Riding High Through the Recession - What Jam bands can teach the Brands

By Rob Rush CEO, LRA Worldwide | May 19, 2010

A recent article in Forbes magazine described a Friday night this past June, when 15,000 fans descended on New York's Jones Beach Amphitheater in a torrential rainstorm to listen to the band Phish at one of the first concerts on their 2009 summer tour. Despite the downpour, hundreds of other fans with no tickets in hand roamed the parking lot hoping to get lucky and find a way in to this sold-out show.

Apparently no one got the memo about the recession.

While everyone is feeling the economic pinch, and album sales no longer factor in, the concert business is performing quite well, thank you. Leading the way are the niche "jam bands" like Phish, Widespread Panic and the Disco Biscuits. Remarkably, these touring jam bands reject the multiple-rights contracts and the "360 deals" offered by industry giants like Live Nation and Warner Music Group, in which the studio helps pay for and promote the tour in exchange for a percentage of ticket and merchandise sales. These bands keep their pockets full by relying on inimitable live performances, a symbiotic relationship with their dedicated fans, as well as imaginative grass-roots marketing campaigns that keep costs down and arenas filled. This unique ecosystem, built upon a strong trusting relationship between the bands and their fans, has formed a formidable emotional bond that transcends economic downturns.

How formidable? Despite the deepest recession we've faced in decades, Phish tickets went on sale back in March. Ten million ticket requests overwhelmed the ticketing website and 400,000 tickets were sold-out in a matter of hours. The haul? More than $20 million in ticket revenue for just three months of touring. And unlike a Madonna concert tour with 50-plus tractor trailers of equipment road-tripping to each tour stop, there are no extravagant stage shows or other costly burdens, just the music and the community, pure and simple.

In my opinion, these jam bands can teach other companies and brands struggling to make ends meet a thing or two about successful branding. Keep your value proposition simple and remain true to it. Get to know your customers well and take very good care of them. And when considering initiatives that might lead to short-term gain but perhaps devalue the brand and the customer experience, don't do it! Protect the house! You will not see In 'N' Out Burger acquiring a Mexican fast-food chain (like Wendy's with poor results) or selling out to McDonald's; you won't see Four Seasons Hotels investing in budget brands, no matter how appealing the deal; and you won't see Apple delivering any product that is not supremely elegant and well-conceived. Each of these legendary companies has nurtured very strong emotional connections with their customers. And it is the strength of this relationship that allows these companies to realize better margins by charging more for their products and spending less than their competitors on advertising.

When you enjoy this position, you grow your brand through word-of-mouth, and your customers stick with you. Like the Grateful Dead before them, Phish doesn't gouge its fans; Phish tickets sell for $50, well under the market and certainly well below what they could yield if they tried to squeeze the most revenue out of each show. Invariably, the "jam band" community allows its fans to record the concerts and share the music, which has only lead to more exposure for the bands and has turned fans into active collectors of great shows, even if the currency of my day - cassette tapes - is obsolete. They typically market through their own Website, where they keep their fans informed and facilitate the sharing of their music, not protection of their copyrights. (Who remembers Metallica vs. Napster?) It's reported that Widespread Panic gets 750,000 hits a day on their site on days when the band is on tour, and it's the sense of community and belonging the keeps folks clicking again and again.

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