Despite a precipitous decline in record sales across the music industry, the Dave Matthews Band continues to rock on with high sales and profitable tours.
The band (known affectionately as DMB) hits the road every summer. It makes the bulk of its money in tours.
Between 2000 and 2009, DMB sold more tickets to its shows than any other band. In 2010, that meant playing 62 shows in 50 cities to 1,270,477 fans—more than any other artist touring in North America.
What’s DMB’s secret to becoming one of the top-grossing music tours of 2010?
√ Cultivate enthusiasts by keeping price low. The average ticket price for a DMB show is just $58.79, compared with, say, $91.56 for an Aerosmith ticket. It offers fan-club members a large number of choice tickets, freebies and special deals.
√ Treat the product like a service, not a commodity. The band plays a predictable roundup of songs, but also improvises at each gig. Fans tend to hit up the tour every year, sometimes more than once. What they’re buying is an experience.
√ Keep it simple. At DMB concerts, there are food, merchandise and video portions. Mostly, though, there are just the jams and the fans, and they like it that way.
Compare that to the Lady Gaga tour, another top-grossing act, but one with extravagant costs that cut into the bottom line.
If the strategy sounds familiar, it’s because DMB is pulling a page from the Grateful Dead playbook, another band beloved for its music and admired by business-school professors.
Lesson: How can you cultivate more of a community among the “fans” of your business?
— Adapted from “Concerted Effort,” Annie Lowrey, Slate.