A long-simmering feud over one of the music industry’s last remaining reliable revenue sources boiled over yesterday, as Ticketmaster, the nation’s dominant ticket seller,...

A long-simmering feud over one of the music industry’s last remaining reliable revenue sources boiled over yesterday, as Ticketmaster, the nation’s dominant ticket seller, halted talks to reach a new long-term agreement with the biggest concert promoter, Live Nation Inc.

The situation threatens to create an acrimonious war over who will sell tickets for a big portion of the U.S. live-entertainment industry. A memo circulated within IAC/InterActiveCorp’s Ticketmaster, which controls the ticket inventory to nearly all major concert and sporting events in the U.S., said the ticketing company no longer expects to renew its agreements to sell seats for events at buildings owned by Live Nation, its largest client. Events at venues owned by Live Nation and its House of Blues subsidiary generated 17% of Ticketmaster’s roughly $1 billion revenue last year. . .

Talks between the two sides have grown acrimonious during the past year and a half, according to people close to the situation. Live Nation Chief Executive Michael Rapino has threatened to start his own ticketing operation rather than renew with Ticketmaster. The concert-promotion business has notoriously thin margins; Live Nation reported net income of $9.9 million for the quarter that ended June 30, on revenue of $1.04 billion; it lost money in 2005 and 2006. Having its own ticketing could be seen as a way to increase profitability. Live Nation didn’t respond to a request for comment.

Ticketmaster’s current agreement calls for it to sell Live Nation’s tickets through 2008; it is committed to sell them for House of Blues, now owned by Live Nation, through 2009. Ticketmaster expects to fulfill its contractual obligations, but isn’t pursuing a renewal.

Live Nation had been pushing for an arrangement whereby consumers would purchase tickets primarily through its Web site, with Ticketmaster playing a background role. That proposal was problematic for Ticketmaster, West Hollywood, Calif., which prefers to remain a centralized destination for all ticket sales. North American concert-ticket sales were $3.6 billion in 2006, up 16% from 2005’s $3.1 billion total, according to Pollstar, which tracks concert-industry data. Concerts promoted by Live Nation accounted for 42% of concert tickets sold last year. . .

Source: Wall Street Journal

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