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President & CFO Joe Berchtold also talks the 2024 pipeline, the "globalisation of supply" and the ongoing DoJ investigation
By James Hanley on 07 Sep 2023
Live Nation has sold 128 million tickets for its shows so far in 2023, according to the company’s president and CFO Joe Berchtold.
Speaking yesterday (6 September) at Goldman Sachs Communacopia & Technology Conference in the US, Berchtold pored over an array of hot topics from international growth to the US Department of Justice’s (DoJ) investigation into the company.
Berchtold said sales were already well ahead of pre-pandemic levels and could hit 140m before the year’s end. And echoing LN CEO Michael Rapino’s thoughts during the firm’s recent Q2 earnings call, he said pent-up demand was not driving the growth.
“I don’t think it’s been pent-up demand,” he says. “I don’t think we’re seeing anything that’s not consistent with what we’ve seen over a long period in the live events industry. If you look over the last 30 years… there has been one year of reduction through four or five recessionary periods.
“You may not be able to afford to take the kids to Disney World for a week, but you can still afford to go to a concert”
“We’ve got the tailwind on a global basis of people prioritising experiences over goods. In good times, people want to go out and enjoy themselves and go to live events. [But] I think for people that are more challenged economically, actually, it’s an affordable luxury. You may not be able to afford to take the kids to Disney World for a week, but you can still afford to go to a concert and there’s very broad price points.
“There’s a lot of focus on pricing on the front of the house and average pricing, but we can be equally focused on back-of-house pricing and making sure that every fan can afford to get into the show.”
Berchtold referenced the “globalisation of demand” seen in the business over the past few years.
“We’re seeing another level, which is globalisation of supply,” he continued. “You’ve seen how K-pop music has grown over the past several years. You’re now seeing Latin music accounting for a large portion of the top artists this year. So you’re seeing more genres come in… which is more demand on a structural basis.
“I don’t think any of that is anything pent up [from Covid] because here we are, two years later, and the numbers are showing tremendous growth over ’22, which is showing tremendous growth over ’19. I don’t think a transitory pent up would have this level of ongoing demand.”
While 2023’s figures have been boosted by a series of high-profile tours, Berchtold said the pipeline for next year was looking similarly positive.
“I think next year the growth will be more arena and amphitheatre-driven”
“For major venues that tend to look further out – stadiums, arenas, amphitheatres – if you look at what you have confirmed or have offers in, that accounts for maybe a third of your expected shows at this point of the year. And we’re up double digits looking at next year. So we’re feeling very strong that we’re going to have that supply pipeline. It’s all looking strong on a global basis that we’ll be able to continue to grow.
“I think next year the growth will be more arena and amphitheatre-driven, which is what you’d expect after being so stadium-driven for the past few years. But that doesn’t matter. The number one priority is that we continue to grow that fanbase every year [and] the read so far on the show count would indicate ’24 is shaping up very well.”
Moving on to discuss market-based ticket pricing, Berchtold, who appeared before a US Senate antitrust panel in January, spurred by the fallout from the presale for Taylor Swift’s Eras tour, estimated that Live Nation has redirected around $2 billion to artists via the resale market in recent years.
“At this point, probably 80%-plus of our tours globally are using some sort of platinum pricing, which simply means we’re using analytical tools to help the artists understand the value of their best tickets,” he said. “Since 2019, we’ve probably moved since a couple of billion dollars from secondary to the artist’s pocket. So on one hand we’ve made good progress. On the other hand, the secondary market in the US is bigger now than it was in 2019. So you could also say we’ve made zero progress and we still have a tremendous ways to go with pricing because of that.
“The opportunity now is not so much the awareness and adoption of pricing as a general concept but continued refinement of it and artists deciding for their brand for what they’re trying to accomplish. How much of that money do they want to be capturing versus often letting the scalpers pick up?”
“We continue to believe that our vertical business model… is both pro-competitive and pro-consumer”
Berchtold also provided an update on the reported antitrust investigation into Live Nation and Ticketmaster by the DoJ, saying he understood the merged company’s “fundamental business model is not really being questioned or challenged”.
“We continue to believe that our vertical business model of competing hard and paying the most for concerts, and then making our money on secondary and tertiary profit streams, is both pro-competitive and pro-consumer [and] delivers the best outcome for all those parties,” he said. “I haven’t seen any facts that would indicate otherwise.”
Instead, Berchtold said he believed the investigation would focus on certain business practices at the firm.
“The DoJ is going to take the time to make sure they’ve looked at them all, because they don’t get another bite of the apple a year late,” he said. “We unfortunately aren’t in control of that timeline. I’d love to get it done tomorrow. It’s not up to me because they’re going to go through their process, and we simply don’t control it.”
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