When Billy Joel announced his open-ended residency at Madison Square Garden, it was an unprecedented arrangement that effectively made him the house band for the World’s Most Famous Arena. With a capacity of 19,500, that kind of commitment has big financial implications, as well as opportunity cost. Starting in January, he’ll be putting on one show a month for “as long as the audience demands.” Joel has already set a record for the most consecutive sold-out shows at Madison Square Garden in 2006, with twelve. Given that precedent, we decided to look at the prices and availability of Billy Joel Tickets residency and see if that offers some guidance about how long the run might last.
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When the residency was announced earlier this month, five shows were scheduled. An additional four have been added since. Based on the secondary market for tickets, his sixth show on June 21st is the most expensive. At an average price of $572, or 509% above the $112.50 average price for tickets directly from the box office. While Ticketmaster.com does have some availability for the first eight shows, they are all single tickets. The only show with pairs available is the September 7th show, which means that MSG isn’t having any trouble filling seats.
The average price trend on the Secondary market, however, may give us some guidance for how long the run could last. While the sixth show, in the peak of the summer concert season, is the most expensive, the eighth and ninth show have an average price decline of 39.8% and 29.7% respectively from that peak. Despite that drop, the cheapest show is still 328% above the average face price, which means that demand is outstripping supply significantly. If you’re wondering whether tickets are cheaper just because the event is so far off, it’s actually the opposite. In the ticket world, with a very few exceptions, ticket prices drop as the event gets closer. Tickets are after all, a perishable asset, and if the broker is left holding one when the event starts, it’s worth nothing. As a result, they tend to keep prices high when the event is farther out and less people are actually buying. As the event gets closer, and they get nervous about getting stuck with tickets, prices get lowered. BCS National Championship tickets are case and point. Over the last week, the average price for the biggest game in college football is down 26%. With over 7,500 tickets still left on the market, those prices are likely to drop further. In the context of Billy Joel, the first four concerts have dropped by an average of 34% over the last week, while the last four shows have had an average price increase of 7% over the last week. All this is to say that brokers will keep prices as high as they can for as long as they can. Below is a chart from our data analytics platform of the price (gray area) and quantity (blue line) for the BCS title game since October.
Regardless of what’s happening on the secondary market, from Madison Square Garden’s perspective, as long as people are paying more for the ticket than face price there’s demand to continue to run. If we assume that that there is a 30% drop in demand for every nine shows, by the 36th show, the average price on the secondary market would be around $130, or $18 above the face price– marked by the red line below. That’s the point at which Madison Square Garden and Joel will likely decide to wind down, as there’s nothing sadder, or less financially viable, than a Piano Man playing to an empty house.
Of course, it’s also possible that the percentage decline begins to accelerate after say 18 shows, which could mean that the run shuts down at around show 25. After 18 shows, a total of 351,000 tickets would have been sold to the run. That’s just about in line with the number of people in New York, New Jersey and Connecticut that like Billy Joel according to Facebook’s advertising audience segmentation tool. Of course, that doesn’t factor in the 50 million people that come to visit New York every year as tourists, many of whom are looking to get into a New York State of Mind. Cher is evidence of the power of tourism to sustain a residency. She played over 200 shows at the 4,100-person Coliseum At Caesars Palace and demand for Cher tickets didn’t let up. Tourist traffic should be enough to carry the Piano Man past 30.
There’s also another factor that will come into play when it’s announced that the run is coming to an end: scarcity. When it becomes clear that the open-ended run is coming a close, people will surely be rushing back to see the Piano Man one last time, which could mean another 5-10 shows, and a run that lasts into the forties.