Tag Archives: LiveNation

Today’s News: The Plot To Overthrow Ticketmaster

15 Nov

The ticketing industry is widely fragmented: Ticketmaster sells more than 130 million tickets a year, while numerous small companies compete for the rest of the live-event pie.  The most recent issue of Wired has a fantastic piece on the subject.  Its point: the ticketing industry is wide open for a new competitor that goes after Ticketmaster’s biggest weaknesses.  Wired reports:

“For all its clout, Ticketmaster has two major problems.  Most obviously, it gouges ticket buyers.  But less talked about is its lack of flexibility.  With an old codebase, a huge customer roster, and a long-established way of doing things, Ticketmaster is notoriously slow to innovate.  Its new CEO, Nathan Hubbard, points out that his company is starting to add features like interactive seat maps, but even he acknowledges that it can’t ‘turn on a dime like a startup.’

“Virtually all the new ticketing startups aim to lower service fees to fans.  But because this isn’t necessarily important to venues – in fact, it may run counter to their interests – the new guys must focus on Ticketmaster’s second weakness: its inability to innovate.”

For better or worse, Ticketmaster is the standard against which all other ticketing companies are judged.  As a result, new competitors have turned to social media integration, lower fees, and powerful analytics in order to differentiate themselves.  While Ticketmaster has a huge database of customer names (and the bands they’ve seen), the company’s sheer size makes it nearly impossible to use that data in a meaningful way.  When event promoters and artist management can apply that sort of demographic modeling, they are able to implement more effective marketing strategies that reach out to fans directly. (In related news, Chicago’s Jam Productions is suing Ticketmaster to be released from its pre-merger contract over concerns that rival promoter Live Nation could access confidential business information through Ticketmaster and use it against them.)

The fact of the matter is, Ticketmaster protects its bottom line by working for the venues, not the fans.  Fred Rosen, who ran the company from 1982 to 1998, used this realization to grow the company into the juggernaut it is today by thouroughly undercutting its main competitor, Ticketron.  Here’s how: Continue reading

Today’s News: Ticketmaster Customers, Fed Up with Fees, File Class-Action Lawsuit

24 Sep

The fans have had enough.  A lawsuit over misleading ticket delivery fees on the Ticketmaster Web site was granted national class action status last week by a Los Angeles judge, paving the way for millions of customers across the country to collect damages should the ticketing giant lose its case.

Peter LoRe of New York and Curt Schlesinger of Illinois filed suit in L.A. (where Live Nation is based), alleging that Ticketmaster misled them into believing that the company’s “Order Processing Charge” and “UPS Delivery Charge” were based on the actual cost of providing the tickets, rather than just generating profits.  The fees, which range from $14.50 to $25 per ticket, are not charged when ordering delivery by regular mail.

Judge Kathryn Doi Todd wrote in her decision on behalf of the state’s Second Appellant District, which was not published in the case’s official reports: Continue reading

Today’s News: Live Nation wants to pay artists less

20 Sep

TicketNews reports that Live Nation, facing declining ticket sales, is seeking to cut costs by paying the artists it promotes less money.  At a Bank of America – Merrill Lynch Media, Communications and Entertainment Conference last week, Live Nation President and CEO Michael Rapino announced that the big, up-front paydays of the past to artists and their managers are over:

While artists might not be happy with the move – since most music acts generate the lion share of their revenues through touring – fans and Live Nation investors will likely cheer the plan because it could lead to lower ticket prices and improved profits. Earlier this month, influential media and entertainment analyst Ben Mogil with Stifel, Nicolas & Company lowered his rating of the company, in part because of concerns that Live Nation was spending too much on artist guarantees. The move led to an immediate sell off, and drop in price, of Live Nation’s stock, which trades under the symbol LYV.

“2011 will be less about growing market share and more about profitability,” Rapino said. He added that the company is looking to acquire more international artist management firms through its Front Line Management division to help grow Live Nation’s international business, particularly in Spain, France, Brazil and Latin America.

With artists relying more on live shows to offset lower sales of both CDs and digital downloads of their music, this move is certainly not going to be taken well.   It’s especially telling that Rapino announced this at an investors’ meeting, rather than through a normal press release or interview.  Live Nation uses a system of kickbacks and rebates to the venues and artists, taken out of the service fee, to “sweeten the pot” and convince them to sign long-term deals with the massive company.  By announcing that they want artists to take a smaller share (and really, only the biggest arena-packing groups, such as the Rolling Stones and U2, are getting these rebates), LiveNation is signaling that their current model needs to change in order to remain a viable business plan in an changed economy.

Today’s News: Amphitheaters in Trouble

12 Aug

This week’s Rolling Stone reports that large outdoor venues are having an awful summer.  It’s not the god-awful heat (here in Chicago, the heat index is over 100 degrees yet again), or the pigeons that crapped all over the the Kings of Leon at the Verizon Wireless Amphitheater in St. Louis on July 23rd.  The problem? It’s the economy, stupid, experts say.  Of course people facing unemployment and struggling to make ends meet aren’t going to be spending as much to go see shows.  But there’s more than just the general economic malaise crippling major tours such as Lilith Fair, the Jonas Brothers, and Rihanna.  The major concert promoters, Live Nation and AEG Live, have been alienating fans with high ticket prices and excessive fees.

“As overall ticket sales have decreased 10 percent so far this year, Pollstar reports sheds in particular have suffered a ‘huge drop-off.’ ‘It’s just the way [promoters] operate that kills the sheds,’ says Doc McGhee, manager of Guns n’Roses and Kiss. ‘There’s a tremendous backlash this year.’

A lot of it is simple economics: Live Nation, the world’s largest promoter, owns or controls 40 of the nation’s amphitheaters.  Saddled with these properties – which each hold around 20,000 fans – the company needs to book enough summer tours to keep them open during the short season they’re open and often ends up overpaying in bidding wars with competitors like AEG Live, which specializes in arena shows.  That leads to ever-higher ticket prices, which are a tough sell in a down economy.

And because top artists often receive the vast majority of ticket revenue, Live Nation makes much of its money nickel-and-diming fans for ancillary revenues – $44 million annually from parking and $223 million from food and beverages.  Last year, two fans at PNC Bank Arts Center in Holmdel, N.J., filed a class-action lawsuit against LiveNation because they were charged a $6-per-ticket parking fee whether they intended to park or not. (Live Nation filed a motion to dismiss the suit, but a judge denied it in June).”

The dirty secret here is that everyone knows what’s going on, but nobody is doing anything about it.  Artists are stuck working in a broken system, and fans don’t have an alternative if they want to see their favorite acts.  “I don’t think the amphitheater thing is dead, it just needs a price correction – they need to make it user-friendly,” according to Bert Holman, manager of the Allman Brothers Band and no stranger to the amphitheater circuit.  “They’re gouging everything – the food is high, the parking is high.”  John Scher, co-manager of Simon and Garfunkel, has a similar take in the article: “The original concept of the lawn being a place that was casual just became very expensive, unaccomodating, and just uncomfortable.”

Continue reading

Today’s News: Live Nation stock takes a hit on ticket sale challenges

20 Jul

At an investor and analysis meeting held on July 15, LiveNation reported a 12 percent decline in ticket sales for the first half of 2010, and forecast lower revenue figures for the rest of the year. TicketNews cites a report “available on Live Nation’s investor relations Web site” that predicts sales to fall another 15 percent in the second half. However, the report is no longer available on the site, with the link replaced by a message saying “To receive a copy of the written materials provided in connection with Live Nation Entertainment’s 2010 Investor and Analyst Day, please e-mail your request to traciphan@livenation.com.”

Guess they got scared after their stock price fell nearly $3, more than 25 percent of Thursday’s opening price, since then. Live Nation CEO Michael Rapino said the massive sell-off began even before his presentation ended, the AP reported. “We had a real buzz kill at about Slide 9 when I saw the e-mails go out,” he said.

The stock’s slide has stabilized for now (shares are trading around $8.90 today), but this spells trouble for the giant media conglomerate. With key artists such as Rihanna and the Eagles canceling shows, and U2 postponing its North American tour, the pressure is on for Live Nation.

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Who’s paying for this?

9 Jul

From TicketNews: “DOJ recommends Ticketmaster/LiveNation merger receive final approval”

“Having weighed written testimony from several industry professionals but ultimately deciding their arguments were unpersuasive, the U.S. Department of Justice (DOJ) this week submitted its last report to the court recommending the merger of Ticketmaster and Live Nation receive final approval.
The move was not entirely unexpected, considering the DOJ spent months negotiating a deal with the two companies in an attempt to make the merger more palatable to consumers, promoters, venues, artists, brokers and others who often fiercely complained of the partnership.
Ultimately, those complaints, including accusations that Live Nation Entertainment – as it is now called – would have an unstoppable monopoly, were brushed aside by attorneys for the DOJ, who believe the conditions they imposed on the merger will adequately address those concerns. The DOJ’s filing goes before U.S. District Court Judge Rosemary M. Collyer for the final approval, but a time frame for when her decision will be rendered is not known. Live Nation Entertainment has been operating as a single entity since late January of this year.”

This is another blow for music fans and consumers, since the merger gives this giant company control over both ticketing and booking for most of the nation’s biggest live music venues. Ticketmaster has more than 80% market share; LiveNation’s ticketing platform controls another 15 percent or so. The conditions the government has imposed on the merger seem pretty weak, and creating a pair of rivals to ensure competition in the market for ticket sales is basically admitting that the new behemoth entertainment company will be too big to operate fairly.

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