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.

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.

I predict that fans will actually be hurt by paperless ticketing and this could be the last time it is used at a show like this for the following reasons:

• Given the age group of her fans (tweens), how many have their own credit card to scan at the show? Does this mean parents will have to goto the show, too, even if they don’t want to and be forced to buy another ticket?
• Ticket brokers will still come up with ways to resell tickets (escorting buyers in, anyone?).
• The arenas will still sell out, and many fans will still be without tickets, however the secondary market will have a much smaller supply due to the paperless ticketing, driving prices sky high.  In the end, the same moms who were complaining about all the ticket brokers reselling Miley tickets last tour will now be wishing they would come back so her daughter could get in for under $1000/ticket.

With all the current legislation in the works for the ticket industry, I  wouldn’t be surprised if anti paperless ticketing legislation was drafted because people complain they can’t resell their tickets if they end up having to work, and because they have to buy an extra ticket for the parent even if they don’t want to attend.

It will be interesting to see how loudly parents complain and what ticketmaster does in response and what it means for the future of paperless ticketing.

The video that explains paperless ticketing for the Miley tour(an instant classic!):

I hope that legislators and politicians keep this in mind when considering drafting new ticket laws.

During the 8 years of the pro-business Bush administration, roadblocks to mergers were virtually nonexistent. Things might be different under the new administration, but it’s too early yet to tell. In my opinion, having one company that owns all the venues, promotes the shows, sells tickets on the primary market and also on the secondary market and even has exclusive contracts with the talent seems to be a bit too much. While some might argue that consolidating all of those things would create less redundant expenses and in turn lower prices for consumers, I think anyone with half a brain knows that won’t be the case. What will happen is they will use their exclusive control of every facet of the concert industry to increase their bottom line virtually unopposed with no competition to entice them to stay competitive or reduce fees. They might also use the power of their virtual monpoly to coerce artists to play by their rules, it’s not like their former parent company hasn’t tried things like that before. Hopefully, congress will see through whatever promises LN and TM make and deny the merger.

When it originally went onsale, tickets for Taste Of Chaos at the Palladium in Hollywood were $25. After a few weeks (of what I would imagine were mediocre sales numbers), there was a promotion on the page for $5/off per ticket. This lasted for a few weeks, until now, when tickets are now priced at $11.67/ticket.

I believe this is Live Nation testing the waters for dynamic pricing and trying to do some some quiet research about questions like: How does the amount by which we discount tickets increase sales? Will people who originally purchased tickets be upset that the same tickets are now over 50% cheaper? Does the increased quantity of tickets sold make up for the decrease in price per ticket?

One can expect more testing like this, and, most disturbing, the inverse of this: increasing ticket prices as demand gets higher. While this is common practice for pricing of hotel rooms and airline tickets, it is virtually unheard of in the primary ticketing industry. What will consumer reaction be? What will the impact be on Live Nation’s (and the artists) bottom line? Only time will tell.

Should Live Nation be worried? I don’t think so. No matter what fans say or whatever bad taste the Phish onsale has left in people’s mouths, they will be back to livenation.com the next time one of their favorite bands comes to their town and that is the only place they can buy tickets. What choice do they have? That said, I hope Live Nation has their credit card out and is ponying up the dough for some more servers.

Last year, at Super Bowl XLII in Arizona, the the price for nosebleeds or “get in’s” was about $2500/ticket. With face value of around $800/ticket, this meant a good profit for brokers. However, this year, tickets are down to $1500, not quite such a great pay day. Why is this? Several factors. The most obvious reason is the economy. Who can justify $5000/pair for a 3 hour football game when they aren’t sure they are going to still have a job next week or when they’ve lost 40% of their wealth in the stock market?

Another reason for the low prices this year is the matchup. The Steelers have a huge fan base, but they were just in the Super Bowl 3 years ago so their fans probably don’t feel like it’s as special or rare as other teams fans would. And the Arizona Cardinals have probably the worst fan base in all of the NFL, for good reason: They have had a losing record for what seems like an eternity. No one likes to root for a loser. Before the new stadium opened a few years ago, would only sell about 50% of their seats. Sure, they have fans now that they’re winning, but most of them are “fair weather johnsons” who aren’t big enough fans to fly to Florida and spend the big bucks.

So, for those of you ticket brokers cursing that you didn’t get Super Bowl tickets this year, don’t feel so bad, you probably made more money selling Hannah Montana tickets than you would’ve with this year’s Super Bowl tickets.

However, will this year be different? Here are a few reasons why I think it might:

The last 10 season, they have won an average of about 10 games/season and have been perennially in the top 25. Last season (2008) they ended the year with a dismal 3-9 record. Also, the economy this year is much tougher than last year, especially in Michigan.

Will fans still be willing to pay the exorbitant prices even though their bank accounts are dwindling? Is Michigan football such an institution that it will be immune from a season full of loses and a dire economic situation? Is their fan base hardy enough to withstand these obstacles and keep Michigan Football hot?

The answer is: no. The bloodbath that started at the end of last season (tickets going for half of face value) will continue and worsen this season, especially if their record continues to tank.

The good news? Many fans will be dropping their season tickets and it’s a great time to get in if you’re not a season ticket holder. And if you do currently own season tickets, you can add more tickets, or upgrade your seats much easier than in past years. If you can weather a few seasons of breaking even or even losing money, you can come out at the end of the tunnel (things will start to turn around and great profits to be made again in 3-4 years) with some great seats, ready to cash in.

Michigan is a great example, but this strategy can be used for a lot of teams if you do your research. It’s the perfect storm for getting in on some hot season tickets (a bad record + bad economy).

Within the last year, Live Nation has signed exclusive deals with huge acts such as Madonna, Jay-Z, Nickelback, for huge sums of money. These deals (some 10+ years long) are what are known in the industry as “360 deals” which means they partner with the artist not only for touring, but record sales, merchandising, fan clubs, etc.

With all that is known about Live Nation and their aggressive approach to the music industry, there is a lot we still don’t know. The concert industry is one of the least efficient around, with money being left on the table often and being picked up by ticket brokers. Could Live Nation try to close the gap between face value for tickets and what the market will actually bare? For example, could we expect dynamic pricing for events? This would mean that ticket prices for a show would go up as demand goes up or fall as demand falls. Or, perhaps tickets would be priced more like broker prices (eg front row is $1000, second row is $950, third row is $925, instead of just the whole floor section being the same price). Another possible direction for Live Nation is auctions for a large number of seats. If, say, the first 10 rows would be all auctions, they could effectively squeeze out all the profit margin brokers make and keep it for themselves.

In 2005, Live Nation was known as Clear Channel, but they spun off their concert division and renamed it so that it wouldn’t have the bad name that goes with Clear Channel. For those not familiar with it, Clear Channel is the largest radio station owner in the country. One question this bring up is if artists will feel pressured to sign exclusive deals with Live Nation to ensure their songs continue to get played on the radio.

Live Nation is clearly going to try new things, and most likely try to change the current business model and ticket pricing schemes that ticketmaster has been using for years. The only reason they wouldn’t is the move might upset fans. If they auctioned off the first 10 rows, that means there would be no chance for anyone but someone with a lot of extra money to see their favorite artist up close. With the current system, at least fans have a chance (albeit however small) of getting front row tickets for face value.

What will the future hold for Live Nation and how will it change the industry? Will it make it harder or easier for ticket brokers to thrive? How do you think Live Nation will effect ticket brokers?