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Dude! Warped Tour sales are totally awesome

As music business flounders, alternative festival keeps getting bigger
/ Source: Reuters

When only 800 kids showed up to see 10 bands for the first performance of the 1995 punk rock extravaganza the Warped Tour, founder Kevin Lyman’s worst fears about his new venture seemed to be coming true.

The tour was a disaster, selling only 56,000 tickets that summer and landing a penniless Lyman back in his regular job of stage manager at a Los Angeles club.

But 11 years later, the punk and skateboarding tour employs more artists and crew than there were ticket buyers that first day.

The Warped Tour has become the largest and longest-running traveling festival in the United States, selling almost 700,000 tickets at $25 apiece last year and spinning off a winter version, the Taste of Chaos tour, even though it seldom features household-name bands.

“I never thought it would last this long,” Lyman, 44, told Reuters. “I should be a schoolteacher somewhere.”

As Warped grew, festivals like H.O.R.D.E., Lilith Fair, Smokin’ Grooves and Lollapalooza that relied on big name artists but charged up to $100 for tickets disappeared or downsized to one location amid a downturn in the concert business.

Last year, the top 100 touring acts sold a combined 36.1 million tickets, down 1.5 million from 2004 as average prices rose to $57 from $52.39, according to trade publication Pollstar.

While stalwarts like the Rolling Stones, who sold 1.2 million tickets in 2005, still filled stadiums, newer bands without radio hits looked to Warped for exposure.

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Ozzfest is the only other festival still on the road, piggy-backing on the perennial popularity of Ozzy Osbourne and Black Sabbath. But Ozzfest charges lesser-known bands tens of thousands of dollars for a spot on a secondary stage, while at Warped nobody pays to play.

Lyman, a workaholic former weight-loss camp counselor, pioneered the successful integration of corporate sponsorships with music and extreme sports. His tours relied on low costs, marketing savvy, cheap tickets and cooperation between bands.

Bands shared buses, equipment and crew, while sponsorships brought in 30 percent of gross revenues. Skateboarding shoe company Vans bought a majority stake in the tour.

“Try to do it without these corporate relationships and charge $25 for 100 bands. It’s impossible,” Lyman said.

Bands that only commanded niche audiences and would never be able to get anyone to sponsor their tours came together under the Warped umbrella to reach new fans who otherwise would never see them. The tour propelled artists like Sublime, Blink-182, Atreyu and even Eminem into the mainstream.

Now more than 1,000 bands clamor to get on every year. This year’s trek will hit 50 venues in two months, with performers like Joan Jett, Buzzcocks, The Germs and NOFX.

Meanwhile, just as U.S. CD sales fell last year to their lowest level since 1996 and major labels were dropping artists who weren’t delivering instant hits, Lyman started a record company.

He teamed up with Bob Chiappardi of Concrete Marketing, the largest U.S. independent music marketing company, to form Warcon Enterprises.

They thought the traditional music business model in which a few superstars brought labels massive amounts of cash while most artists lost money was unsustainable.

With Warcon, they wanted to slowly guide bands to successful careers even without massive hits.

“I want a band to become the next NOFX or Bad Religion,” Lyman said. “They’ve been doing it for 20 years and don’t depend on a gold record. With our label, 20,000 (records sold) is break-even, 50,000 to 100,000 is a home run — the band is making money and we’re making money.”

Among their first signings were Helmet and The Smashup.

In a break from the standard practice of giving a band 10 to 15 percent of album profits, Warcon bands got 50 percent after marketing and other costs. In return, they gave up a percentage of merchandise, touring and publishing revenue.

“It’s about being partners with the bands,” Chiappardi said. “We become involved in all aspects of their career.”

Some critics called the model utopian, others said the bands were being ripped off. Lyman responded by posting contracts on the Internet, telling bands not to contact him if they disagreed with the terms.

“It isn’t an overnight success,” he said. “I’m letting (bands) keep enough so they can all go buy a house and then they can start sharing back with the record label.”

Lyman himself tries to share back, supporting various high-minded issues every year with his tours. This year he wants Warped bands and crew to build houses for Habitat for Humanity and plans to run all his 40 tour buses on biodiesel.

Married and the father of two girls, he hopes eventually to get away from spending half a year on the road.

“I’d like to start a nursery and teach kids about gardening,” he said. “But I also feel obligated to keep what I’m doing going. It’s a great thing for our scene, a big umbrella that everyone works under.”