation in ticket prices and the consequences this might have for
artists, promoters, tour venues, and fans. Emblematic of such statements is the
following taken from the 1999 YearEnd Edition of Pollstar:
Today, virtually every rock, pop, or country act appealing to an adult demographic
is charging premium prices for its best seats. The emphasis is on premium seats and
there’s plenty of them. Stones’ average ticket price was $109.62 and their top-end
price was often $300. Several pop acts charged $150 for their top tickets and the $70
and $80 arena ticket was certainly not a rarity. (10)

Figure 2 reveals just how dominant and important rising average ticket prices were to
gross tour revenues. For the top 100 tours, virtually all of the increase in gross
revenues between 1997 and 2005 can be attributed to rising ticket prices. Indeed,
ticket purchases rose only modestly over this period, increasing by about 4% and
declining in several years. Of course, ticket purchases are influenced by not only ticket
prices, but also by changes in concert goers’ incomes, their taste for attending
concerts, the quality of the concerts offered, the prices of substitute entertainment,
and the like. Nonetheless, basic economics would predict that—other things being
equal—such dramatic increases in price would have some negative impact on the
demand for concert tickets.
158 G. C. Black, M. A. Fox, and P. Kochanowski

Figure 2 Average Ticket Prices and Tickets Sold for Top 100 Tours

Industry observers have been greatly concerned that fans will be driven out of the
market and concerts will be characterized by many empty seats. Representative of
such comments are the following from the 2001 YearEnd Edition of Pollstar:
Ticket volume fell by 7%. The total number of shows done by top 100 tours was
also down 6%; ticket prices escalate again….pricing decisions are done act-by-act
and often done market-by-market. Agents all agree prices are too high, and far too
many acts are playing to far too many empty seats….If this trend continues the
industry faces the possibility of alienating key parts of its audience. (14)

According to this logic, the public will pay premium prices to see superstars but
will they pay these prices to see non-superstars? Indeed, an analysis of 2003 venue
data shows that Simon and Garfunkel (supported by the Everly Brothers) had the
highest average ticket price of any tour in 2003, $105.84, and performed to sold-out
crowds in nine of the 11 venues for which data are available.4 Further analysis of the
year-end data for the top 100 tours, when broken out by decile, indicates that, during
the period for which data are available, the top 10 tours always had higher average
prices than any of the lower ranked deciles (see Table 2). However, the largest
percentage increases in average ticket prices were in some of the lower-ranked tours.
For example, the percentage increases in average ticket prices between 1999 and 2005
for the top 10 tours was 78.6%, but for the tours ranked 51 to 60, the increase was
128.5%. These findings lend credence to the views of agents and promoters who
believe that demands for high concert guarantees (consequently leading to high ticket
prices), in some instances, has little to do with an artist’s talent. For example, Ray
Waddell, writing in Billboard, looks at the complaints of talent buyers: ‘‘Dean
Unkefer, executive director of International Entertainment Buyers’ Assn. (IEBA),
 Popular Music and Society 159

Table 2 Average Ticket Price Increases by Decile and Year

% Increase
Decile 1999 2000 2001 2002 2003 2004 2005 1999–2005
1–10 53.42 52.09 68.08 77.68 91.26 89.12 95.41 78.62
11–20 42.26 82.52 54.49 53.79 58.67 59.41 60.18 42.39
21–30 39.45 46.50 42.76 48.52 43.86 60.42 46.48 17.84
31–40 37.15 47.57 41.98 49.69 42.62 54.27 55.14 48.41
41–50 45.88 35.21 35.86 39.01 39.91 42.42 49.40 7.67
51–60 26.05 36.10 33.90 32.78 40.87 43.37 59.52 128.48
61–70 29.50 31.83 38.51 40.24 50.00 42.95 43.80 48.46
71–80 37.05 39.26 38.51 38.80 35.16 44.50 38.51 3.94
81–90 30.82 30.23 32.17 34.22 47.12 40.84 53.96 75.05
91–100 31.06 27.96 36.16 29.32 34.02 38.32 40.92 31.78
Top 100 37.26 42.93 42.22 44.40 48.35 51.56 54.33 45.80

recently observed in that association’s newsletter that ‘the pricing of an act seems to
bear no relationship to its ability to sell tickets.’’’ As mentioned above, industry
observers worry that the run up in ticket prices will scare off fans. Details in the
Pollstar top 100 tours provide some evidence of this.
Figure 3 provides percentage changes in average prices and average attendance per
show by decile for the period 1999 to 2005 (the only years in our data set where all of
the necessary data exist).5 For all top 100 tours, prices increased by 45.8% and
attendance fell by 6.5% between 1999 and 2005. The top four deciles (i.e. the top 40
tours) all lost average attendance as did the bottom two deciles (tour rankings 81 to
100). Nonetheless, tours in the middle rankings (tour rankings 41 to 80) had positive
percentage changes in average attendance. In some of these middle-ranking deciles,
the percentage increases in average attendance may be a consequence of price
increases that were relatively modest compared to other deciles (e.g. fifth and eighth
deciles). However, tours in the sixth decile (tour rankings 51 to 60) had the highest
percentage increase in average attendance and in average prices. Clearly, substitutions
among tours do occur as prices change between higher- and lower-priced tours. But
these results also may simply stem from anomalies in the composition of the data in
the base and ending time periods. In spite of the data limitations, our results appear
to be consistent with other studies of the performing arts that have found that live
performance demand is relatively insensitive to changes in prices.6
Qualitative characteristics of events often play a significant role in the demand for
live performance, thereby dominating price in determining demand (Throsby).
Examples of these characteristics include: the identity of the artist performing; critical
appraisal of the performer; and which works are being performed. This is evident in
Table 3, which presents a comparison of ticket volume, ticket prices, and top 100
Tour rankings for 35 artists who were in the top 100 in 1999 and 2005. Calculating
160 G. C. Black, M. A. Fox, and P. Kochanowski

Figure 3 Percentage Changes in Average Ticket Prices per Show, 1997 to 2005

the price elasticity of demand (the ratio of the percentage change in attendance and
the percentage change in price) indicates that 14 of the 35 artists had increases in
attendance in spite of increases in ticket prices, a clear indicator of the forceful role
played by non-price demand determinants. To illustrate this point, consider that
tickets for James Taylor’s concerts increased, on average, by 18% but attendance at
his concerts increased, on average, by 296% as his ranking in the top 100 tours rose
by 66 places.
Evidence clearly indicates that ticket prices have increased dramatically across the
distribution of artists and that ticket sales have remained far more constant during
the same period. What remains to be determined is who is capturing this rising
revenue stream from more expensive ticket prices.

Are the Rich Getting Richer?

The dramatic increase in ticket prices, particularly for star performers, has led some
industry commentators to see this as nothing more or less than ‘‘the rich getting
richer.’’ Sherwin Rosen argues that a combination of factors leads to highly skewed
distributions whereby a few people earn enormous amounts of money and dominate
the activities in which they engage. These factors include: differences in talent, poor
substitutability (lesser talent is a poor substitute for greater talent), attempts by
consumers to minimize their consumption costs, and economies of scale that allow
performers to supply a few, or many, consumers with the same costs (such as TV, live
 Popular Music and Society 161

Table 3 Analysis of Individual Artists Who Were in the Top 100 in Both 1999 and 2005

Change in % Change % Change in Price

Rank 1999– in Price Attendance Price Elasticity
Artist 2005 1999–2005 1999–2005 Elasticity Negative?
1 James Taylor 66 18.04 296.57 16.44 No
2 Santana 47 58.03 86.51 1.49 No
3 Vans Warped Tour 39 25.10 86.97 3.46 No
4 Bob Dylan 36 132.20 20.37 0.00
5 Barry Manilow 33 305.29 273.09 20.24 Yes
6 Mötley Crüe/Scorpions 32 112.29 7.21 0.06 No
7 Reba McEntire 28 50.22 339.61 6.76 No
8 Brooks & Dunn 21 59.54 38.21 0.64 No
9 Neil Diamond 15 70.97 21.78 20.03 Yes
10 Alan Jackson 13 87.39 58.06 0.66 No
11 Aerosmith 10 151.63 221.26 20.14 Yes
12 Celine Dion 10 148.75 275.81 20.51 Yes
13 Juan Gabriel 10 40.65 23.36 0.57 No
14 Jimmy Buffett 5 121.33 4.76 0.04 No
15 Vicente Fernandez 4 85.91 227.80 20.32 Yes
16 Elton John 2 102.65 222.73 20.22 Yes
17 The Rolling Stones 0 22.22 65.95 2.97 No
18 Dave Matthews Band 24 36.73 220.25 20.55 Yes
19 Tom Petty & The 24 5.17 41.15 7.96 No
Heartbreakers
20 OZZfest 26 8.31 21.53 20.18 Yes
21 Bruce Springsteen & The E 213 35.14 268.93 21.96 Yes
Street Band
22 Def Leppard/Bryan Adams 216 24.24 239.79 9.37 No
23 Journey 219 64.53 247.32 20.73 Yes
24 Widespread Panic 225 40.10 23.53 0.59 No
25 Cher 226 30.19 220.70 20.69 Yes
26 Tim McGraw 227 129.64 26.30 0.20 No
27 John Mellencamp 229 39.51 219.09 20.48 Yes
28 Andrea Bocelli 234 18.69 225.34 21.36 Yes
29 George Strait Country 234 35.05 270.54 22.01 Yes
Music Festival
30 The Allman Brothers Band 238 18.03 216.72 20.93 Yes
31 Rod Stewart 240 85.39 5.63 0.07 No
32 The Moody Blues 242 75.67 224.38 20.32 Yes
33 Backstreet Boys 244 15.39 271.09 24.62 Yes
34 Sting 248 236.04 86.10 22.39 Yes
35 ZZ Top/Lynyrd Skynyrd 264 17.08 262.83 23.68 Yes
162 G. C. Black, M. A. Fox, and P. Kochanowski

performances, or recordings). Numerous researchers (see Towse for a review of this

literature) have studied this phenomenon for the recording industry, though no one,
as far as we can find, has done this for popular concert tours.
Not unexpectedly, the Pollstar tour data provide strong evidence of the ‘‘superstar
phenomenon’’ for live performance. Even though the composition of artists changes
from year to year, the distribution of gross revenues for the top 100 tours for any
particular year is strongly skewed toward a few very large values.7 The distribution of
gross revenues of the top 100 tours for 2005 is shown in Figure 4. Each bar in Figure 4
represents an interval of $10 million of gross revenues, with the first bar representing
revenues of up to $10 million, the second bar between $10 million and $20 million,
and so on. The height of the bar is a relative frequency, which, when multiplied by
100, is a percentage: 32% of all tour artists had gross revenues of up to $10 million;
another 44% of all tour artists had gross revenues of between $10 million and
$20 million; another 11% of tour artists had gross revenues of between $20 million
and $30 million; and so on. Eighty-seven of the top 100 tour artists or groups had
gross tour revenues of $30 million or less. Five artists or groups had tour gross
revenues greater than $70 million and two groups, the Rolling Stones and U2, had
gross tour revenues greater than $150 million.
In spite of the dominance of superstars in every year of the 1997 to 2005 Pollstar
data, the conventional wisdom based on the analysis of escalating ticket prices does
not support the proposition that the rich are getting richer. If anything our data
suggest the opposite—that those in the lower part of the tour revenue distribution are
gaining relative to those at the top. Figures 5 and 6 both reveal this trend over the
1997 to 2005 time interval.
Figure 5 shows the proportion of revenues of the top 100 artists relative to all
concert revenues. One industry rule of thumb is that that the top 100 tours earn 80%
of all of the tour gross revenues—the 80/20 rule (Pollstar 2002 YearEnd Edition).
Since 2000, the top 100 tours have had a declining percentage of overall tour gross
revenue. In the final year of our data set, 2005, the top 100 tours accounted for about
66% of all tour revenues, even with the Rolling Stones’ gross revenues of $162 million
being the highest of any artist or group during the 1997 to 2005 period.
Moreover, Figure 6 illustrates that gross revenues, even for the top 100 tours, are
more evenly distributed in 2005 than in 1997.8 There are many possible explanations
for this, none of which can be easily determined from our data. One possibility,
investigated above, is that ticket prices have not only gone up for the elite artists or
groups, but also for artists and groups ranked lower in the top 100 tour distribution.
In some cases increases have been relatively higher for these lower-echelon tours.
Another conceivable explanation is that the quality or promotion of tours has
evolved in a way that favors artists or groups who are located more toward the
bottom of the revenue distribution than toward the top. Still another possibility,
known in economics as the ‘‘backward bending labor supply curve,’’ is that dramatic
increases in per show guarantees of the very top artists have resulted in those artists
performing fewer concerts.9 Artists-by-artists analysis over time would be required to
 Popular Music and Society 163

Figure 4 Distribution of 2005 Gross Revenues

Figure 5 Ratio of Top 100 Tours to Gross Revenues of all Tours

164 G. C. Black, M. A. Fox, and P. Kochanowski

Figure 6 Music Market Tour Concentration

investigate more fully any of the above. Unfortunately, detailed time series data for
tours not in the top 100 are non-existent.
In the discussion that follows we will explore the development of the concert
industry itself and the impact that this has had on ticket prices.

Discussion and Conclusion

We now turn our attention to a discussion of changes in the structure of the concert
industry and discuss the impact that these have had on ticket prices.
In modern times the most significant development in the concert industry has
been the widespread corporate consolidation in concert promotion and produc-
tion—as well as across record production and promotion throughout the entire
music industry. The 1996 Telecommunications Act opened the door for much of this
consolidation by easing restrictions on radio station ownership. Clear Channel
Entertainment is now the largest owner of venues and the biggest concert promoter
in the United States. Clear Channel operates in 63 countries, controlling more than
1,200 radio and 19 television stations in the United States. It also operates
approximately 770,000 outdoor advertising displays around the world (Beach). Clear
Channel and Viacom jointly account for 42% of radio listeners and radio industry
revenues. Consolidation has also occurred at the level of the music labels. Today, four
companies—Sony BMG, Universal, Warner, and EMI—control 90% of the recording
industry.
 Popular Music and Society 165

While this consolidation has occurred over the past several decades, it accelerated
rapidly over the past 10 years. Until the 1970s, concert promotion was largely
dominated by local and regional promoters (Hull). These entrepreneurial promoters
worked independently, frequently restricting themselves to a limited geographic area
of operation. The promoters faced considerable risk because they could not easily
spread that risk over a larger number of shows and artists. By the late 1960s, national
promoters began to emerge to reduce this risk.
In addition, artists began to realize that promoters yielded high profits on
successful shows. Successful artists argued for a greater share of those profits. This, in
turn, reduced the high profits small promoters needed to offset losses due to lost bets
on poorly performing shows. Artists simultaneously began to expand the size of their
shows, which required more resources than many small-scale promoters could
handle. This led to artists taking on the burden of organizing and producing their
own shows, which meant they incurred substantially higher costs. As a result, artists
required an even greater share of the revenues generated from their concerts. This
also created an incentive to increase the size of concert venues, which would allow for
more tickets to be sold. A byproduct of this move to larger venues was an increase in
the cost of producing a concert, in part due to growing artist guarantees, venue
booking fees, and insurance premiums. Ultimately, small-scale promoters continued
to lose revenues and their profitability declined, contributing to the gradual
concentration of concert promotion at the regional and national level. By the mid-
1990s, 20 promoters accounted for almost 74% of concert sales in the United States
(Hull).
Trends toward vertical integration and consolidation throughout the music
industry have directly affected the concert industry (see Boehlert’s articles for an
expose of Clear Channel Communications). There have long been ties between radio
stations and concert venues. Radio promotion helps sell concert tickets and being
associated with hot concerts contributes to the reputation, marketing, and visibility
of radio stations. Links between the recording companies, radio stations, promoters,
and venue operators have tightened as a result of recent consolidation. This creates
incentives for these controlling companies to target their own artists. For example,
the major record labels strongly influence which artists (and songs) receive airtime on
radio and television. This influence is often magnified when these companies own the
radio stations to which they promote their artists’ music. Consumer interest is
swayed by what they hear most frequently. The recording companies and promoters
design concerts and tours increasingly based on positive consumer feedback. The
process is more closely controlled when venues and concert promotion are owned by
the same firms involved in other aspects of the music industry. This vertical
consolidation has led to the organization and production of concerts being controlled
by a decreasing number of key players who play a role at many or all levels. Cross-
promotion across these layers is becoming increasingly prevalent and important as
companies that own radio stations choose songs to play because that will help
promote artists whose tours are being promoted by these same companies and will
166 G. C. Black, M. A. Fox, and P. Kochanowski

take place in venues owned again by these same companies. The proportion of ticket
sales captured by the top four concert promoters bears this out. From 1981 to 1996,
the top four promoters accounted for approximately 22 to 38% of all ticket sales; by
2001, their share had climbed to nearly 80% (Krueger).
This type of substantial vertical consolidation contributes to a system where access
to, and success in, the concert market increasingly relies on ties to the dominant firms
in the music industry. For instance, artists more often must contract a single
promoter to handle all concert locations, diminishing the need for contracts with
multiple promoters across regions (Jordan). Artists outside the promotional umbrella
of these firms find it more difficult to organize, promote, and produce concerts
successfully. At the same time, artists who find themselves under the umbrella likely
face higher costs. For example, concerts by big-name artists have tended to become
more expensive as production costs have risen, the scale of shows has increased, and
marketing activities have intensified.
The concert industry, however, has recently seen more structural changes. Due to
close monitoring and perhaps fewer actual economies of scale and scope than
anticipated, and high costs associated with attracting and retaining big-name artists,
some consolidation may be undone by several of the music industry’s key players. In
December 2005 Clear Channel spun off its concert division to form a separate
company, Live Nation. A year earlier, House of Blues Entertainment (the second
largest concert promoter) began analyzing the sale of its concert unit (Jordan). In July
2006 Live Nation agreed to acquire House of Blues for $350 million. This gives Live
Nation ‘‘control of virtually all of the nation’s major amphitheatres’’ (Speer).
Major recording companies have significantly reduced support funding and talent
development, which has weakened a previously key source of concert funding,
especially for emerging artists. Unlike in the past, most major recording companies
are no longer immediately creating tours to promote newly signed artists but are first
monitoring radio success and other indicators of consumer interest before selecting
certain artists to promote through concert tours.
This shift is increasing artists’ reliance on other sources of financial support for
concerts. Some artists may self-finance concerts, whereby they incur much higher
costs and assume greater risk. These factors reduce the profitability of touring and
increase the likelihood of losses. In addition to personal financing, artists are
increasingly seeking out corporate sponsorship. This may contribute to less artistic
freedom as sponsoring companies impose constraints on artists and use sponsorship
as part of their branding and marketing efforts.
Another form of consolidation has occurred in the concert industry in the past
decade. Ticket distribution has become highly concentrated and is almost exclusively
controlled by a single firm, Ticketmaster (Jordan; Krueger). Concert promoters
contract with a ticket distributor. The consolidation of distributors has coincided
with more exclusive arrangements between distributors and concert venues.
Ticketmaster, for instance, has exclusive arrangements with many venues throughout
the United States.
 Popular Music and Society 167

This was not always the case. Until the early 1980s—when Ticketmaster came onto
the scene—tickets were physically printed, distributed, and perhaps sold by the ticket
agent. This required consumers to go to a physical location to purchase concert tickets.
The advent of ‘‘soft tickets’’ by Ticketmaster allowed the distributor to sell tickets for
multiple events by networking the sellers, increasing the convenience and efficiency of
ticket distribution (Hull). Ticketmaster soon initiated exclusive agreements with
venues and promoters to capture a larger share of business. As an incentive to make
these arrangements, Ticketmaster sometimes agreed to give some of the service fee to
the venue or promoter. By the late 1990s, Ticketmaster had extended arrangements to
encompass credit card companies and recording companies.
The high concentration of distribution services among a few firms and the
prevalence of these exclusive arrangements may contribute to potentially higher costs
and limited access to venues for artists desiring to perform concerts. In response to
what it perceived as unfair service fees by Ticketmaster, Pearl Jam cancelled their
1994 tour. The band then found it was exceedingly difficult later to find venues in
which to perform due to Ticketmaster’s arrangements with concert venues.
Besides consolidation, the other predominant trend in the concert industry has
been the escalation of ticket prices. Several factors have contributed to this trend.
First, consolidation in the music industry grants greater market power to the
dominant players, allowing them to exercise greater control over price. By increasing
concert prices they may be able to increase revenues—particularly if those firms
control concert production and promotion and concert demand is relatively price
inelastic.
Second, sales of pre-recorded music in the United States have declined over the
past several years, falling from $14.32 billion in 2000 to $12.27 billion in 2005 (RIAA
‘‘Year End Statistics’’). This decline in sales is due to several factors, including the
rapid growth of downloadable music online, the shift in marketing strategies among
the handful of recording companies that focuses on creating big hits for selected big-
name artists, and fluctuations in economic conditions. One impact of lower record
sales is reflected in the increased importance of concerts in the formula for artist
success. This is particularly so for artists who are not represented by major recording
labels, for those who are not likely to become or remain big names, or for those who
do not have access to sufficient radio play. Princeton economist Alan Krueger
christens this the Bowie Effect, in honor of David Bowie, who said artists ‘‘better be
prepared for doing a lot of touring because that’s really the only unique situation
that’s going to be left’’ (qtd in Krueger).
Third, the artists themselves could be changing their preferences. Artists exercise
some control over ticket prices through their negotiations with concert promoters,
including demands for larger guarantees (Hull). The 2004 YearEnd Edition of Pollstar
notes that attendance declines and high ticket prices have led to changes in the
reward structure in the industry:
With rising artist guarantees being the main impetus for higher ticket prices, many
touring attractions were able to bank sizable sums even when their business didn’t
168 G. C. Black, M. A. Fox, and P. Kochanowski

warrant it. Just take the check and ignore the empty seats. Under the industry’s
current business model, however, promoters continue to face razor-thin profit
margins and financial losses even on shows at venues that appeared nearly full. (10)

Artists are also increasingly designing concert-related products to increase revenues

(Jordan; Krueger and Connelly). There has been a surge in VIP packages that
combine high-end concert seating with other perks. For example, Madonna sold a
VIP package for $700 ($400 above comparably priced seats) by offering a poster,
access to a VIP lounge, and a laminated concert ID tag.
Another explanation for rising ticket costs is the growth in service fees over time.
Service fees are added to the face value negotiated by the artist and concert promoter.
Common fees include the service fee added by the ticket distributor and fees for
parking and shipping. Consolidation in the industry may also contribute to the
growth in service fees. Those who control the artists and their promotion, or the
concert venues themselves, have an incentive to overstate costs and charge higher fees
to cover those costs.
Moreover, the true cost of a ticket has risen due to the explosion of ticket scalping.
Scalping has escalated largely due to advances in technology. The Internet has
allowed new and existing scalping markets to develop and rapidly expand. Online
scalping markets, such as Stubhub.com and Ticketsnow.com, and online auction
markets (e.g. eBay), reduce the costs of participating in scalping. This has expanded
the number of those choosing to sell or buy scalped tickets. Several years ago, the
majority of scalping was done by professional scalpers. Today many individuals
may choose to buy extra tickets and try to resell them online at higher prices
(Jordan).
Some experts already see reactionary changes in the industry’s thinking on pricing
policies. Not only does the concert industry face the problem of finding a multi-
tiered pricing strategy that fills empty seats and maximizes profits, but also the
industry must contend with blatant scalping of tickets that is made easier by such
Internet sites as eBay. To see how the Internet is changing ticket sales, we need only
look at eBay. About 4 million event tickets were offered for sale on eBay last year, by
professional resellers and fans. This year eBay is on track to sell even more tickets
(Walker). Although not all resellers make profits, the largest profits are probably
made on the most elite artists. Perhaps this accounts for these artists insisting on
increasingly large guarantees that allow them to skim off some of the windfall gains
going to Internet and other resellers. Given the growing prevalence of scalping and
online trading, it is likely that artists will increasingly search for ways to capture those
revenues. Artists are already experimenting with auctioning tickets to their own
concerts. From an economic perspective, these activities result in a loss of consumer
surplus and can create distortions in a market’s ability to provide a socially optimal
level of access to live performances.
In recent times Ticketmaster has used an auction framework to sell tickets for a
Sting benefit concert. Of course, as Leslie Walker observes, this has led to concerns by
some ‘‘[who] abhor the thought of Ticketmaster abandoning fixed prices in favor of
 Popular Music and Society 169

bidding wars. They consider prices exorbitant already and worry that the rich will
elbow out everyone else if they are allowed to bid up the best seats even higher’’
(E01). Nonetheless, Ticketmaster defends this new pricing paradigm.
it believes that its Internet auctions [dynamic-pricing software] will help sell more
seats and address some problems posed by scalping. If more people buy directly
from ticket agents they would be less likely to be fooled by scalpers selling
counterfeits, for example. Auctions also could put more of the profits reaped by
scalpers into the pockets of artists and their agents, [Ticketmaster Executive Vice
President] Goldberg said. ‘‘I think auctions will become a part of the way many
shows are sold in the future,’’ he said….And while [Ticketmaster] conceded that
auctions probably would push up the price of great seats, [it] contends that they
would reduce prices for mediocre and lousy rows so much that the net effect would
be to hold down ticket costs overall. (Walker E01)

There has been an increase in the number of entertainment venues throughout the
country, which provides additional opportunities for concerts. However, evidence
suggests that small venues may be providing fewer shows than in the past (Jackson).
Rising costs of producing and transporting a show are a significant factor in this
trend.
Moreover, most major acts do not tour outside the top 20 cities because concert
revenues tend to be considerably less in other locations. Artists choosing to tour for a
certain (or shorter) number of days typically try to perform at larger venues in larger
markets to get ‘‘more bang for their buck.’’ In addition, according to one venue
manager in Tucson, Arizona, concert goers in secondary markets are likely to be
more price sensitive than those in major cities, which can hurt revenues when average
ticket prices escalate (Kipnis). Promotion of concerts, including through television
and radio, also tends to be more limited in smaller markets. Moreover, as shows have
become more expensive to produce than in the past, many secondary-market venues
require artists to scale down their shows because these venues cannot accommodate
such large productions. This imposes greater costs on artists to tailor shows to
different markets. However, one offsetting feature of the lower expected revenue
stream is that secondary markets likely offer lower costs to produce a show. One
concert agent estimated that a show in Chicago faced a stagehand bill of $100,000,
while the same show in a smaller market would generate a stagehand bill of around
half of that (Kipnis).
In addition, half-filled venues hurt not only promoters but also venue operators
whose profitability largely relies on concession revenues. As Steve Knopper writes:
Why is it important to fill the venues, regardless of ticket revenue? Because fans will
pay for highly profitable parking, popcorn and beer. Clear Channel [which
promotes or co-promotes 75 to 80 per cent of the Top 200] often gives away large
blocks of tickets to poor selling shows—though they don’t officially acknowledge
this practice. ‘‘They do it a lot,’’ says Doc McGhee, manager of Kiss. ‘‘A promoter
can say, ‘I’d rather make sure the kid gets in for nothing and buys merchandise.’
And the band doesn’t share it. It’ll affect artists. It’s not a good business model.’’
(17)
170 G. C. Black, M. A. Fox, and P. Kochanowski

While evidence indicates that concert demand can often be relatively unresponsive to
changes in price, higher ticket prices may negatively affect revenues if other
determinants of demand play a more influential role than price alone. Increased
substitution between concert attendance and other activities could arise due to the
escalating relative price of concerts. If this causes some people to attend fewer
concerts, then concert revenues could decline and affect the breadth of artists touring
in the long run. As Jackson observes, ‘‘You don’t experiment at [a high] price; you go
to people you know you like, which hurts artist development.’’
Although the industry rebounded in 2005, escalating average ticket prices triggered a
not-inconsequential revolt by consumers in 2004, causing concert business to be 20 to
50% less in April than at the same time the previous year (Graham). Several big-name
concerts were canceled, including Christina Aguilera, Britney Spears, and Lollapalooza.
The Pollstar tour data reveal an industry in transition. The 2005 YearEnd edition of
Pollstar describes this state of disequilibrium: ‘‘[Ticket price increases have been]
fueled, in part, by the fact that ticket prices were an undervalued commodity, which
was evidenced by the huge markups the public was already supporting in the
secondary market’’ (10). In addition, the concentration in power in the promotion
end of the industry has intensified greatly as Clear Channel Communications has
taken over promotion of a great majority of the Top 200 tours. This part of the
industry is also in transition, as Clear Channel Communications recently severed the
promotions part of its operation from its radio holdings enterprise.
It is difficult at this juncture to predict exactly what will happen to ticket prices in
the future. The last decade has seen many industry observers question the current
business model. As the 2002 YearEnd Edition of Pollstar observed:
[Conventional wisdom holds that it is] better to sell out and turn people away than
to overreach and play a venue that can’t be filled. It was easier to achieve that goal
when ticket prices only varied by a few dollars from one act to the next. But that
gap has widened significantly in recent years. Is Peter Gabriel worth $76 and Bob
Dylan only $43? Is red hot Kenny Chesney only worth $26 while George Strait
wants $59?

….If you think of a tour like a tanker truck filled with milk, picture pulling into
town and passing out 60 percent of your load to thirsty locals and then dumping 40
percent into the sewer before moving on to the next city. (10)

Presumably, the market will eventually find a set of prices for each artist and market
that optimizes that artist’s and that market’s tour revenues. Mechanisms will also
undoubtedly evolve whereby artists will find a balance between capturing the full
value of their talent and not alienating that part of the public that gains from below-
market-priced tickets sold on a first-come-first-served basis.

Notes
[1] One interesting development in recent years has been the development of concert CDs—for
the concert just attended. During a 2004 tour by the Pixies, 20% of audience members
purchased such CDs (Conniff).
 Popular Music and Society 171
[2] Prior to 1997 detailed data were provided for only the Top 50 tours. We elected to
concentrate on the 1997 to 2005 period for the sake of having a consistent number of the top
tours to make comparisons from year to year.
[3] The recording data are for the United States and are found on the Recording Industry
Association of America (RIAA) web site <http://www.riaa.com/marketing data/facts.asp>.
[4] The other two venues had ticket sales as a percentage of total seating capacity of 87 and 99%,
respectively.
[5] Such computations must be viewed cautiously since the artists in each decile, as well as the
Top 100 artists, change from year to year. Moreover, there are very likely changes in the
venues played from year to year. Factors other than price also might be changing between
1999 and 2005. Having made these disclaimers, the results do suggest some negative
correspondence between price increases and attendance.
[6] David Throsby reports on studies showing that the price elasticity for Broadway theater is in
the 20.33 to 20.63 range; other studies of live performances are consistent with these
results.
[7] The superstar phenomenon suggests that the mean (the average) of the gross revenue
distribution would exceed the median (the middle value in an ordered array) since the mean
is pulled toward extreme values in the distribution. In every year starting in 1997 and ending
in 2005, the mean far exceeds the median.
[8] We have also calculated the Gini coefficient, a common measure of income equality. The
coefficient has a range of between 0 and 1, with zero representing a situation where everyone
has the same income and 1 representing a situation where one person has all of the income
and all others have no income. The Gini coefficient for Top 100 gross revenues tends to be
between 0.45 and 0.50, indicating a great deal of gross revenue inequality among the Top 100
groups. More importantly, the Gini coefficient has fallen from around 0.47 in 1997 to 0.42 in
2005.
[9] This perverse response to higher wages is well known for very high paid workers. Extremely
high paid workers can often reduce the hours they work and still earn the same or more total
income because of the higher fees they receive.

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