head of AEG Live On the concert business (Live Nation, etc)
FORBES: Then what are the challenges for the next five to 10 years?
AEG’s Randy Phillips: In 2009 and 2010, our biggest challenge is the economy. I’m waiting for the other shoe to drop. I put two tours on this year–Britney Spears and Taylor Swift–and they both blew out. However, at some point this massive unemployment is going to bite us. I think it’s going to happen around June or July, when we start to put tickets on sale for the summer. We’re trying to determine what level of staffing and overhead we need for a decreased business model. That’s the biggest short-term challenge.
FORBES: What about long term?
Randy Phillips: My biggest concern honestly past the economy is where the headliners of tomorrow are going to come from. That’s scary. The record industry has so many of its own problems in terms of sales of music and how to make money on it, so they’re not really breaking acts at the rate we’re used to. At some point, supply and demand is going to catch up to us. The sweet spot in touring going forward is going to be the 5,000- to 7,000-seat theaters. I think the consumer would rather spend more money on something that means something to them in a more intimate setting.