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A marketing analysis and economic impact of Usher concerts

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  • 1. ACKNOWLEDGEMENTSA survey of this magnitude would not have been possible without thehelp and assistance of several individuals. The authors would liketo thank the following people and institutions:1. The Chief Financial Officer, Mr Justin van Wyk, for all his support, for allowing the research to be conducted and especially for providing the economic information.2. Ms Desti Loeijs for her kindness and for her help in providing the passes for the fieldworkers.3. Big Concerts for financial support.4. Prof. Melville Saayman for his support and for believing in the research.5. The following tourism staff and students from the North-West University for the distribution of the questionnaires at the Orlando Stadium in Soweto: • Ms B Manners • Ms M Thanjekwayo • Ms W Louw • Ms M le Roux • Ms N Thompson • Ms M Fourie • Mr Q Hanekom • Mr R du Preez • Mr S du Preez • Ms M Groenewald • Ms L Botha • Ms M Marais • Ms H Basson • Ms A Badenhorst i
  • 2. 6. The concert attendees for their positive attitude and participation in the survey.7. Rod Taylor for the language editing.8. Mr M Scholtz for front page design. ii
  • 3. Table of contents1. INTRODUCTION 12. RESEARCH AIMS 13. METHOD OF RESEARCH 24. PROFILE OF THE USHER CONCERT ATTENDEE 3SOCIO-DEMOGRAPHIC PROFILE 34.1 Gender 34.2 Age 34.3 Marital status 44.4 Home language 44.5 Province of residence 54.6 Level of education 64.7 Occupation 6ECONOMIC PROFILE 74.8 Number of people in travelling group 74.9 Number of people paid for 84.10 Local resident 94.11 Length of stay in the area 94.12 Number of tickets purchased 104.13 Expenditure 11CONSUMER BEHAVIOUR 114.14 Initiator of attendance 114.15 Decision to attend 124.16 Heard about the concert 134.17 Motivation to attend 15MUSICAL INTEREST 174.18 Number of musical events attended in 201 174.19 Preference of artists/bands/performers to perform in South Africa 184.20 Attendance at other music festivals 194.21 Preferred type of music 194.22 All time favourite artist/band/performers 20 21 iii
  • 4. KEY MANAGEMENT ASPECTS4.23 Key management aspects for a memorable visitor experience 215. ECONOMIC IMPACT OF THE USHER CONCERT 255.1 Total spending of attendees 265.2 Economic value based on SAM calculations 276. CONCLUSIONS AND RECOMMENDATIONS 336.1 Profile of the Usher concert attendee 366.2 Conclusions 376.3 Recommendations made by respondents 37 iv
  • 5. List of Tables4. PROFILE OF THE USHER CONCERT ATTENDEE 3SOCIO-DEMOGRAPHIC PROFILE 3Table 4.1: Age 4Table 4.2: Marital status 4Table 4.3: Province of residence 5Table 4.4: Level of education 6Table 4.5: Occupation 7ECONOMIC PROFILE 7Table 4.6: Number of people in travelling group 7Table 4.7: Number of people paid for 8Table 4.8: Length of stay 9Table 4.9: Number of tickets purchased 10Table 4.10: Expenditure per group (in ZAR) 11CONSUMER BEHAVIOUR 11Table 4.12: Initiator of attendance 12Table 4.13: Heard about the concert 13Table 4.14: Motivation to attend the Usher concerts at Cape Town and Johannesburg 15MUSICAL INTEREST 17Table 4.15: Number of musical events attended in 2011 17Table 4.16: Preference of artists/bands/performers to perform in South Africa 18Table 4.17: Preferred type of music 19Table 4.18: All time favourite artist/band/performer 21KEY MANAGEMENT ASPECTS 21Table 4.19 Key management aspects for a memorable visitor experience 225. ECONOMIC IMPACT OF THE USHER CONCERT 25Table 5.1: Total spending of event attendees 26Table 5.2: Total direct spending due to the event 27Table 5.3: Impact through output and GVA multipliers – attendees 28Table 5.4: Impact on output – event organisers 29 v
  • 6. Table 5.5: Total impact on regional output and gross value added 31Table 5.6: Total impact on regional income 326. CONCLUSIONS AND RECOMMENDATIONS 33Table 6.1: Profile of the Usher concert attendee 33 vi
  • 7. List of Figures4. PROFILE OF THE USHER CONCERT ATTENDEESOCIO-DEMOGRAPHIC PROFILE 3Figure 4.1: Gender 3Figure 4.2: Home language 5Figure 4.3: Local resident 9Figure 4.4: Decision to attend 13MUSICAL INTEREST 17Figure 5.4: Attendance of other music festivals 19 vii
  • 8. 1. INTRODUCTIONBig Concerts is South Africas premier concert promoter with over eighteen yearsexperience of more than a thousand shows, including those of Robbie Williams, U2, NeilDiamond, Roxette, James Blunt and Michael Jackson. They were recently included inthe Pollstar list of the Worlds Top 100 Promoters at number 20. No other Africanpromoter features in the Top 100. Big Concerts was also voted the Peoples Choice asSouth Africas top event company (The Star 2006). In the eighteen years that BigConcerts has promoted music in South Africa, the company has grown from one totwenty full-time employees and, today, almost every significant international tourpromoted in South Africa sees Big Concerts involved in some capacity.Usher Terry Raymond IV, born October 14, 1978, in Dallas, Texas in the USA is anAmerican R&B singer, songwriter, dancer and actor who rose to fame in the late 1990swith the release of his second album My Way. Currently, Usher is one of the best sellingmusic artists of all times, having sold over 65 million albums worldwide and has wonmany awards including seven Grammy awards. Apart from this, the RIAA has rankedUsher as one of the best-selling artists in American history, having sold over 23 millioncopies in the United States alone. Usher has attained nine Hot 100 number-one hitsand has attained seventeen Hot top-ten hits. He is particularly known his hits such asWithout, DJ got us fallin’ in love, YEAH, More, U got it bad, Burn, Love in this club,Confessions part II and You don’t make me wanna. This legendary music iconperformed in South Africa on Saturday, 10 March 2012, at the Orlando Stadium inSoweto where he kicked off the Hansa Festival of Legends.2. RESEARCH AIMSThis research project had the following primary aims: • To determine the profile of the visitors attending the Usher Concert at the Orlando Stadium in Soweto • To determine the spending patterns of the visitors at the event. 1
  • 9. • To determine what motivates visitors to attend Big Concerts events. • To determine the key management aspects for a memorable visitor experience • To estimate the economic impact of the event.3. METHOD OF RESEARCHTo achieve these aims, the following approach was implemented: A questionnaire wasdeveloped by TREES at the North-West University in cooperation with the eventorganisers, focusing on the following aspects: • Demographic data • Expenditure patterns • Consumer behaviour • Travel motivations • Musical interest • Critical Success FactorsVisitors were approached before the show and the fieldworkers explained the goal of thesurvey as well as the questionnaire. Based on simple random sampling, 414 visitorsformed part of the survey.The results from the respective surveys will be discussed in the next section. 2
  • 10. 4. PROFILE OF THE USHER CONCERT ATTENDEE SOCIO-DEMOGRAPHIC PROFILE4.1 GenderFigure 4.1: GenderAs shown in Figure 4.1, more female respondents participated in the survey at the Usherconcert in Soweto. Sixty seven percent (67%) of the respondents were female while 33%were male.4.2 AgeThe largest category of respondents who attended the Usher concert at the OrlandoStadium in Soweto were aged between 25 and 34 years (57%), followed by attendees 3
  • 11. between 20 and 24 years of age (23%). Respondents in the age group 35-49 yearsaccounted for 13%, whereas respondents aged 50 years and older accounted for 1% ofthe respondents. The average age of respondents at the Usher concert held at Orlandostadium in Soweto was 28.3 years.Table 4.1: AgeAGE PERCENTAGE< 19 6%20-24 23%25-34 57%35-49 13%50+ 1%Average age 28.3%4.3 Marital statusTable 4.2 indicates that the majority of the respondents at the Usher concert were single (45%).However, a significant percentage of the respondents also indicated that they were either in arelationship (not married) or married (25% each). Three percent (3%) of the respondentsindicated that they were living together whereas 1% indicated that they were either divorced orwidowed.Table 4.2: Marital statusMARITAL STATUS PERCENTAGESingle 45%In a relationship (not 25%married)Married 25%Living Together 3%Divorced 1%Widow/er 1% 4
  • 12. 4.4 Home LanguageThe majority of attendees at the Usher concert in Soweto were English speaking (63%) while32% of the respondents indicated other languages which included Sepedi, Sotho, Siswati,Tsonga, Tswana, Venda, Xhosa and Zulu (Figure 4.2). Only 5% of the respondents who attendedthe concert indicated Afrikaans as their home language.Figure 4.2: Home Language4.5 Province of residenceEighty percent (80%) of respondents at the Usher concert originated from the host province,Gauteng. Usher attracted respondents from all over South Africa as 7% came from KwaZulu-Natal, 3% from Mpumalanga, 2% the North-West province, Limpopo and countries outsideSouth Africa’s borders which included Australia, Botswana, Nigeria, Swaziland, the USA andZimbabwe.Table 4.3: Province of residencePROVINCE PERCENTAGEGauteng 80% 5
  • 13. Western Cape 1%Eastern Cape 1%North West 2%Mpumalanga 3%Northern Cape 1%KwaZulu-Natal 7%Limpopo 2%Free State 1%Outside RSA borders 2%4.6 Level of educationTable 4.4 indicates that the respondents at the Usher concerts were primarily well educated witheither a diploma or a degree (44%) while 19% of the respondents had matric as their highestlevel of education and 18% of respondents indicated that they were professionals. Sixteenpercent (16%) of the respondents indicated they had a postgraduate qualification as theirhighest level of education, whereas 3% of the respondents indicated that they were still scholars.Table 4.4: Level of educationLEVEL OF EDUCATION PERCENTAGEScholar 3%Matric 19%Diploma/Degree 44%Post-graduate 16%Professional 14%4.7 OccupationThe greater part of the respondents who attended the Usher concert in Soweto (46%) indicatedthat they are in professional occupations, followed by 17% who were students (Table 4.5). Tenpercent (10%) of the respondents indicated sales as an occupation, whereas nine percent (9%) 6
  • 14. were self-employed and four percent (4%) indicated that they were unemployed. Otheroccupations included an au pair, paramedic, production assistant, project manager, volunteerand a warranty clerk.Table 4.5: OccupationOCCUPATION PERCENTAGEProfessional 46%Self-employed 9%Technical 5%Sales 10%Work at mine 2%Civil service 1%Housewife 1%Pensioner %Student 17%Unemployed 4%Other 5% ECONOMIC PROFILE4.8 Number of people in travelling groupTable 4.6: Number of people in travelling groupPEOPLE IN GROUP PERCENTAGE1 person 3%2 people 26%3 people 14%4 people 22%5 people 13%6 people 5%7 people 3%8 people 3%9 people 1% 7
  • 15. 10+ people 10%Average 4.69Twenty-six percent (26%) of the respondents at the concert in Soweto travelled in a group of twopeople. However, a significant number of respondents indicated that they travelled in a group offour people (22%), three people (14%) and five people (13%) (Table 4.6). Ten percent (10%)indicated that they travelled in a group of ten people of more. The average size of the attendees’travelling group to the concert was five people.4.9 Number of people paid forTable 4.7: Number of people paid forNUMBER OF PEOPLE PAID PERCENTAGEFORNone 10%1 person 21%2 people 31%3 people 10%4 people 12%5 people 7%6 people 4%7 people 2%8 people 1%9+ people 2%Average 2.63 peopleAccording to Table 4.7, the greater part of respondents at the concerts paid for two people(31%). Paying for only one person accounted for 21% while 12% paid for four people and 10%paid for three people or were not financially responsible for anyone. The average number ofpeople for whom respondents were financially responsible at the concert was 2.6 people. 8
  • 16. 4.10 Local residentsAs shown in Figure 4.3, fifty-eight percent (58%) of respondents who attended the Usherconcert at the Orlando stadium in Soweto were local residents, whereas forty-two percent (42%)indicated that they were not local residents.Figure 4.3: Local Residents4.11 Length of stay in the areaTable 4.8 Length of stayLENGTH OF STAY PERCENTAGENone 54%1 night 13%2 nights 17%3 nights 9%4 nights 3% 9
  • 17. 5 nights -6 nights 2%7+ nights 2%Average nights spent 1.19As shown in Table 4.8, the majority (54%) of the attendees at the Usher concert indicated thatthey did overnight in the area. These respondents were likely to be local residents in the areawhere the Usher concert took place. Seventeen percent (17%) indicated that they spent twonights in the area. However, 13% indicated that they stayed one night in the area, whereas 9%indicated that they spent three nights in the area. Based on the average length of stay, attendeesto the Usher concert spent an average of one night in the area.4.12 Number of tickets purchasedTable 4.9 indicates that respondents to the Usher concert purchased two tickets (35%), followedby one ticket (22%), four tickets (13%) and three tickets (12%). Only 1% of the respondentsindicated that they did not buy a ticket. On average, respondents purchased three tickets toattend the concert.Table 4.9: Number of tickets purchasedNUMBER OF TICKETS PERCENTAGEPURCHASEDNone 1%1 Ticket 22%2 Tickets 35%3 Tickets 12%4 Tickets 13%5 Tickets 6%6 Tickets 5%7 Tickets 2%8+ Tickets 4% 10
  • 18. Average 2.974.13 ExpenditureAttendees at the concert had an average spending of R1 720.32 per group (Table 4.10). Thehighest spending category included tickets (R691.10), beverages (R242.68), food (R239.33),transport (R217.69) and accommodation (R210.82). It is clear that respondents did not spendmuch money on Souvenirs and merchandise (R38.77) and parking (R46.35).Table 4.10: Expenditure per group (in ZAR)ITEMS AVERAGE SPENT PER ITEMTickets 691.10Accommodation (if applicable) 210.82Food 239.33Beverages 242.68Transport (return) 217.69Souvenirs and merchandise 38.77Parking 46.35Other 33.57TOTAL 1,720.32 CONSUMER BEHAVIOUR4.14 Initiator of attendanceThirty-seven percent (37%) of the respondents at the Usher concert indicated that they initiatedtheir attendance themselves while others were initiated by friends (33%), family (11%) andrespondents’ spouses and the media (8% each). One percent (1%) of the respondents indicatedthat Usher’s website initiated their attendance to the concert. 11
  • 19. Table 4.12: Initiator of attendance PERCENTAGEINITIATOR OF ATTENDANCE YES NOSelf 37% 63%Friends 33% 67%Media 8% 92%Spouse 8% 92%Family 11% 89%Work 2% 98%Boyfriend/Girlfriend 5% 95%Other 1% 99%4.15 Decision to attendAccording to Figure 4.4, the majority (38%) of the respondents to the Usher concert made theirdecision to attend a month before, whereas 21% decided to attend when Big Concerts announcedthat Usher will perform in South Africa. Nineteen percent of respondents made a spontaneousdecision to attend, whereas 18% made their decision more than a month before. Four percent(4%) indicated that their decision to attend was made when respondents received a ticket as agift, a prize or were invited to attend the concert. 12
  • 20. Figure 4.4: Decision to attend4.16 Heard about the concertAccording to Table 4.13, respondents at the Usher concert indicated on a 4-point Likert scale theextent to which the different media convinced them to attend the concert.Table 4.13: Heard about the concertMEDIA PERCENTAGE NOT AT TO A TO A COMPLETELY ALL LESSER GREATER EXTENT EXTENTTelevision 21% 6% 15% 58%Radio 19% 8% 24% 49%Big Concerts’ 35% 17% 18% 30%websiteMagazines 34% 15% 25% 26% 13
  • 21. Newspapers 37% 14% 26% 23%Word-of-mouth 14% 9% 28% 49%Facebook 29% 9% 23% 39%Twitter 33% 12% 19% 36%Internet blogs 42% 13% 17% 28%Computicket’s 30% 10% 21% 39%websiteOther 48% 5% 17% 30%The following media influenced the respondents to attend the Usher concert to a greater extentor completely: • Word-of-mouth (77%) • Television (73%) • Radio (73%) • Facebook (62%) • Computicket’s website (60%) • Twitter (55%) • Magazines (51%)The following media were indicated to have influenced the respondents’ choice to attend theUsher concert not at all or to a lesser extent: • Internet Blogs (55%) • Other (53%) • Big Concert’s website (52%) • Newspapers (51%) 14
  • 22. 4.17 Motivation to attendTable 4.14 indicates the magnitude of the motivational aspects that respondents indicated on a5-point Likert scale of importance.Table 4.14: Motivation to attend the Usher concerts at Orlando Stadium in SowetoMOTIVATION PERCENTAGE Not at all Slightly Important Very Extremely important important important importantTo see my favourite artist 6% 3% 9% 18% 64%performBecause I got tickets free or as a 37% 12% 13% 16% 22%presentTo spend time with family, 14% 9% 17% 22% 38%friends or someone specialIt’s a sociable event 9% 7% 20% 23% 41%This concert is value for money 10% 8% 21% 21% 40%I try to attend as many of these 13% 12% 17% 17% 41%music events as possibleUsher is a well-known 5% 3% 12% 21% 59%international actIt is a unique, once in a lifetime 6% 7% 14% 19% 54%experienceI always wanted to see Usher 6% 5% 15% 22% 52%perform liveTo be part of this unique and 5% 5% 14% 24% 52%exciting eventTo have fun and because I enjoy 6% 6% 10% 28% 50%these types of special eventsThese concerts are entertainment 7% 6% 16% 23% 48%at its bestT o enjoy the music 6% 4% 14% 23% 53% 15
  • 23. For nostalgic reasons 8% 6% 17% 22% 47%For a chance to be with people 9% 6% 15% 25% 45%who are enjoying themselvesTo experience new things 9% 5% 14% 23% 49%These concerts enable one to 11% 9% 16% 23% 41%experience the possibility of theartist singing a song for the firsttime or a song that has not yetbeen recorded on CDBecause these concerts enable 12% 8% 17% 23% 40%one to get physically close to theartists when performing a songBecause I have seen this artist 24% 10% 19% 15% 32%before and wanted to do so againBecause the attendance makes 15% 7% 22% 21% 35%one part of the performanceBecause of social status in terms 28% 7% 19% 19% 27%of being seen by othersBecause of the possibility of 15% 8% 14% 21% 42%meeting the artist in personTo relax and escape from daily 12% 6% 17% 20% 45%tension and my busy everydayenvironmentTable 4.14 shows that respondents at the Usher concert considered the following motives toattend the event as important to extremely important: • To see my favourite artist perform (82%) • Usher is a well-known international act (80%) • To have fun and because I enjoy these types of special events (78%) • To be part of this unique experience (76%) • To enjoy the music (76%) 16
  • 24. • I always wanted to see Usher perform live (74%)The following motive was considered as less important to not important at all: • Because I got tickets free or as a present (49%) MUSICAL INTEREST4.18 Number of musical events attended in 2011According to Table 4.15, a significant percentage of the attendees at the Usher concert indicatedthat they attended one similar event in 2011 (25%) or two similar events (22%). Eighteenpercent (18%) of the respondents who attended the concert indicated that they did not attendany similar concerts in 2011. The average number of musical events attended in 2011 byattendees is 2.46 concerts.Table 4.15: Number of musical events attended in 2011NUMBER OF MUSICAL PERCENTAGEEVENTS ATTENDEDNone 18%1 event 25%2 events 22%3 events 16%4 events 6%5 events 5%6 events 1%7 events 2% 17
  • 25. 8+ events 5%Average 2.464.19 Preference of artists/bands/performers to perform in South AfricaRespondents indicated that they would also like to have the following artists/bands/performersperform in South Africa (Table 4.16):Table 4.16: Preferred artists/bands/performers to perform in South Africa SOWETO • Adele • Alicia Keys • Beyoncè • Chris Brown • Drake • Jay-Z • Justin Bieber • Lady Gaga • Mariah Carey • Nicki Minaj • R-Kelly • Rihanna 18
  • 26. 4.20 Attendance of other music events or festivalsThe majority of the respondents at the Usher concert (89%) indicated that they do attend othermusical festivalsFigure 4.5: Attendance of other music festivals4.21 Preferred type of musicAs shown in Table 4.17, the majority of the respondents at the Usher concert prefer to listen toR&B. However, respondents also indicated that they listen to pop, rap, reggae and jazz. It isnotable that the attendees at concerts such as Usher do not prefer music such as heavy metal,Afrikaans, folk/traditional, country, blues, rock ’n roll and instrumental. Other musicrespondents identified that they prefer to listen to afro jazz, afro pop, gospel, hip hop, house,kwaito and Latino.Table 4.17: Preferred type of musicTYPE OF MUSIC PERCENTAGE YES NOPop 42% 58% 19
  • 27. Punk Rock 11% 89%Classical 13% 87%Instrumental 16% 84%Jazz 21% 79%Blues 14% 86%Heavy metal 3% 97%Rap 34% 66%Rock ’n Roll 15% 85%R&B 65% 35%Reggae 21% 79%Country 8% 92%Folk/Traditional 7% 93%Afrikaans 4% 96%Other, specify 10% 90%4.22 All time favourite artists/bands/performersRespondents indicated the following artists/bands/performers were their all time favouriteperformers (Table 4.18): 20
  • 28. Table 4.18: All time favourite artists/bands/performers SOWETO • Beyoncè • Chris Brown • Lil Wayne • R-Kelly • Rihanna • Usher KEY MANAGEMENT ASPECTSRespondents to the Usher concert were asked to rate the importance of various managementaspects which they thought would contribute to a memorable visitor experience. Themanagement aspects where rated on a 5-point Likert scale where 1 indicated not at allimportant and 5 extremely important. The importance of these management aspects, referredto as key management aspects, can help management to improve certain aspects that visitorsregard as important to ensure a more satisfying and memorable experience in the future.4.23 Key management aspects for a memorable visitor experienceTable 4.19 indicates the importance of the Key Management Aspects respondents regarded asimportant: 21
  • 29. Table 4.19: Key management aspects for a memorable visitor experience PERCENTAGEKEY MANAGEMENT ASPECTS Not at all Slightly Important Very Extremely important important important importantAdequate, clean and hygienic 7% 3% 12% 17% 61%ablution facilities inside & outside thevenueEffective traffic control to and from 5% 3% 10% 19% 63%the venueFriendly and professional trained 6% 3% 13% 22% 56%staff in and around the venue that areeasily noticeableAppropriate gate opening time prior 6% 3% 13% 23% 55%to eventVisibility of emergency and security 5% 4% 10% 17% 64%staff in and around the venueCommunication of the adequate 6% 4% 10% 19% 61%safety measures/precautions in placeduring the concert in case of anemergency (e.g. evacuationplan/emergency exits)Adequate pre-concert performances 6% 8% 23% 22% 41%or pre-show entertainmentAdequate & effective marketing prior 6% 5% 14% 29% 46%to the eventVariety of marketing media used, e.g. 7% 5% 17% 26% 45%magazines, radio and postersCommunication about parking & 7% 3% 14% 23% 53%transport options prior to the eventUser friendly & accessible 5% 5% 16% 25% 49%information regarding the concerts,for example websites, radioadvertisements and postersCorrect information given through 6% 5% 12% 19% 58%marketing (e.g. date, time, venue,transport options)Good quality sound and lighting 4% 2% 9% 21% 64% 22
  • 30. Good all-round visibility and stage 3% 4% 9% 18% 66%layoutGood layout of venue and 5% 3% 11% 20% 61%comfortable seatingPunctuality of concert starting time 5% 6% 11% 20% 58%Affordable, variety, good quality and 8% 6% 14% 23% 49%easily accessible merchandiseFreebies from sponsors 12% 11% 17% 23% 37%Effective signage and directions to 6% 3% 17% 22% 52%concert venueAdequate parking at the concert 6% 4% 12% 22% 56%venueAdequate security at parking areas 5% 4% 11% 20% 60%Adequate information kiosks at 5% 6% 15% 28% 46%concert venueVariety of food and beverages (e.g. 7% 5% 15% 22% 51%Halaal, vegetarian, wines, softdrinks)Effective ticket sales prior to the 5% 3% 13% 24% 55%concert, for example online bookingsAffordable food and beverages at 6% 5% 12% 20% 57%venueAccessibility for the disabled 6% 4% 16% 18% 56%Effective regulated traffic flow after 7% 4% 8% 18% 63%the concertAffordable tickets 6% 6% 12% 19% 57%The opportunity to meet the artist 14% 6% 11% 18% 51%after the show, e.g. for photos,autographsAdequate ATM facilities 14% 6% 12% 18% 50% 23
  • 31. Table 4.19 shows that attendees at the Usher concert considered the following aspectsfor a quality visitor experience at these types of events as important to extremelyimportant:ASPECTS • Good quality sound and lighting (85%) • Good all-round visibility and stage layout (84%) • Effective traffic control to and from the venue (82%) • Visibility of emergency and security staff in and around the venue (81%) • Effective regulated traffic flow after the concert (81%) • Good layout of venue and comfortable seating (81%) • Communication of the adequate safety measures/precautions in place during the concert in case of an emergency (e.g. evacuation (e.g. emergency exits) (80%) • Adequate security at parking areas (80%) • Adequate, clean and hygienic ablution facilities inside & outside the venue (78%) • Friendly and professional trained staff in and around the venue that are easily noticeable (78%) • Appropriate gate opening time prior to event (78%) 24
  • 32. 5. ECONOMIC IMPACT OF THE USHER CONCERTThe economic value of any event is dependent on a number of factors, of which themost important are: • The spending by attendees and organisers. • The number of attendees. • The distribution of the money spent through the economy.The spending of attendees was determined by the survey, while the numbers ofattendees are based on ticket sales figures obtained from the organisers. Since theevents are funded from the ticket sales, no additional spending for organising theevents is added. However, ticket income is appropriated to different spendingcategories based on budget allocations obtained from the organiser. To determinehow the money is distributed throughout the economy, a number of methods can beemployed. The current research makes use of the Social Accounting Matrices (SAM)of Gauteng to determine this multiplying effect of spending.The multiplier concept is applied using economy-wide consistent data on a particular(regional/provincial) economy as is normally contained in a Social AccountingMatrix (SAM). SAMs extend the basic input-output concept from production toincome distribution and include both social and economic data for an economy. ASAM consists of data from input-output tables, national income statistics, andhousehold income and expenditure statistics. Contrary to national accounts, “… aSAM attempts to classify various institutions to their socio-economic backgroundsinstead of their economic or functional activities” (Chowdhury & Kirkpatrick). In thepresent case, the authors used a SAM for Gauteng Province, which was developed byConningarth Consultants. The SAM (based on 2006 prices) used in these analysesdistinguishes between 37 sectors, 12 household types and four ethnic groups. 25
  • 33. 5.1 Total spending of attendeesThe average spending by attendee groups was determined based on the survey data(see Table 4.10) and ticket sales. To determine the spending per person, the groupspending is divided by the average number of persons for whom the respondent isfinancially responsible. Multiplying the spending per person by the number oftickets sold (33 267) gives the total spending associated with the Usher concert heldin Johannesburg. This is shown in Table 5.1.Table 5.1: Total spending of event attendees (ZAR) Spending per Total spending personTickets 691.10 8,741,762Accommodation 210.82 2,666,675Food 239.33 3,027,293Beverages 242.68 3,069,652Transport 217.69 2,753,633Souvenirs 38.77 490,452Parking 46.35 586,268Other 33.57 424,622Total 1,720.32 21,760,357From the Table it is evident that the total spending by attendees of the Usher concertin Johannesburg almost reached R22 million. The greatest amount is receivedthrough ticket sales, while spending on food, beverages, accommodation andtransport are all items that exceed R2.5 million in total.Organiser spending stems from the income received from ticket sales (R8.74million). However, artist fees represent a substantial leakage from the South Africaneconomy, and are subtracted from organiser spending to reflect the true value of theevent. Table 5.2 indicates the spending of both organisers and attendees as well as 26
  • 34. total spending and represents the total direct impact of the event held inJohannesburg.Table 5.2: Total direct spending due to the event (ZAR) AMOUNT (ZAR)ATTENDEE SPENDING 13,018,595ORGANISER SPENDING 7,985,281TOTAL 21,003,876From Table 5.2 it is evident that the money spent in the Gauteng economy due to theUsher concert hosted by the Province, amounts to R21 million (i.e. the direct impactof the event). All spending stems from consumers, since spending by organisers (R8million) is funded from ticket sales. However, even when one excludes spending ontickets, the direct impact of attendees exceeds that of the organisers (R13 million).5.2 Economic value based on SAM calculationsAttendee spending is converted to the associated increase in production and incomein Gauteng using economic multipliers from a SAM for the Gauteng Province. Theclassical SAM multiplier approach employs distinct multipliers for each expenditure-related sector. The multipliers convert expenditure into the associated increase inoutput and income and estimate secondary effects as the participant/spectatorspending circulates through the regional economy. The Provincial Social AccountingMatrix 1 (SAM) was used to estimate the regional multiplier (direct and indirect)impact for Gauteng, which hosted the Usher concert.Attendee expenditureThe quantification of the direct and indirect impact of the attendees’ expenditure atthe event in the region is summarised in Table 5.3. As this expenditure is partially1 Social Accounting Matrices are an extended form of the basic Input-Output model. 27
  • 35. applied by the attendees of the event in the purchase of goods and services in theregion, this represents an inflow of money into the region, mobilising economicactivity, generating employment and generating additional revenues for the province.The total effect on the provincial economy is determined through multipliers, whichcan be used to determine the total effect on output (gross additional economicoutput) and Gross Value Added (GVA) 2. These multiplier measures are intrinsicallylinked, relating an initial direct stimulus to the final ‘multiplied’ impact generated.Output multipliers generally overestimate the impact of an event, due to doublecounting, while this is not the case when GVA is used. GVA only takes into accountthe value added by each industry due to the increase in demand in one industry.Value added in production (GVA) is measured by factor incomes in terms of thecompensation of employees and the operating surpluses of firms, and can thereforebe thought of as the increase in income of factors of production in the regionaleconomy.Table 5.3: Impact through output and GVA multipliers (ZAR, 2006 prices) – attendees Direct impact Total output Total GVA impact impactAccommodation 2,666,675 3,513,793 1,200,572Food 3,027,293 5,231,530 2,388,079Beverages 3,069,652 5,304,731 2,421,494Transport & Parking 3,339,901 5,443,918 2,254,838Souvenirs & Other 915,074 1,446,260 664,973Total (in ZAR) 13,018,595 20,940,232 8,929,9572 GVA (at basic prices) is a measure of Gross Domestic Product (GDP) which accounts for the impact of taxes andsubsidies. This GVA is obtained by subtracting indirect taxes from GDP and then adding subsidies. The GVA atbasic prices corresponds to the value of incomes paid to the factors of production – the compensation ofemployees and the gross operating surpluses of firms. GVA or GDP can be used as multiplier measures,depending on the preferred treatment of taxes and subsidies, on condition that the measure used is clearlyidentified. 28
  • 36. Table 5.3 reflects the effects on output and income caused by the attendees’expenditure resulting from the event. It is evident that the R13 million spent byattendees at the Usher concert in Johannesburg creates output in the provincevaluing almost R21 million, while income (as measured through GVA) increases byalmost R9 million.In terms of the analysis of the expenditure by attendees of the Usher concert held inJohannesburg, the first conclusion is that the effect on output in Gauteng Province isapproximately R21 million due to strong backward linkages that exist in theProvince. The second conclusion is that the income that resulted from attendeespending due to the event is approximately R9 million in Gauteng.Organiser expenditureTo estimate the economic impact of the expenditure made by the organisers of theevent, an approach similar to that for the expenditure by event attendees wasfollowed. All expenses incurred by the organisers for the two nights at theJohannesburg venue were allocated into one of the SAM categories (excluding VATfrom Computicket sales and artist fees). These categories are summarised in themain national accounts sectors, as reflected in Table 5.4. The effects on output foreach sector resulting from the spending of the event organisers in Gauteng are alsoshown.Table 5.4: Impact on output (ZAR, 2006 prices) – event organisersSECTOR DIRECT IMPACT TOTAL OUTPUT IMPACTAgriculture 0 20,585Mining 0 51,129Manufacturing 6,800 2,763,258Electricity & water 20,000 97,748Construction 79,804 216,527Trade & accommodation 2,221,225 2,388,999Transport & communication 323,889 905,725 29
  • 37. Financial & businessservices 5,142,498 3,736,332Community services 191,065 121,512Total (in ZAR) 7,985,281 10,301,813Table 5.4 illustrates that the largest direct impacts due to organiser spending are infinancial and business services, trade and accommodation followed by transport andcommunication. Through the ‘backward linkages’, large indirect impacts areexperienced in the manufacturing and transport and communication industries,where the total impact is much higher than the direct impact.Based on the data analysis, it is estimated that total impact of expenditure byorganisers in Gauteng is more than R10.3 million in terms of output generated. Theresults of the study suggest that the sectors that benefited most from expenditure inhosting the events are, in order of importance, financial and business services,manufacturing, and trade and accommodation. In terms of GVA, the incomegenerated due to organising the event translates into R5.3 million in Gauteng.Overall impactThis section represents the overall spending in the local economy that can beattributed to the event by all attendees (locals and visitors from abroad and from therest of South Africa) and organisers. Given the estimation of the economic impactpresented above, it should be kept in mind that, by definition, the calculation of theeconomic impact should only include the expenditure that would not have occurredin the absence of the event. Therefore, the inclusion of local spending in thecalculations is a debateable area.Although the locals do not bring money into the community from outside regions asvisitors do, it is valuable to include their spending as it has the effect of initiatingeconomic activity within the local economy. Examined in this way, an event’scontribution to a local economy is comparable to a local business that both drawsmoney from, and contributes to, its community. To consider only the tourist rand interms of economic impact would greatly underestimate the complete financialbenefits of the event and other similar events. In addition, this study recognises that 30
  • 38. without such events, a significant amount of money would leave the area due tolocals seeking an alternative event for participation in other regions.The usefulness of the overall impact is that it allows one to measure the amount ofmoney that the event circulates through the local economy from every source fromwhich the event draws financial impact. The sum of the impacts gives us an estimateof the total impact of the event in the region. This is shown in Table 5.5.The analysis of the results indicates that the total direct economic impact of theUsher concert held in Johannesburg is R21 million, which translated into outputworth R31.242 million. That is equivalent to an aggregated output multiplier of theorder of 1.49. Therefore, for each rand spent due to the event, 49 cents is generatedadditionally in terms of indirect expenditure. The aggregated output multiplier isobtained by dividing the total output impact by the direct impact.Table 5.5: Total impact on regional output and gross value added (ZAR million) Direct Output GVA Attendee 13.019 20.940 8.930 Organiser 7.985 10.302 5.352 Total 21.004 31.242 14.282In terms of value added, it is evident that the R21 million direct spending due to theUsher concert held in Johannesburg led to gross value added of R14.282 million,indicating the income that factors of production earn due to the spending. This isequivalent to a GVA or income multiplier of 0.68. Therefore, for every rand spentdue to the Usher concert, someone in Gauteng earns 68 cents in income.One of the elements of the additional value added that will result from the event isremuneration of employees that, in turn, affects household income. In particular, theimpact on low-income households can be highlighted, as this can be used as anindicator of the extent to which the event contributes to poverty alleviationthroughout the provincial economies. This is summarised in Table 5.6. In terms ofGVA, the contribution of the event to income for low-income households totals R1.5million. In total, the income of households that can be attributed to hosting the 31
  • 39. event in Gauteng is more than R14 million, of which attendee expenditure during theevents is the largest contributor.Table 5.6: Total impact on regional income (ZAR million) Low income Other income Total incomeAttendee 1.042 7.888 8.930Organiser 0.467 4.885 5.352Total 1.509 12.773 14.282 32
  • 40. 6. CONCLUSIONS AND RECOMMENDATIONS6.1 Profile of the Usher concert attendeeDEMOGRAPHIC JOHANNESBURGPROFILEGender Male (33%); Female (67%)Age Average age: 28.3yearsMarital Status Single (45%)Home Language English (63%); Afrikaans (5%); Other (32%)Province of residence Gauteng (80%)Country of residence • Australiaoutside RSA borders • Botswana • Nigeria • Swaziland • USA • ZimbabweLevel of education Diploma/Degree (14%)Occupation Professional (46%)ECONOMICINFORMATIONNumber of people in Average of 4.69 peopletravelling group 33
  • 41. Number of people paid Average of 2.75 peopleforLocal residents Local residents (58%)Length of stay in area Average of one nightNumber of tickets Average of 2.97 ticketspurchasedExpenditure per group R1,720.32CONSUMERBEHAVIOURInitiator of attendance Self (37%)Decision to attend A month ago (38%)Motivation to attend • Word-of-mouth • Television • Radio • Facebook • Computicket’s website • Twitter • MagazinesMUSICAL INTERESTMusic events/festivals Average of 2.46 eventsattended in 2011 34
  • 42. Preferred artist to • Adeleperform in South Africa • Alicia Keys • Beyoncè • Chris Brown • Drake • Jay-Z • Justin Bieber • Lady Gaga • Mariah Carey • Nicki Minaj • R-Kelly • RihannaAttendance of other Yes (89%)music events in 2011 No (%)Preferred type of music • R&B • Rap • Pop • Reggae • Jazz 35
  • 43. All time favourite • Beyoncèartist/band/performer • Chris Brown • Lil Wayne • R-Kelly • Rihanna • Usher 6.2 Conclusions The following conclusions can be drawn from the study: • Attendees at the Usher concert were mainly female and English speaking. • The province of residence of attendees at the Usher concert was mainly Gauteng. • Foreign visitors were mainly from Australia, Botswana, Nigeria, Swaziland, the USA and Zimbabwe. • The respondents at the Usher concert were mainly single, followed a professional career and averaged 28 years of age. • Attendees travelled in groups of 5 people, were financially responsible for three people and were mainly local residents in Soweto where the concerts were held. • In Soweto, respondents spent an average of one night in the area. • Respondents spent an average of R1 720.32 at the show • Respondents at the concert purchased an average of three tickets. • The decision to attend the Usher concert was made a month before and the attendance at the concert was initiated by the respondents themselves. • Respondents at the Usher concert indicated that an average of 2.46 events were attended in 2011. • The majority of respondents indicated that they prefer to listen to R&B, rap, pop, reggae and jazz music and various artists were indicated as their all-time favourite artists/bands/performers which include: Beyoncè, Chris Brown, Lil Wayne, R-Kelly, Rihanna and Usher. 36
  • 44. 6.3 Economic ImpactThe objective of this study was to conduct an economic impact assessment of the Usherconcert held at the Orlando Stadium in Soweto. • Results indicate that the show had a total direct economic impact of R21 million which translates into output worth R31.2 million. • The economic impact is mainly influenced by the numbers of visitors from outside the area, average spent per person, number of attendees and leakages in the regional economy.6.4 RecommendationsThe following recommendations were made by the respondents at Usher concert at OrlandoStadium in Soweto: • Management should find ways to accommodate people when it rains, particular the Golden Circle and General standing ticket holders. • Better marketing strategies should be implemented prior to the event and media such as television and different channels should be considered. • Management should also focus on the following: o Better toilet facilities o Better food o Better parking o Better sound o Better venue o Better entrance access o Enlarging the big screens • Attendees also recommended that management should consider an indoor venue for future events • Management should consider a programme when there a couple of artists performing to inform concert attendees about the artists 37

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