Some arenas are devoting nearly a third of their business to premium seats and services
Taylor Swift performs during the "Eras Tour" at the Hard Rock Stadium in Miami Gardens, Fla., Oct. 18, 2024.
The concert industry increasingly lives and dies by superfans and higher-income consumers, widening the gap between the biggest artists and everyone else, according to Bernstein analysts.
The analysts made their assessment as concerns continue over the so-called K-shaped economy, in which the wealthiest consumers partake in "unapologetic luxury," driving prices for some goods higher, while others struggle more acutely with higher costs of living.
That divergence, the analysts said, has become particularly pronounced in live entertainment.
The wealthiest income bracket outspends the lowest by around four times overall but by around 12 times on entertainment fees and admissions, the analysts said. Similarly, the gap is widening between shows with the biggest audiences and smaller ones, they said, with the top 1% of shows accounting for around a third of total U.S. live gross sales last year, up from a quarter in 2019.
The top 10 U.S. headlining acts also grabbed a bigger share of those sales over that period, they said, adding that rising demand and limited capacity have allowed ticket sellers for those concerts to command a premium. Meanwhile, spending on smaller concerts has dropped, leading to more empty seats at those shows.
"A K-shaped consumer economy is feeding a K-shaped live entertainment market, in which a concentrated, high-spending upper echelon pulls away from a softening middle and bottom," the analysts, led by Ian Moore and Nosher Ali Khan, said in the note.
They added later that "a rising portion of the industry's revenue is being captured by a shrinking set of premium shows and artists."
That K shape, they said, has increasingly been molded by so-called superfans - artists' most devoted followers, who are willing to pay up for seats at the front of the house and VIP packages.
Superfans spend around 66% more on live shows than the average fan, the analysts said, and have become a barometer for music-industry trends. Twenty percent of U.S. fans qualify as superfans, the analysts found, up from 18% last year.
The analysts also said that 2% of an artist's fans account for around 18% of their music streams. A similar pattern, they said, could be seen in box-office sales.
"Premium tiers sell out and premium prices rise because high-quality engagement demand is concentrating in a scarce set of premium acts," the analysts said.
Against that backdrop, they said companies like Ticketmaster parent Live Nation and streaming giant Spotify are trying harder to court the biggest fans. Live Nation $(LYV)$ offers more amenities for fans who are willing to pay up, and some of its arenas have shifted their focus from general admission, now devoting nearly a third of their business to premium seats and services. The analysts also noted that Spotify (SPOT) in May launched a new service called Reserved, which allows some dedicated fans who subscribe to Spotify Premium to buy tickets before a general sale.
Artists have long complained that the big streaming platforms pay them far too little per click. And earlier this year, a jury found that Live Nation was an illegal monopoly, following years of criticism that the company stifles competition and overcharges fans, but analysts say a breakup is unlikely.
Since the economy reopened after pandemic lockdowns, costs for touring - the primary income source for many artists - have risen, making performing more difficult for smaller acts. Some artists have for various reasons canceled or postponed tours this year, and fans have noted the prevalence of empty seats at venues and on seating charts. Live Nation has increasingly looked abroad for growth amid signs of weaker trends in the U.S.
Meanwhile, the Bernstein analysts said that less popular artists, with fewer ways to stand out through elaborate live productions, face a bigger threat from artificial intelligence, which can be used to make music - although not every listener enjoys what they hear.
"This is a structural shift rather than a cyclical one: As AI commoditizes the low end, the scarcity of premium live only sharpens," the analysts said.
Despite those difficulties, the analysts said the biggest fans, and the biggest artists, still made the industry investable.
"For most of the industry's history, the superfan was real but hard to reach; that is changing," the analysts said.
Live Nation, Spotify and companies like TKO Group $(TKO)$, they said, offer "exposure to the same superfan dynamic captured through a different asset."
-Bill Peters
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
July 02, 2026 14:18 ET (18:18 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments