One of the biggest puzzles of my adult life was this question: Why do people pay to attend live events when broadcasts and/or recorded versions are free? Not only do people tend to pay for live events, the costs are extraordinarily high. Earlier this year, 32% of planned concertgoers expected to spend $500 or more attending events, a LendingTree survey found. The survey also revealed 38% of concertgoers were willing to pay more for better seats, up to $328 for their favorite artists. The average price for a Drake concert is $600 and for Taylor Swift it’s $2,424(!) Adding travel, accommodations, opportunity costs and transactions costs, the live event costs can easily run in the thousands per event.
And it does not end there. Live events offer an inferior experience. The seat location can be far from the action, acoustics can be poor and there is usually a lack of multiple angles or replays (in the case of sports) to see the details of the action. Often, spectators have to watch large screens in order to actually see what is going on. In other words, they pay a great deal to watch the event on TV even if they are at the event.
This puzzle came back to me also when attending the Apple Vision Pro launch at this year’s WWDC. Those of us watching it in person basically watched what everyone at home saw, but in a degraded outdoor screen experience complete with sun glare and wind noise. Of course, we also got to see the device up-close and some even got demos. But this was the exception. Most spectators at live events do not obtain access to the talent. They may get to chat with friends or meet new ones but that is entirely haphazard.
Now I know all the arguments about “presence” and the feeling of being a part of the event itself and the sense of occasion and shared experience that it generates. It’s something movie theater operates are trying to also convey even while they are screening recorded content. Clearly there is some value to this. But $3000 of value?
Let’s then assume that, since the market is always right, there is $3000 of value in a premium live event. Consider a season pass to top sports leagues. Consider concerts, night clubs and band gigs. Then there is the line of business that I happen to also offer: live talks and conferences. How does technology affect this particular form of content?
Well, I believe Apple has an idea. Apple, after all, invented the product-release-as-an-event. That is, Apple created event marketing–and everyone followed. Apple was first to know the value of the technology show business and in particular live show business.
But delivering such businesses is not reliably profitable. The more reliable business is ticketing–an annoying racket. Putting on the show is touch-and-go. It might be sustainable until costs rise due to the talent asking for a greater share, or other service providers following suit. It’s also difficult to stay on top as crowds are fickle and tastes change.
This is why I think Apple’s Vision Pro is at least partly aimed at “performance conveyance,” rather than the more crude “recorded media playback” job to be done. If this is so, then the business model that makes sense is to license rights to performances and deliver them. The same way that licensing rights to recorded content and delivery was the business model of screen-based devices.
So what does Performance Conveyance mean? Well, we have to look at performer quality, brand and the experience itself. If they come together well then Apple can say they deliver on the job of “live”. And if so, then they can charge accordingly. Hence, whereas Apple Music is $10/mo. or Apple TV is $10/mo. or a bundle of services is $30/mo., then why wouldn’t Apple Live be $300/mo?
If not subscription then perhaps à la carte payment for events: sports, concerts, et. al. In combination it’s not unreasonable that Apple with Spatial Computing and Vision will offer a new tier of service bundle pricing with an average revenue per user of $3000/yr.
That would certainly solve my puzzle.
[Edit: I forgot to mention the value of theme parks and (ersatz) tourism in general. Clearly this is such a powerful idea that industries have been created around it.]