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Ticketmaster/Live Nation Merger Approved – What can we expect?

Feb 3

Posted by mmiller in Uncategorized

As most of you know by now, the Department of Justice approved the Live Nation/Ticketmaster merger last week. There were a few concessions that had to be made for it to go through, but nothing major. What could this mean for ticket brokers?

  • Dynamic pricing – There have been rumors of tickets being priced to more accurately reflect true market value, so money isn’t left on the table and goto ticket brokers anymore. Some bands already do something like this with “VIP Packages” and the “Marketplace” tickets, which are rarely posted by fans and almost always posted by the artist. However, I think we will now see even more experimenting with this, perhaps like the San Francisco Giants are doing now: pricing the same seats differently based on current demand. Just like airline tickets, people sitting next to eachother might be paying different prices based on when they bought them. I expect some minor experimentation with this, but I think they will be cautious as consumer backlash could be huge.
  • More paperless tickets – In general, fans seem  to be okay with this and it seems more and more tours are going this way. Miley Cyrus (altho it backfired on her, most of her shows didn’t even sell out) and John Mayer (floor tickets and lowers only were paperless, that seemed to be more successful than the whole show being paperless). This seems to be a trend without much downside for them, I expect it to continue even more so.
  • A “flash seats” like marketplace where people can re-sell their ticketless tickets (for face value only or possibly more, will see). This is a win-win for Ticketmaster. They get a piece of the action on the original sale of the tickets, and then get even more money when they have to be re-sold only by Ticketmaster because they are paperless.

    • In general, I think things like the above will make it harder and harder for the average ticket broker to to eek out a living in this business. However, it will also eliminate a lot of the “Soccer Moms” or “Beer Money Brokers” as they are called, who don’t know a lot about the business. There will always be money to be made if you do your homework, but how much remains to be seen.

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    Live Nation Profits Plunge

    Aug 13

    Posted by jjones in Live Nation, Uncategorized, economy, ticketmaster

    Live Nation reported loss of $27.2 million in the 2nd quarter of 2009, based on revenue of $1.06 billion. This is in contrast to a net loss of $652,000 in the same quarter of 2008.

    This is interesting for several reasons. First, last year at this time, Live Nation didn’t have their own ticketing operation. They were giving a piece of every ticket sold to Ticketmaster. One would think that the extra, say, $5-10/ticket would add up and make their profits go higher. Apparently, this has not been the case. From what I’ve heard, they’re actually losing money on their ticketing services right now. Secondly, it’s striking how high their revenue is, over 1 billion dollars. It would be interesting to see a breakdown of their expenses and income. How much went to artists, production staff? How much did they make from concessions, ticket fees, etc? How many and which shows did they turn a profit on or lose money on? How much extra money do their VIP packages bring in? Or their “Red Carpet” program?

    One thing Live Nation has done in order to try to create more revenue is their “No Fee Wednesday” promotion and “Half Price Ticket” days. Approximately 500,000 tickets have been sold through these programs. The idea is that the money they lose on ticket prices they’ll make up with more attendance and on-site revenue, such as beer and parking. Will it work? It’s tough to know. When we see next quarters results, it will give us a better idea. Also, next quarter should be their biggest of the year, as their bread and butter is summer amphitheater shows, which should almost all occur in their next quarter.

    Seeing that Live Nation is still losing money, it makes one understand the case for a merger with Ticketmaster to increase efficiency. However, if the merger is denied by the government, maybe it will make Live Nation (and Ticketmaster) think of more innovative ways to do business like the “No Fee Wednesdays” which in the end, will benefit everyone in the industry and fans.

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