Why Concert Prices in Israel Are So Much Higher Than Abroad

Posted on February 22, 2017 in Other Commentary and Analysis |
 
Originally published on the HAARETZ
 
Aggressive competition among promoters is bringing many big-name acts to Israel and creating a booming concert market, but the high cost of flying in the crews, security and expensive insurance policies keep ticket prices steep.
 
 
A few months ago, concert promoter Gad Oron flew to London to meet with Radiohead’s agent and manager, to try to convince the English rock band to play a concert in Israel. “They told me, ‘Israel? There’s no way right now.’ And now, not so long afterwards, another company has managed to get them here. Hats off to them,” says Oron, who has been bringing artists from abroad to Israel for more than 30 years.

In this particular battle, Oron was trumped by Naranjah, an upstart production company in the business since 2009 owned by promoter Eran Arieli, that before Radiohead had mostly imported much smaller musical acts. Radiohead’s concert will take place in July in Hayarkon Park.

The concert scene in Israel has lately become crowded and competitive. While the market used to be dominated by a few big producers who brought in a relatively small number of big acts from abroad, often earning complaints about the high prices being charged to see artists long past their prime, in the last few years the market has been changing and opening up. New production companies have been popping up, and besides increasing the number of concerts, they are bringing current top artists who are adding Israel to their official tour schedules.

The veteran concert promoters here include Shuki Weiss, who has brought the Pixies, Nick Cave, R.E.M., David Bowie, Morrissey and Madonna; Oron, who brought Jerry Seinfeld, Ricky Martin, Bob Dylan, Justin Bieber and Elton John; Udi Appelboim, who brought Justin Timberlake, Lady Gaga and Tom Jones; the Tzemach family, who brought Enrique Iglesias, the Scorpions and Simon & Garfunkel; and the Zappa Group (over the past 15 years), which brought the Pet Shop Boys, Mark Ronson and Suede. Besides Naranjah, the new production companies include Bluestone (run by Guy Beser and Shay Mor Yosef), which is responsible for bringing artists like Rihanna, Guns N’ Roses and Aerosmith.

Bluestone recently joined up with businessman Guy Oseary, who has worked with Madonna and others, to found Ticketmaster Israel – the local section of the world’s largest digital ticket-selling platform. Meanwhile, American entertainment giant Live Nation acquired a controlling share of Bluestone’s subsidiary, Bluestone Entertainment.

Due to the large number of promoters relative to the small Israeli market, the competition among them has often turned fierce, and has allegedly involved underhanded tactics at times – such as attempts to scuttle deals, fabricated offers being sent to artists abroad with the aim of raising prices, or the spreading of rumors that a rival producer cannot be trusted to make the necessary payments.

“Young and bold new players have gradually been getting into the market, and making offers to artists. There’s a lot of competition, which means the audiences and artists benefit,” says Oron. Beser of Bluestone says, “It’s a highly competitive market, and sometimes you see blows below the belt.”

All the competition also means a lack of coordination among promoters. This summer, there will be three shows aimed at a similar audience – Nick Cave, the Pixies and Radiohead, which will all vie for ticket-buyers’ money and affections. The addition of shows by Aerosmith and Guns N’ Roses means this summer’s competition will be especially tough, with all the promoters hoping to sell enough tickets to recoup their high costs. While such concerns are natural, for now it appears they have little to fear. Some 30,000 tickets have already been sold for Radiohead, and second shows have been added for the Pixies and Nick Cave.

479 shekels in Israel, 239 shekels in Glasgow

Big competition usually works to the benefit of consumers and causes prices to drop. The promoters do think that prices have begun to go down here, but the costs of bringing acts to Israel are still higher than in Europe and America.

A price comparison we did of shows abroad by artists due to perform in Israel soon found a disparity of 5-50 percent in basic ticket prices. For example, a ticket to Radiohead’s show in Israel cost 429 shekels in the pre-sale (these 25,000 are already sold out) and the current ticket price is 479 shekels. Tickets to the band’s Miami show on March 30 start at the equivalent of 246 shekels. Tickets to their June show in Florence start at 275 shekels, and for the Glasgow show in July, 10 days before the Tel Aviv gig, just 239 shekels.

Tickets for the Guns N’ Roses show in Hayarkon Park start at 355 shekels for lawn seats (295 shekels for Leumicard holders), but if you catch the band in Munich, you’ll only pay 328 shekels. In Australia, you’d pay 230 shekels, and in St. Louis, just 226 shekels. Tickets for Aerosmith’s show in Hayarkon Park start at 295 shekels, but go for just 220 shekels in Moscow.

The disparity in ticket prices for Nick Cave was the smallest that we found. A ticket to his Tel Aviv show starts at 234 shekels, compared to 224 shekels for his Detroit show and 168 shekels for his Boston show.

Naranjah cites high production costs to explain the ticket prices for Radiohead, but says that “given the high costs of transporting equipment and personnel from Europe and back, and the very high standards of the show, this is on average a low price for a park show of this magnitude. At last, Israel is getting a concert by one of the most important bands in the history of music, a band that is at its artistic and commercial height. Everyone will have the same chance to be close to the stage, unlike what usually happens with shows of this scale.”

High-priced concession stands

The promoters say ticket prices are higher in Israel due to the uniquely high costs involved: flying all the crew and equipment to Israel, erecting the concert venue and the expensive insurance. Yoni Feingold of the Zappa Group points out that when an artist does a European tour, he travels from city to city with tour buses and trucks. “To bring them to Israel, you have to fly everyone here and put them up, and fly in all the equipment, and it jacks up the costs,” he says.

Oron agrees. “In Europe, Radiohead moves from one country to another every other day. After the show everyone gets on buses and travels to the next city, so they can do several shows in the space of a week. In Israel, it takes two days just to do the setup, and the show only happens on the third or fourth day. And then they have to go back – so it’s just one show for the week, and that costs money.”

“The costs of setting up a show are huge,” says Beser. “In Hayarkon Park there is no infrastructure, so before every show you have to build everything from scratch – fencing, stage, electric lines, the backstage area. It’s not like in Europe, where there are big outdoor concert venues that have all the production infrastructure in place, and all you need to build is the stage. Also, insurance costs in Israel are high because of terrorism and wars. For the Bon Jovi show, we paid nearly half a million shekels just for insurance.”

Oron also mentions the sound and lighting companies. “In Europe they make a deal with the artist to do three months of shows, and here they only get to work a few times a month, so their costs are higher.”

The fees demanded by artists can also raise costs. A top artist can ask for anywhere from $1 million to $2.5 million, and artists sometimes want their fee to be based a percentage of the producers’ profits. The increased competition among Israeli promoters has also led to a spike in artists’ fees.

On average, the cost of bringing a successful artist here can reach up to 10 million shekels. Bluestone says they invested 16 million shekels to bring Rihanna, and a similar amount for Bon Jovi.

To cover the costs, promoters need to sell at least 30,000-40,000 tickets. According to Beser, producing a show at Hayarkon Park is generally the most expensive. “Just to cover the costs of a show there, you have to sell 38,000-43,000 tickets,” he says.

There is disagreement over the number of potential ticket-buyers in the country. Oron estimates there are just 100,000-150,000. Beser, says, however: “We’re not in Europe, but I think there are at least 400,000 potential ticket-buyers. About 50,000 people come to a show in the park. If there were only 100,000 buyers, there’d only be two shows a year, but that’s not the case.”

One cannot help wondering if the cut the promoters take doesn’t play a part as well. “It’s true prices are relatively high here, but the promoters sweat blood over the whole production,” says Boaz Cohen of radio station 88FM. “They’re taking a huge risk each time they bring an artist here. A promoter could end up taking home 4 million shekels, or he could end up losing his home.”

Oron says the stories about artists’ bizarre demands are more legend than reality. “I’ve been in this business since the 1980s and back then artists’ demands were a big deal, because we didn’t have a lot of things here. I remember someone requested Remy Martin cognac and I had no idea where to find it. And the artists today are pretty modest, they don’t have all that craziness. Seinfeld requested a certain kind of mineral water that wasn’t sold in Israel. We found someone who was able to arrange it. But it’s not like Seinfeld would have got up and left if I would have brought him [local brand] Mei Eden.”
 
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