U2 is in the midst of an eight-show run at Madison Square Garden, the last stop on their iNNOCENCE + eXPERIENCE tour before they head to Europe for the balance of the year.
I attended last Wednesday’s show and was blown away. U2 is still a force to be reckoned with musically, but they have also completely reinvented the arena concert experience with their stage and screens.
When tickets went on sale, I thought their pricing was somewhat aggressive. They were charging top prices for tickets in sections that are traditionally on the opposite end of the arena from the stage, as well as tickets in the lower part of the upper deck. The floor was being treated as general admission and very reasonably priced.
Once the layout of the stage was released, it was obvious why they felt they could charge more for the opposite end of the arena. They put a stage on that end also and planned to bring the show to that side of the building.
On top of that, they had screens that stretched from one end of the arena to the other, giving people on the sides of the arena, including the upper levels, perfect views. At several points in the show, Bono and The Edge were in the screens walking back and forth from the main stage to the smaller stage.
So what’s the lesson here?
U2 was able to bring the top-level experience to more people in the arena. Other bands have played on a B-stage, including The Rolling Stones and even U2 in the past. But the connector between the two and the screens made the room feel smaller. They turned Madison Square Garden into a club show.
The enhanced experience allowed them to charge more. They couldn’t move the seats closer, so they brought the show to the seats.
Landlords typically try to figure out how they can charge more rent and increase occupancy. The current trend in the market is to add amenities. But what if you have a smaller building and can’t add amenities? What if you don’t want to spend the capital on the front end, but still want to offer the tenants a better experience?
Bring the amenities to the tenants in creative ways or bring the tenants to the amenities!
If you can’t add a cafeteria, make a deal with a local restaurant to deliver and provide a discount within the building. If you can’t add a fitness center, have yoga or spin classes in a vacant space. Add a dry cleaner that delivers. Add a shuttle to take tenants to local amenities.
I predict that other bands will follow U2’s model, if not exactly, then certainly they will seek to mimic the way they were able to maximize the concert revenue. There are landlords in the market who are giving tenants better service and more amenities and I’d bet their buildings are outperforming the market. The next waive of creative landlords will figure out who to bring more to the tenant so they never have to worry about whether or not a tenant is going to renew.