By Alfred Branch, Jr.
Live Nation today rolled out details of its ambitious, upcoming ticketing operation, and company officials laid down a gauntlet to ticket brokers and others that Live Nation intends to aggressively price tickets in the future to the point that it could cut into the profits brokers generate through the secondary market.
Under the new ticketing plan, Live Nation expects to sell more than 20 million tickets annually and will begin dynamically pricing those tickets so that it can recoup more of the revenues it believes it loses after brokers resell those tickets.
“We do very little dynamic pricing,” Nathan Hubbard, president of Live Nation’s ticketing effort, said during a conference call with bankers and financial analysts Friday, because the company did not have enough control of its inventory. On average, a resold ticket on the secondary market could generate two-times its face value, and by launching its own ticketing operation, Hubbard said Live Nation will be better positioned to capitalize on those future sales.
“We believe that those revenues should go to the artist and tour promoter,” he said. Without mentioning it specifically, the move would appear to be a tacit encouragement to artists such as Van Halen and Bon Jovi, among others, who are scalping tickets to their own shows.
Live Nation’s ticketing operation, which will officially launch in 2009 and is being powered by state-of-the-art software by German ticketer CTS Eventim, will generate more than $25 million in adjusted operating income annually through the venues it already owns, officials said. But a major component of the new operation is the company’s plan to aggressively go after new clients, at the expense of rival Ticketmaster, which could significantly increase those earnings.
Included in that strategy is the company’s plan to move into other areas of the ticketing industry, such as sports where Live Nation currently doesn’t play. CEO Michael Rapino said that as the ticketing operation ramps up, the company will be able to offer venues complete ticketing solutions for all of the games and events those venues house.
“Our goal is to allow for better connections between artists and their fans, create a one-stop shop for those fans to take care of all their ticketing needs, and offer sponsors an end-to-end solution for marketing to those fans,” Rapino said, adding that CTS offers extremely sophisticated ticketing solutions that will allow for real-time, up-to-the-minute mobile ticket purchases via cell phones and the internet.
Last Updated on March 17, 2009 by Alfred Branch Jr.
5 Comments
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they just shot themselves, as a year ago they said their split from ticketmaster was to lower ticket prices. Now they want to fvck their fans. People pay those prices on secondary, they wont pay them from the vendor. As ticketmaster embraces the secondary market for which it actually helps them by selling more tickets and giving them the abilility to raise prices with the public not caring. Fans wont buy tickets if they feel the front 25 rows were never available at the regular price. Their stock went down almost 1% today, due to this announcement. I was planning to buy stock in livenation, but I think under this plan their stock will drop to under $10 today. Just a few months ago their stock was stable at around $20, with bad spending/investments, they have taken a long nose dive. The only way livenation can be successful selling their own tickets is to be cheaper. Artists wont sign up for this new “deal” if the public is against it. People hate Clearwater “LiveNation” and this would soon make it worse. LiveNation could go bankrupt if they dont switch their words and plan within this next year before the impliment this bad plan. Blame the scalpers, always an easy way out. But here, I think they got caught and they will be seeing Chapter 11 unless they change their ways….
while I have no idea what will actually shake out from LN’s move into ticketing, I generally see any competition to Ticketmaster as a good thing.
More importantly, I think this article completely ignores the other side of “dynamic pricing,” one that might mean some ticket prices go down. Given that a huge chunk of tickets for large concert venues usually go unsold, one way promoters can get rid of more tickets is to lower the prices. So “dynamic” CAN go both ways.
besides, consumers are already seeing prices go up the same way within the secondary market. Isn’t this just another form of price adjustments?
So the commenter who said the free market will play out is definitely correct. Tickets of the best seats and the hottest shows will likely go up, but there may very well be plenty of tickets with prices that will also NEED to go down in order for them to be sold at all.
Doesn’t matter what Livenation does, free market always wins in the long term. Just look at Dell Computer trying to sell its products directly to the consumer without using retailers, worked at first, but not long term.
If Livenation want to sell tickets using “dynamic pricing”, they will have to hire 100,000 new customer service agents just to answer emails and take phone calls. Not a good business model in the today’s internet world. Their main job is to sell tickets, and not literally change into a customer service business.
As long as there is a true market competition, their marketing pitch to investors are just pretty words in the end.
Doesn’t matter what Livenation does, free market always wins in the long term. Just look at Dell Computer trying to sell its products directly to the consumer without using retailers, worked at first, but not long term.
If Livenation want to sell tickets using “dynamic pricing”, they will have to hire 100,000 new customer service agents just to answer emails and take phone calls. Not a good business model in the today’s internet world. Their main job is to sell tickets, and not literally change into a customer service business.
As long as there is a true market competition, their marketing pitch to investors are just pretty words in the end.
LiveNation should be trying to get more people in seats. Not try and disenfranchise their customer base. By doing this, they are turning concerts into a once a year event. Not smart. Get people in the seats so they buy your parking, concessions, merchandise. Trying to match a “scalper” model that the public hates is not smart. LiveNation wants their brand associated with scalper pricing? Ridiculous.