The music industry is in crisis. With album sales tumbling to record lows and streaming services paying fractions of pennies on the dollar, where is the money supposed to come from to keep the lights on and the hits coming?

One popular source, for major artists at least, is still the good old fashioned mega tour. Many artists seeing their album sales taking a hit are realizing the same fans who might be torrenting their music will still pay to see them live.

But is it enough? Are tours making up for lost album revenue, and can they work for acts besides the biggest and best?

This study dissects data from the top selling tours and albums of the last 34 years to see where the industry is heading. So how can a band not have a top selling album in decades and still blow everyone else away in tour revenue? And can tours really plug the gaping hole in music industry profits left by declining album sales?

Data: The Origin Story

For tours, I looked at a list of the top tours by decade since the 1980s and ranked them by their total revenue (adjusted for inflation), number of concert tickets sold, and average tickets sold per concert. Some decades had more high grossing tours than others, so there isn’t an even amount. Also, we counted tours by the year they began (some span 2-3 years).

Our album data was also obtained from the top grossing albums of each decade from the 1980s onward. We chose the top 20 albums from each decade including the 2010s so far. The data is broken up by albums sold and total revenue.

Album and Tour Revenue from 1980–2014: Where’s the Money Going?

To start, let’s take a look at revenue. That’s cash money, folks, from top albums and concerts.

In a way, this chart tells the story of the music industry over the last three and a half decades on its own. Album revenue is plummeting while tours are steadily bringing more. However, those rising tour revenues don’t even come close to compensating for what’s been lost in album sales.

For example, look at the top selling album in this study: Michael Jackson’s Thriller. Over its lifetime, that album has grossed over a billion dollars (yes, billion with a “b”). Compare that to the top selling album of this decade (the 2010s) so far: 21 by Adele. That album has so far grossed just over $262 million.

That means Thriller has nearly four times the revenue of 21. Granted, Thriller has also had more time to accumulate sales, but that certainly can’t fully account for these kinds of differences.

After all, the growth in the average revenue for the biggest tours from the 1980s to the 2010s isn’t that substantial. Here’s a chart broken down by decade so you can see what I mean.

This chart shows the averages for tour and album revenue by decade, and really clarifies the data shown in the first chart above. Tour revenue may be up by just over 50% over three and a half decades, but album sales are down by 84%. Starting from a higher position means that 84% shakes out to be a much more substantial slide.

It also shows that even before the dawn of the digital music era and tools like Napster, album revenue was still on the decline. It seems the changes brought on by the internet accelerated that decline, so that the numbers from the 2010s are a small fraction of what they were in the 1980s.

It’s also interesting to look at this on a bit more of a human level. That is, how have ticket sales relative to album sales changed? Take the money out of the equation and here’s what you get.

Ticket and Album Sales Telling a Different Story

First, bear in mind there are two different Y axes here. The difference in album and ticket sales is such that a single axis would make it impossible to see the relationship between the two.

With that out of the way, what do we see? Certainly not what you’d expect after seeing the first two charts. In fact, both album and ticket sales are down. Album sales may be declining more quickly, but the changes in ticket sales are still substantial. What does that mean and how is it possible given the increases in tour revenue?

If you haven’t guessed by now, it means concert ticket prices are on the rise while the average price of an album has decreased from almost $19 in the 1980s to just over $13 today. This does a lot to explain the divergence here — each concert ticket sold is bringing a greater return over time while each album sold is bringing a declining return.

So, if you take the Rolling Stones as an example, the price to see them live today is incomparable to what it cost in the 1980s. Even Burning Man has a VIP section today. So, it can hardly be surprising that the average ticket to a bigger concert is higher than it was a few decades ago.

Still, let’s try looking at the ticket and album sales numbers by decade.

The decade numbers show that concert attendance peaked in the 1990s before declining in the 2000s and increasing a bit again in the 2010s. So, while the overall trend is still downward, the trend lines (exponential regression for you nerds out there) mask these smaller changes decade by decade.

This reinforces the idea that concert ticket sales are not going to save the music industry. They may provide some artists with good revenue streams to balance lower album sales, but they don’t work equally well for everyone.

But before I get to that, what’s happening with album sales on their own?

Comparing Albums to Album and Tours to Tours

Once again, this chart comes down to both the overall decline in album sales and revenue. But it also tells the story of declining album prices. If you look closely, you’ll notice that revenue is declining slightly more than sales.

But regardless of whatever small details come out, this chart shows one thing and one thing only: decline. Personally, I’d be curious to take a look at vinyl sales more closely. They’re certainly on the rise but make up such a tiny portion of overall album sales that they aren’t even a blip on the radar of this study.

How then do these same changes play out in tours?

Tours tell a very different story. This links back to those increasing ticket prices. Here’s what we see: even while attendance is trending slightly downward, the revenue from those sales is on the rise. Again, bear in mind the different Y-axes here.

That may be a mixed bag for artists and record executives, but it certainly doesn’t sound great from a consumer perspective. Fewer people at shows that cost more isn’t going to inspire a lot of people to get out to a concert this summer.

Importantly, this study only looked at the top tours, so it’s possible this is a result of the decades-long trend of music de-aggregating. Instead of being dominated by a smaller number of top acts, it seems more and more artists are achieving some popularity without necessarily becoming superstars.

I can’t do more than speculate here, but it’s possible that the bigger mega-tours are selling fewer tickets to fans willing to pay more, while smaller artists keep the overall number of concert tickets sold at a steadier pace. A question for another study.

Still, all of this begs the question, who exactly is benefiting the most from these changes? This calls for bubble charts.

Truth in Bubbles: Who Benefits the Most from Top Albums and Tours?

Let’s look at the top grossing albums since 1980. You can see the revenue is pretty evenly spread out. Michael Jackson, Shania Twain and Whitney Houston take the three top spots. The difference between a top grossing album and a lower grossing album (again, these are among the top 20 by decade) isn’t nearly as significant as it is for tours (see below). How exactly does that difference translate into tours, bearing in mind the bubbles here are not to scale between the charts?

In short, the difference is enormous.

First, if you look closely, you’ll notice there’s not a ton of overlap between these two charts. Sure, AC/DC, Madonna, and U2 do fairly well on both, but look at the Rolling Stones — they may dominate tour revenue, but they don’t even appear on the top albums chart.

This tells a completely different story than the previous graphs. While album sales are comparatively evenly distributed, tour revenue gets sucked up by a smaller number of huge acts. This points to serious concerns over an industry becoming more and more reliant on tours to fund itself.

Even if tour revenue is increasing, it might not be trickling down quite enough. You heard me right, Reaganomics is failing the music industry. Let’s just hope streaming services can reform themselves enough to plug the hole.

Despite all of this, however, the numbers here are mind-blowing. Many of these tours go for two to three years, but counting revenue in the billions is still staggering.

Conclusion

What does it all add up to? In short: not enough. While there are some larger trends in the music industry which come to light with this data, what it really tells us is how, comparatively, the best of the best are doing.

Among that rarefied group the answer is mostly bad, with some important exceptions. Concert revenue is up, even if attendance is down. But, all of that goes out the window if you’re someone like the Rolling Stones or U2. Album sales are looking dismal for everyone.

Still, perhaps the slight pickup in overall ticket sales seen so far from the 2000s to the 2010s offers some hope. Someone is coming out on top here. It can just be difficult to see who it is.

What’s clear is that the music industry needs to do some serious reworking of its business model. It may not be donations à la Radiohead, or Rolling Stones style megatours (both of those models only work for a few select artists and groups), but after decades of decline the industry is running out of time to come up with something new.

If it can’t, there’s no telling how low these numbers may yet go.