LN’s Berchtold: ‘Artists are developing faster’

Live Nation president/CFO Joe Berchtold tackled issues around ticketing, breaking artists and the company’s “hyperlocal” touring strategy in a new interview.

Berchtold told the Morgan Stanley’s Technology, Media & Telecom Conference in San Francisco on 5 March that the live sector was “a global latent demand business”.

Explaining that social media platforms had changed the game “so that fans everywhere are discovering and hearing the same music at the same time”, he added. “Ninety percent of fans are saying that when they discover somebody on social media, it makes them more interested in going to see them live.

“So, we now have seven billion people who are interested in Beyoncé and then, on the supply side, you have artists touring more broadly, with more shows on a given tour than we had in the past.

“There’s a billion people out there who we think over the next several years have the opportunity to be going to concerts and are not all going today. They absolutely are out there.”

Berchtold referenced certain acts ascending to arena and stadium level faster than ever before, pointing to Bad Bunny and Karol G as examples.

“A lot of that opportunity in Europe is focusing on where can we add those music-oriented arenas… and use that to help drive the business”

“They need to now make their income on the roadm but we’re also seeing a phenomenon where artists are developing faster,” he said. “I think in part because of the social media and the discovery, they’re able to find their tribe, they’re able to find their people and enough of a critical mass in more markets where you move from being a club act to an amphitheatre or arena act much faster.

“So every year what’s going on is you have the existing pool of artists continuing to tour, but then you’re adding more in on top of that. So you’ve got a great increasing supply, massive latent demand and affordable luxury.

Berchtold went on to break down the firm’s “hyperlocal strategy” that has borne fruit in the United States.

“It is recognising that you may not go from San Francisco down to the South Bay to go to a concert here because it’s going to take you an hour and a half,” he said. “You’re not going to do that, so we can play down in San Jose and play in San Francisco. You can play in LA, San Diego and Orange County. These are different markets. In Europe, it’s the same. We’re a little earlier days in terms of the hyperlocal, but the US has the benefit of this incredible arena infrastructure.

“When we talk about how we continue to grow, that’s where the Venue Nation side of it comes in. Where can we find markets that don’t have an arena [or] the hospitality that fans today want, so can’t gross what an artist needs to gross. A lot of that opportunity in Europe is focusing on where can we add those music-oriented arenas… and use that to help drive the business over the next several years.”

“It’s easier to buy in ‘A’ asset and turn it into an ‘A+’ than to buy a ‘C’ asset and convince yourself you’re going to turn it into an ‘A'”

Asked about Live Nation’s 2021 acquisition of Latin America’s largest promoter Ocesa, Berchtold described the deal as a “home run”.

“It’s easier to buy in ‘A’ asset and turn it into an ‘A+’ than to buy a ‘C’ asset and convince yourself you’re going to turn it into an ‘A’,” he said. “It’s a world class management team. which matters a lot. And it is delivered on everything we thought. We’re helping deliver more shows and they’re growing their business.”

He continued: “Sometimes it’s better to have a little luck. We closed that acquisition right as Latin music globally, particularly in the US, was taking off. Being able to work with that management team and drive a lot of regional music from Mexico into the US and so we talk long about Bad Bunny and Karol G and Peso Pluma, all these artists who are now selling out arenas and stadiums.”

On the heels of Live Nation’s EVP corporate and regulatory affairs Dan Wall penning a lengthy blog post debunking arguments that the company was responsible for high ticket prices, Berchtold also spoke out in its defence.

“Two-thirds of tickets are under $100,” he said. “A third of our tickets are under $50.”

“We’re not going to solve the problem that 20 million people want two million Beyoncé tickets”

He added: “It is a fascinating industry right from a semi-academic standpoint, because ticketing is so ubiquitous in all of our lives yet, as we’ve learned over the past year or so, it’s massively misunderstood in terms of how it operates,” he said. “Forget about the math behind the numbers, just the basic decision-making of who does what and who decides what.”

While describing Ticketmaster as “the most effective concert selling platform that exists”, Berchtold conceded that evidence from the past couple of years indicated there needed to be an increased focus on the fan experience.

“We’re not going to solve the problem that 20 million people want two million Beyoncé tickets,” he said. “If she has 150m social followers and two million tickets, a lot of people are going to be disappointed in the middle. But there are things from a technology standpoint [and] from a communication standpoint, that can be done better, I think have got better over the past year, but we continue to have a long ways that we need to go.”

In closing, Berchtold addressed the ongoing antitrust investigation into Live Nation and Ticketmaster by the DoJ.

“We’re fully giving them everything they asked for and they’ll define the timetable,” he said. “Meanwhile, we’ll continue to run a great business. Again, I’ll say it over and over, our strategy, our culture, is to super-serve the artists. I don’t think we have anything to be ashamed of with having that as a strategy.

“I think that our structural behaviour is positive for the industry. Big is bad today, but I feel very good about how we are as a company trying to operate what we’re trying to do and what our opportunities are going forward.”

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.