eli5 How does Las Vega casinos afford to have major artists and make the money back?
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Unlike other venues, casinos run all year round. So their costs are spread out over many events/concerts. This is unlike most other concert venues which might hold around a dozen or so big events a year. They have to recover their annual costs on fewer events.
Then there is a “network” effect. Essentially since there is a concentration of venues, there is a concentration of spectators who find it convenient as a one stop shop going to many events over a few days. This attracts even more artists who can save/share on setup, travel, ticketing, marketing and promo costs and already have venues already designed for them. This becomes a positive feedback loop – more artists, more performances, attract more spectators who then attract more artists.
The casinos benefit from more spectators since they make money in the casino, shopping and events all of which benefit from more customers.
So a medium/high tier artist might prefer Las Vegas simply because they can have a fairly low costs and while they might have to share a larger part of their revenue with the casino, they can perform over weeks/months (2-3 days a week) rather than having to tour the country with far fewer events.
The very TOP tier artists might experience something different. They can draw the crowds and charge really premium prices for tickets. So for them sharing might be less optimal. Holding a dozen concerts in a tour where they can make $5m a concert is better than having 40 performances where they make $1m per event.
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