It is sometimes difficult to wrap one’s mind around the kind of money that music is related to today, whether it is from what the labels are reporting (yes, they are still reporting quarterly returns in the billons: for Q3 2023 Universal Music Group reported that its overall recorded music revenues were $2.21 billion, and while that is a large number, Sony did even better in its music business, with a haul of $2.33 billion) or what the streaming services are taking in (although not necessarily making money: in the third quarter of 2023 Spotify reported its first profit in more than a year, with net income of $69.1 million, from 574 million monthly active users (MAUs), and just to give you a sense of how many people that is, if you add the population of the 10 largest cities in the world—Tokyo, Delhi, Shanghai, Dhaka, Sao Paulo, Mexico City, Cairo, Beijing, Mumbai, and Osaka—it sums to about 251 million people, or about 44% of the Spotify monthly MAUs).
So let’s narrow this to something more comprehensible. The earnings of the Las Vegas Sphere*, the venue that opened on September 29. It is 366 feet tall and 516 feet at its widest point.
On the exterior there are 580,000-square feet of LEDs. The LEDs are segmented into pucks, of which there are 1.2 million. Each puck includes 48 LED diodes. Can you say “advertising”? The people at MSG (as in “Madison Square Garden”) Networks and Sphere Entertainment Company can. During its Q1 2024 earnings call (no, this is not something that happens in the future; fiscal years don’t necessary track with calendars as we know them), James Lawerence Dolan, executive chairman and CEO of Sphere Entertainment said that early in September, before the venue was opened, the exterior (which they call the “Exosphere”) promoted NFL Sunday ticket. “This was quickly followed,” he continued, “by other prominent brands, including PlayStation, Meta, Xbox, and Coca-Cola.” Dolan added, “We have a healthy pipeline of advertising commitments for the Exosphere and over the coming months you will see a constant rotation of impactful campaigns from many prominent global brands.” Of course.
Inside the Sphere there are 17,385 seats, of which 10,000 have haptic capability, meaning that there are a structure of magnets that are driven by ultralow-frequency audio signals that cause the positions of the magnets to be changed, thus making the person sitting in the seat feel various physical sensations (this is, after all, Vegas). There are 168,000 speakers throughout the space. And there is a 160,000-square foot 16K LED media screen that wraps itself around the interior so every seat in the house has a view.
The Sphere officially opened on September 29. After four years of not putting on massively, bombastically staged shows, U2 returned to the Strip and began a residency at the Sphere. It is titled “U2:UV Achtung Baby Live at Sphere.” Of course.
Not surprisingly, given that the 25 dates that were going to conclude in December sold out, the band added 11 more, that will run in January and February.
Getting back to the big numbers, in its Q1 24 release the Sphere reported revenues of $7.8-million, “primarily driven by event-related revenues of $4.1 million, reflecting the opening of Sphere in Las Vegas on September 29, 2023.” Said another way: “U2 generated quite a haul.”
Then there were “sponsorship, signage, Exosphere advertising and suite license fees. That summed to $2.6 million. And make no mistake, most of that take came from the ads on the Exosphere. (Still, there is something to be said for U2’s contribution.)
But then there’s this:
There was an operating loss of $98.4-million, or an adjusted operating loss of $83.1-million. Potatoes, potahtoes, a million here, a million there. . . . Still, that $4.1 million is drowned in red ink.
The week before the figures were released the Sphere Entertainment chief financial officer left the building. Permanently.
Which brings to mind a consideration: from 1969 to 1976 Elvis had a residency at what was then the International Hotel in Las Vegas. He had 636 sold-out performances. Think about the sequined jumpsuits that the King wore, especially those that required vast amounts of material and consequently more sparkle in his later days: Arguably he was able to carry out shows with glitz, glitter and glamour that overshadowed whatever the 160,000-square foot LED media screen could ever exhibit.
It isn’t the venue. It’s the performance.
*Amusingly enough, it cost an estimated $2.3-billion to build, which brings us back to those big numbers.
Note: It seems as though the Sphere is not going to be a one-off, something that one needs to travel to Vegas to witness. James Dolan during the aforementioned earnings call: “We’re bullish that we are going to have more Spheres and that, of course, will expand our revenue base were to justify the expense base on, and we’ll probably get more aggressive as we roll out more Spheres, we’ll get more aggressive with content and keep trying to make the product bigger, greater, more appealing, they — I think there’s a lot of room for that in this project.” Swell. More giant spherical billboards.
Photo by Ross Andrew Stewart via U2’s instagram.