The “Renaissance Tour” is in full swing. It’s been 5 years since Queen B last toured the world to delight her fans. Her last tour alongside Jay-Z, “On the Run II”, actually dates back to 2018. With some 50 dates, the “Renaissance Tour” represents a more-than-anticipated rendezvous between the former Destiny Child and her BeyHive, but more importantly, her most lucrative tour yet.
In fact, according to Forbes, Beyoncé’s “Renaissance Tour” could earn her close to $2.1 billion – some $500 million more than Taylor Swift would earn with her “Eras Tour”, at close to $1.6 billion. The American magazine points out that these estimates are based on the number of fans who buy tickets at an average price of around $700. What’s more, these estimates assume that the artists mentioned win a considerable share of merchandising revenues and pay touring fees of 20% of revenues, leaving them with the remaining 80%.
While Beyoncé’s and Taylor’s tour revenues differ by only a few million dollars, their merchandising strategies, the shares retained of ticket sales and sponsorships help to better understand these amounts.
Merchandising strategies
Although they are rooted in different musical trends, Taylor Swift and Beyoncé have one thing in common: they are real businesswomen.
Businesswomen who, when it comes to making decisions on product sales and pricing, have a well-defined strategy. And it turns out, they have something in common here too. Indeed, Forbes journalist Peter Cohan reports that they both adopt a strategy of differentiation. According to the e-marketing definition, this means that, to stand out, they offer unique products that meet one or more of their fans’ needs (their niches). This increases fan loyalty.
But still according to Forbes, Taylor has a “more extensive” merchandising strategy. As David Herlihy, professor at Northeastern University and coordinator of the music industry program, explains: “On each site, she would probably sell 30,000 items at an average price of $80 per item. 70% would come back to her and the promoter”. Armen Shaomian, Associate Professor of Entertainment Management at the University of South Carolina, argues that “Swift’s goal is to create a lifestyle brand for a certain demographic. From a fan perspective, Swifties have access to a plethora of year-round fan merch options.” In addition to the 10 “Eras” albums she’s been selling on her website since January, Taylor offers “hundreds of merch items, from vinyl to activity books and ornaments”, he added.
Beyoncé, for her part, seems to be adopting a strategy that’s very much like her: that of scarcity. Her website, where fans can download her singles or buy vinyl, offers far fewer merch items than Swift’s, and generates less profit than hers.
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Beyoncé’s lack of online merchandising is one of the criteria driving her high concert ticket prices. “The lack of merch on Beyoncé’s online store could also be part of her strategy, as this tour-specific merch will only be available for purchase during her concerts, most likely at a premium price,” suggested Shaomian.
Tickets and sponsors
High average ticket prices… Here’s another thing the two stars have in common. Professor Shaomian reports on Forbes that Swift’s average ticket price was probably $700 or more. Beyoncé’s average ticket price could be $685 or more. Given the dynamic pricing, “these tickets sold for a premium”.
However, according to journalist Peter Cohan, Taylor Swift retains “a larger share of ticket sales than Beyoncé”. However, Bey’s percentage of “Renaissance Tour” ticket sales is close to that of her colleague. “Beyoncé could have an increasing rate (based on the number of tickets sold) or a fixed percentage per ticket,” explains Shaomian, who points out that in Ms. Carter’s case, sponsors and her production company help guarantee high revenues: “In Beyoncé’s case, sponsors include several large companies, such as CITI, Verizon and Tiffany. The entire production of her ‘Renaissance’ tour is managed by her production company, Parkwood Entertainment, and promoted by Live Nation, which directly brings in a larger percentage of revenues for Beyoncé.”
In short, Beyoncé gets so much because she’s Beyoncé. Even if her ticket prices don’t differ greatly from Taylor’s, who retains a larger share of ticket sales and does more merch, Queen B sells more tickets and can count on bigger sponsors as well as Live Nation to promote her tour, whose production company is none other than her own.