Mar 26, 2012

A New Economic Forecasting Model?

As our readers likely know, one of our affiliated businesses produces small and mid-sized live music concerts. It's a strange industry, on both the front and the back end.

Many of our shows are in so-called "music rooms", which are a step above regular hang-out bars yet not seated theater type of venues either. They feature touring, original acts but their business models are still heavily reliant on how much beer, wine & booze gets sold at those shows. We don't own any such venues; we typically rent the room from them on a per-night basis. After that transaction, the venue keeps the bar $, we keep the door $.

Given our good working relationships, venue owners are willing to share their 'bar takes' numbers with us, for both our shows and others. It's interesting, how certain acts and genres generate numbers that can approach $15-$20 per paid admission, while others might fall under $5. Jam bands are on the upper-end, blues and jazz shows on the lower.

Our in-house sharpies have gotten very good at predicting both show attendance and that per-person bar revenue fig for any given show.

An interesting trend as of late: while our attendance predictions continue to be pretty damn accurate, our bar-take predictions have been coming up short lately. People that go to shows are spending more once they get there.

Yes, some argue that tough times turn people to drink. But, this uptick is a recent phenomenon, just within the last couple months. It therefore coincides with improving US macro-economic data in the same period.

Whatcha think: do we have a new forecasting model for the American economy here on our hands? Housing starts? Bl'ah. Wholesale inventory levels? Useless. Jobless claims? N'ah.

It's all about how much beer is being soaked-up at rock and roll shows. We'll call it the Jam Band Index!


1 comment:

The Kokomo Kid said...

Why not. The other ones don't really work so well do they?