ENTERTAINMENT FACILITY STUDY August 14, 2018 City Council Briefing David Stone, Stone Pla n ning
LIVE MUSIC/ ENTERTAINMENT INDUSTRY TRENDS 2
LIVE MUSIC/ ENTERTAINMENT INDUSTRY TRENDS THE TOURING EVENTS INDUSTRY The live entertainment industry is thriving – music, sports, comedy, speakers, and other forms of entertainment o For music in particular, technology has increased the importance of live performances to artists: o Loss of revenue from physical sales o Number of concerts has increased dramatically o Increasing ticket prices and ticket sales o Top 200 tours: o 36% average 5,000 or fewer attendees o 18% average 5,000 to 7,500 attendees o Consolidation of promoters: o Live Nation sells 40%+ of worldwide tickets o AEG 12%, all others 46% o 3
LIVE MUSIC/ ENTERTAINMENT INDUSTRY TRENDS COMPARABLE FACILITIES The indoor/outdoor model is becoming more popular, particularly within broader mixed-use/entertainment developments o Facilities analyzed: o Columbus, OH Pittsburgh, PA Irving, TX Columbus Arena District North Shore Toyota Music Factory 5,200 outdoor / 2,200 indoor 5,000 outdoor / 2,300 indoor 8,000 outdoor / 2,500 and 4,000 indoor Adjacent venues: 300 and 400 seats Other indoor capacities: 400, 450, and 1,500 Performance: First 8 Months: 59 events, 3,400 avg. atten, $55 Performance: avg. ticket price Indoor/Outdoor: ~85 events, 2,100 avg. atten, Performance: $33 avg. ticket price Indoor/Outdoor: 100 events (70 indoor/30 outdoor), 1,800 avg. atten, $33 avg. ticket price The Basement: 85 events, 200 avg. atten., $14 avg. ticket price The Club: ~15 events, 270 avg. atten., $18 avg. ticket price A&R Music Lounge: 67 events, 290 avg. atten., $16 avg. ticket price 55 private events 4
FEASIBILITY AND ECONOMIC IMPACT STUDY SUMMARY 5
FEASIBILITY AND ECONOMIC IMPACT STUDY SUMMARY THE LOCAL MARKET Virginia Beach has 450,000+ residents, and the Designated Market o Area has 1.5 million residents The area is a major tourist market – 19 million “person trips” in 2017 o Characteristics of the DMA market compared to the US: o Demographics: o o Young – lower average age o Affluent – higher household income o Educated – higher percent of post-high school educations o Employed – higher percent of full-time employees Activities: o o More likely to attend concerts (rock, country, and hip- hop/rap) o More likely to attend comedy clubs 6
FEASIBILITY AND ECONOMIC IMPACT STUDY SUMMARY THE LOCAL/REGIONAL ENTERTAINMENT MARKET Multiple indoor and outdoor facilities host ticketed and free events in the area o Indoor facilities: o The need for a 2,500-to-3,500-seat venue at the beachfront was identified in 2002 o A new facility would compete somewhat with the Chrysler Hall and The NorVa, and to a lesser extent, the Sandler Center o Outdoor facilities: o A new facility would compete somewhat with Union Bank & Trust Pavilion, and to a lesser extent, Veterans United Home Loans o Amphitheater Free programming: there is a significant amount of free event offerings in the market, but the new venue is expected to complement o current offerings and work with the City to provide more 7
FEASIBILITY AND ECONOMIC IMPACT STUDY SUMMARY CONCLUSIONS AND RECOMMENDATIONS Virginia Beach/Hampton Roads is a strong and attractive market o Demand for live entertainment is increasing o The Event Center is sized to attract more than half of touring events o There has long been an identified need for a new indoor entertainment venue at the beachfront o Competition with existing venues (particularly within Virginia Beach) will be minimal o Market feasibility for 3,200-seat indoor venue and 5,000-seat outdoor venue o Flexibility with capacities and configurations o OVG’s involvement o Routing for touring events o Open booking policy o Built-in sound and light o Ability to host free and ticketed events outdoors o 8
FEASIBILITY AND ECONOMIC IMPACT STUDY SUMMARY OPERATING AND ECONOMIC IMPACT FORECASTS PR PROJECTE TED EVENTS TS AND ATTE TTENDANCE SU SUMMARY PRO FO FORMA ($000S) $000S) SUMMARY OF ECONOMIC/FISCAL L IMPACTS FROM OPERATIONS ($000s) # of Event # ents Av Avg. At Atten. To Total Atten. Op Operations ( (Annual) Op Operating R Revenues Total Spending - Direct and Indirect $18,249 Concerts - Indoor Reserved 30 2,167 65,000 Event Revenues $8,496 Total Jobs (Full-Time Equivalent) 105 Concerts - Indoor GA 40 2,719 108,750 Non-Event Revenues 743 Total Earnings $4,398 Concerts - Outdoor 20 3,600 72,000 To Total Operating Revenues $9, $9,239 239 Room Nights 20,970 Concerts - Minor 40 300 12,000 New Tax Revenues to the City $232 Other Ticketed Sports/Entertainment 5 2,250 11,250 Op Operating E Expenses Community Events 32 1,500 48,000 Con Construct ction on (One-Time) Private/Social Events 50 250 12,500 Event Expenses $6,641 Labor Expenditures $18,255 Festivals 3 3,000 9,000 Non-Event Expenses 1,497 Sales of Materials $7,947 Surf Park Events 3 500 1,500 Employment 314 Total Operating Expenses To $8,138 $8, 138 New Tax Revenues to the City $201 TO TOTA TAL 223 223 340,000 340, 000 Net Oper Net erating ng Inc ncome e (Loss) $1, $1,101 101 Source: Stone Planning Source: Stone Planning Source: Stone Planning 9
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