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Live Nation to dump TicketMaster | MOG Crosspost


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Live Nation to dump TicketMaster | MOG Crosspost
Topic: Music 11:22 pm EDT, Sep 26, 2006

This just in via the LA Times... Apparently, Live Nation, the bastard child of Clearchannel, is pondering taking it's ticket sales away from TicketMaster.

This is a cross-post from the MOG Music Community, where I've started a page. I've been meaning to post more of my musings about music industry related topics. I've been encouraged by several people to do it there, although I'm going to cross post everything. [Update: There is a followup post too with more details about how live booking in the corporate promotion world works.. ]

Here is the rest of the post:

The article cites the current high cost of ticket prices as the primary reason behind Live Nation's thinking. They want to bring down the ticket prices so they can grow the number of people coming out to shows. I'm not so sure about that... I have trouble believing that they want to charge less money, they just want to pocket more of it. I can think of several way they can accomplish that, here are a few of them:

1) MERCH MERCH (concessions and) MERCH!

TicketMaster, being the monopoly it is, has very little reason to innovate. Not much has happened since buying tickets over the Internet became all the rage. There isn't much in the way of "package deals" going on. I'm guessing that Live Nation is looking at their experience with the House of Blues (which they own now too), and thinking how to maximize their revenue by pushing more merchandise and concessions at their first point of sale. People pay a lot more money for their own table and dinner at the HoB shows. Would you be more likely to plunk down $60 for a ticket if you got your concert t-shirt, in your size, at the same time as you picked up your ticket on will-call? Sure you would.. The result would be Live Nation getting further into the merch revenue stream. What about if you got a few drink tickets with orders of six or more tickets? Damn straight..

2) Work the most scarce and sought after for all it's worth...

The VIP booths/boxes, the best seats, etc.. What if there was an auction system for this stuff? In most large venues, the VIP booths/boxes are largely given to corporate sponsors or gotten via deals offered by American Express to their high-rollers. What if you and 30 of your friends (or your company) could put in bids for a booth/box when everyone favorite act is in town? If they can foster competition for those prized spaces, it's a safe bet the overall price paid for them would go up. Is TicketMaster going to make something like this happen? Probably not...

3) These are children of Clearchannel after all...

It's all about going vertical. And be sure, they will continue to go vertical to the point they get vertigo, or the government steps in and whips out the Sherman Paddle. Both are unlikely to happen anytime soon.

So, where is the bottom line? First, let's look at Live Nation's bottom line:

Live Nation's stock isn't hurting. It's stock has doubled since they were spun off from Clearchannel. It's safe to say they have a decent amount of cash on hand. TicketMaster's stock on the other hand, is flat. I have not taken the time to fully research this, but I'll share my gut feelings none the less, because I'm feeling somewhat pompous this afternoon...

This LA Times article has quotes from Live Nation's CEO, Michael Rapino, and I'm not seeing anything about this in Live Nation's press releases, so it's safe to say the reporter has an inside line. Furthermore, this little blurb popped up in Variety about a month ago:

The next step, naturally, is ticketing. With its Ticketmaster contract expiring at the end of 2008, Rapino is tight-lipped about the company's plans. He does, however, admire the way Major League Baseball purchased and assimilated into MLB's online operation.

Admire, huh? What would a clild of Clearchannel do... What's the track record in play... Repeat after me: "acquisition!"

Will Live Nation buy TicketMaster? Or will Live Nation just dump them, and wind up tanking their stock in the process... Only time will tell.

Live Nation has clearly been floating this idea around for awhile. Most likely, they want to get a feel for what Wall Street thinks before making a move against another 800-pound gorilla that always seems to get its way. Two 800-pound gorillas fighting is never a fun thing. They blend together to make 1600-pounds of bullshit. Institutional investors often run away from the smell of it..

So what's the bottom line for us concert goers?

Well... I wouldn't expect shows to get cheaper, but we may wind up getting more for our money, and hopefully have more shows to spend it at. Not exactly a "win-win", but hopefully a "win-eh".

Live Nation to dump TicketMaster | MOG Crosspost

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