Industry Economics: Soaring loonie hits high note with concert promoters

Sheri Levine, CanWest News Service

While the Canadian film industry could be hampered by the loonie’s parity with the U.S. dollar, the music industry is singing a much different tune. On Friday, the loonie closed at 99.92 and concert promoters say it’s the best thing that could happen to them.

“It’s fantastic for the concert industry,” said Jacob Smid, who, along with his company Emerge, produces concerts for Toronto.

Since a majority of artists are paid in U.S. dollars, a stronger loonie means concerts will be cheaper to book and, according to Smid, bigger names will be more enticed to play places they would never have considered before.

“The biggest part of any concert is the money we pay to the artists,” said Smid. “Now artists will be able to generate the money they need to and ticket prices will be more in line with U.S. prices.

“The more money there is to access, the more money there is to go around,” said Smid, adding, that since artist fees aren’t going to be as high, more show bookings can be expected, which will put more money in artists’ pocketbooks.

Although ticket prices won’t drop – “artists won’t make this a feasible option,” said Smid – prices aren’t going to go up either.

And, according to Smid, a lot more artists are already considering Canada in their touring plans.

“There’s a better chance of small markets seeing big names, which wasn’t possible five years ago,” said Smid. “There’s going to be a lot more concerts by more international artists touring across Canada, whereas before it was only Toronto, Vancouver and Montreal.”

Bryan Taylor is a concert promoter and co-owner of Keystone Music based in Calgary, one of the largest concert production companies in the country. Taylor also said Canada’s soaring loonie will make it easier for bigger music acts to come to Canada.

“It’s huge,” saidTaylor. “Our dollar being stronger means we’ll be saving in artist fees, which includes gas for travel, tour buses, flying, equipment trucks, it’s all part of the artist fees we pay,” he said. Taylor also expects there to be more concerts and bigger names playing across the nation.

However, it’s a different story for Canada’s film industry. American film and TV studios often head north of the border to shoot their projects because it’s less expensive. But with the loonie and U.S. dollar on par, Hollywood filmmakers may choose to stay home.

“It’s one of these things we don’t have control over,” said Peter Leitch, president of Vancouver’s North Shore Studios and Chair of the Motion Picture Production Industry Association of B.C. “With 80 per cent of customers being U.S. based we have to find other ways to compete.”

“At this point there’s not a lot that’s changed,” said Leitch. “It’s still busy, but there might be more of an impact next year when the new production season starts,” said Leitch.

While not facing the same potential problems as the film industry, a high dollar has some drawbacks for the Canadian music business.

When asked if there are any negative affects to having a dollar at parity with its U.S. counterpart, Taylor said it all depends on which part of the country you live in.

In Ontario, for example, the manufacturing industry suffers with a strong (Canadian) dollar, which impacts the ability for people to buy concert tickets.”

When it comes to ticket prices, Taylor said promoters are a big part of the bidding process to get acts to play their city. An artist’s booking agent and the promoter consult each other on the costs, and with a stronger dollar in the budget there’s no need to raise the price (of tickets).

“It would be nice to see savings passed on to the consumer and to see the ticket prices flatten out for awhile” said Taylor. “The more you can keep costs down the more shows will happen across the country.”

In terms of actual cash being spent for concerts by consumers, Smid said it’s going to be most obvious in the merchandise.

“The merchandise is going to be the most visible indicator of the currency exchange.” For example, explained Smid, the (Canadian) price of a T-shirt is now going to be even with the (U.S.) price.

Smid said it’s a “win-win” situation for everyone, the artists, promoters and consumers.

“Canadian music fans will have more access to live music. At this point, as far as live music is concerned, there is no downside to having a strong dollar.”

© CanWest News Service 2007

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