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DoJ ‘to file antitrust suit against Live Nation’

The US Department of Justice (DoJ) is expected to file an antitrust lawsuit against Live Nation in the coming weeks, according to the Wall Street Journal.

Citing anonymous sources, the WSJ reports that the suit – which could be filed as soon as next month – would claim the Ticketmaster parent has abused its market-leading position in the ticketing business to harm competition, although specific details of the lawsuit have not been confirmed.

In response to the report, a Ticketmaster spokesperson tells the publication: “Ticketmaster has more competition today than it has ever had, and the deal terms with venues show it has nothing close to monopoly power.”

Neither Live Nation or the DoJ have commented. However, LN president/CFO Joe Berchtold addressed the DoJ’s investigation in a recent interview at the Morgan Stanley’s Technology, Media & Telecom Conference in San Francisco.

“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.”

“The Ticketmaster of 2010 did not face the level of competition that we face today”

Speaking during the promoter’s earnings call in February, CEO Michael Rapino said Live Nation was “100% cooperative” with investigators following reports that the US Justice Department had sent out a new raft of information requests in connection with the probe.

Four years ago, a US district court issued a judgment extending the ‘consent decree’ governing the 2010 merger of Live Nation and Ticketmaster to 2025. The DoJ alleged the firm had violated provisions of the decree on multiple occasions – claims that were strenuously denied by Live Nation.

Berchtold also defended Ticketmaster’s practices when appearing before a US Senate antitrust panel in early 2023, spurred by the fallout from the presale for Taylor Swift’s stadium tour.

“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger. That’s simply not true,” he argued. “The Ticketmaster of 2010 did not face the level of competition that we face today… Ticketmaster has lost, not gained, market share since the merger.”

While the company has come under increased scrutiny from lawmakers since the 2022 Eras Tour onsale, it is understood the DoJ inquiry predates the controversy.

 


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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.”

 


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Live music industry ‘reached new heights’ in 2023

Concert attendance was up 20% for Live Nation to more than 145 million last year, with revenue rising 23% to US$22.7 billion (€20.95bn).

The company posted all-time highs for attendance, ticket sales and sponsorship activity in its financial results for full-year and Q4 2023.

Operating income was up 46% to $1.07bn and AOI rose 32% to $1.86bn, doubling since the last pre-pandemic year of 2019, while Live Nation remains the largest supporter of artists, with investment in acts leaping by more than 40% to over $13bn, while there were 50% more international acts in top 50 tours.

“The live music industry reached new heights in 2023, and demand for live music continues to build,” says LN president and CEO Michael Rapino. “Our digital world empowers artists to develop global followings, while inspiring fans to crave in-person experiences more than ever. At the same time, the industry is delivering a wider variety of concerts which draws in new audiences, and developing more venues to support a larger show pipeline.

“Against this backdrop, we expect all our businesses to continue growing and adding value to artists and fans as we deliver double-digit operating income and AOI growth again this year, with our profitability compounding by double-digits over the next several years.”

“Shows are flying out the door from top to bottom”

The company’s share price was up 2.5% to $93.49 at press time. Speaking to investors last night (22 February) on the firm’s earnings call, Rapino reiterated that another year of growth is on the cards.

“This is going to be a great year,” he said. “We’re pacing ahead on our arena and our amphitheatre business, which is the higher-margin business. So, we’re going to have a fabulous year. We’re going to be able to monetise that around the world.

“We just went on sale within the last week on Usher, Justin Timberlake, Jennifer Lopez, just announced Jelly Roll this morning. These shows are flying out the door from top to bottom.”

LN president/CFO Joe Berchtold added: “We’re seeing most of these on-sales still selling front-to-back, meaning most expensive tickets to least. So, we’re seeing strong demand at all price points… All fronts are showing strong consumer demand globally.”

Rapino pointed out that ’25 is already gearing up to be a “monster stadium year”, as compared to the more arena and theatre-focused ’24.

“We expect this to continue to be a double-digit growth business”

“[2025] looks like it’s going to be a monster stadium year again as that pipe kind of reloads itself,” he said. “We made decisions this year: Usher could have been in stadiums. We wanted to get them in arenas this year and put a great show together. Justin Timberlake, Bad Bunny in arenas versus stadiums. So, you make those trade-offs in different years.

“But the good news for us is we’re going to have a fabulous arena/amphitheatre year, festival year around the world. That’s going to drive our overall AOI margin cash flow. Probably bounce back with some bigger stadium activity in ’25 and then the cycle will continue.”

On sponsorship revenue, which was up 13% to over $1bn, Rapino added: “Our demand in terms of clients that want to be part of this live experience surge right now is stronger than ever. Most CMOs want to sit down with us and talk about how can they have some part of this live explosion on a global basis.

“As you’ve seen with Mastercard and updated deal with Verizon and others to be announced, our pipe is up year-over-year. We expect this to continue to be a double-digit growth business, as we’ve seen in the past. We’ve seen nothing slowing down there.”

Ticketmaster GTV was up double-digits to $13bn on fee-bearing tickets for events playing off in 2024  Asked about platinum ticketing, Rapino outlined the differences between the more established US market and other territories.

“They look at the grosses and say, ‘Wow, we’re leaving too much on the table for the scalpers. Let’s price this better'”

“Outside of the US, we’re in the first inning,” he said. “We’re just rolling this out around the world, so that’s the great growth opportunity obviously. We have it in Europe, but still in infancy stages. We’re going to expand it down to South America, Australia, etc. So, first inning on the international business, well received when it gets there.

“Promoters are anxious for it. Artists are anxious for it, because when they sell an arena in Baltimore versus Milan, right now, they look at the grosses and say, ‘Wow, we’re leaving too much on the table for the scalpers. Let’s price this better.’ So that’s our best sales pitch.

“On the US business, we’re probably about in the fifth inning… We still think that’s a multi-year opportunity to continue to grow our top line/bottom line.”

The pair also offered a brief update on the antitrust investigation into Live Nation and Ticketmaster by the DoJ after Bloomberg reported the US Justice Department had sent out a new raft of information requests in its probe.

“I don’t think we’ve got a lot to report,” said Berchtold. “We continue to answer any questions they have. They control the timing, and we’ll watch it play out, but we don’t have any specific updates.”

“We’re 100% cooperative,” added Rapino.

 


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Live Nation reports ‘strongest quarter ever’

Live Nation says it has delivered its “strongest quarter ever” and is on pace for a record year after reporting revenue of US$8.2 billion (€7.7m) in Q3 2023.

The total represented a 32% increase on the previous quarter’s $5.6bn, while revenue for the year-to-date was up 36% to $16.9bn. The company’s share price was up slightly to $83.42 at press time.

In addition, operating income rose 22% in Q3 and 35% for the first nine months of 2023 to $619 million and $1.1 bn respectively. Plus AOI jumped 35% to $836m in Q3 and 33% to $1.7bn for the year so far.

“We delivered our strongest quarter ever and are on pace for a record 2023, driven in good part by the acceleration of structural growth in the live entertainment industry,” says Live Nation president and CEO Michael Rapino. “While we have benefitted from tailwinds for many years, it has accelerated due to the globalisation of our business along with a fundamental shift in consumer spending habits toward experiences.

“With the majority of opportunity still untapped from Milan to Bogotá to Tokyo and beyond, we expect the industry will continue growing in 2024 and for years to come.”

“The consumer supply-demand seems to be consistent across the globe, small to big”

LN has sold 140 million tickets for its shows in 2023, a 17% year-over-year rise, already bettering 2022’s full year total of 121m. Its Ticketmaster division, meanwhile, has sold 257m fee-bearing tickets for the year-to-date, up 22% on the same period in 2022. Revenue soared 57% to $833m.

Speaking to investors on the company’s earnings call, Rapino said there was no indication of fan interest waning for 2024.

“We have not seen anything taper off in any sense,” he said. “The consumer supply-demand seems to be consistent across the globe, small to big.”

Though acknowledging Beyoncé’s Live Nation-promoted 2023 Renaissance World Tour as “wildly successful”, Rapino said he has no concerns about other tours struggling to replicate its success next year.

“When we look at any artist across Ticketmaster-Live Nation, no artist is going to account for more than 1% of the tickets, so no one tour will ever hurt us year-over-year,” he says. “It’s about our macro portfolio of artists and tours.”

“We’re going to have big, record-breaking tours on the road next year”

He continued: “We think next year – crazy to say, but… we’re looking at double-digit growth over this year. We’re going to have big, record-breaking tours on the road next year, as Bad Bunny just went up again and more to be announced. So we are very confident… that we will overcome this year’s numbers.”

Live Nation CFO Joe Berchtold said the firm was “absolutely focused on continuing to add venues” to its portfolio, and went on to discuss the DoJ’s investigation of the company. Earlier this week, the Wall Street Journal reported that the justice department’s probe was focusing on whether the LN uses anticompetitive agreements with venues and artists.

“Not surprisingly, it’s our impression that the DOJ is taking at least the first level look at almost everything that our competitors complain about and from there they look further at some issues and not others,” he said. “If they tell us they have a problem with something, we talked to them about it.

“But, let me emphasise this: as far as we can tell, nobody thinks that the fundamentals that drive our promotions business are unlawful. We pay top dollar to artists and provide them with top-notch tour support and those are good things.”

Berchtold said his understanding was that the DoJ’s investigation was “in its mid-stages at this point”.

“The article also seems to reinforce that the investigation’s looking at specific business practices versus our overall business model”

“I think the article also seems to reinforce that the investigation’s looking at specific business practices versus our overall business model,” he added.

Rapino, meanwhile, said he was “thrilled” by Live Nation’s new multi-year partnership with Mastercard, which was announced earlier this week. The deal gives cardholders exclusive access to concert presale tickets, premium seats and VIP experiences through priceless.com from January 2024. LN’s sponsorship revenue was up 7% to $367m for Q3 overall.

“We’ve been working over the last couple of years to have a great diversity across our partners on the payment side,” noted Rapino. “Thankfully, we didn’t take any of the easy crypto money at the time. We worked hard to make sure we had a stable of great partners.

“Citibank, PayPal and now Mastercard, for international, rounds out our global portfolio in that category. So we’re very, very happy to have them onboard [as a] big part of our business and continue to show strong growth in our sponsorship side, and sponsors lined-up to be part of this live boom.”

 


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128m tickets sold for Live Nation shows in 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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Michael Rapino: ‘Live music is bigger than ever’

Live Nation boss Michael Rapino believes the touring business is in line for “incredible growth” in the coming years after the company reported another record quarter.

The promoter’s Q2 2023 financial results saw revenue rise 27% to US$5.6 billion (€5.1bn) year-on-year, operating income increase 21% to $386 Million and AOI up 23% to $590m. The firm’s share price opened at $98.93 this morning, just shy of its 52-week high of $99.66.

More than 117 million tickets have been sold for Live Nation shows so far this year, up 20% on the same period 12 months ago. Record Ticketmaster sales are also expected, with 151 million reported fee-bearing tickets sold year-to-date, up 22% Y-O-Y.

“Live music is bigger than ever, with global demand driving the industry to record levels,” says Rapino, LN’s president and CEO. “There’s a more diverse pipeline of artists breaking from all corners of the world, and at the same time tours are going to more markets – particularly in Latin America and Asia. This was our strongest second quarter ever, with 2023 on pace to be a record year, and early indicators for 2024 giving us confidence in continued growth.”

Attendance growth was powered by international markets. Stadium crowds were up 28% to 8m fans, led by Europe and Asia Pacific. Arenas were up 19% to 10.7m fans, largely from Canada, Asia Pacific and Latin America, and festivals were up 14% to 4.5m fans, driven by demand across all its markets. Overall, international markets were up 46%, while North American attendances have grown by 8% for the year to-date.

“Everyone thought ’22 was the record year, and we were headed into an air pocket, and we’ve blown the doors off in ’23”

Live Nation says it is on course to invest over $12bn in staging artists’ shows in 2023, a 30% increase on 2022.

“I think everyone thought ’22 was the record year, and we were headed into an air pocket, and we’ve blown the doors off in ’23,” Rapino told investors on the company’s Q2 earnings call. “We believe for the next multiple years that this industry, in general, is going to have a growth surge on a global basis.

“We don’t think this is just any Covid catch-up. We think that this is going to be the time where live on a global basis is going to have an incredible growth run for years to come.”

Rapino, who previously praised the emergence of younger headliners such as Bad Bunny, Karol G, Rosalia, Blackpink, BTS and Billie Eilish, said “the artist has been unlocked globally”, with the groundwork laid by the company in non-traditional markets now bearing fruit.

“Consumers, thanks to social media and others are driving global consumption with no gatekeepers,” he said. “We have 100 offices in over 40 countries. We have been on this march for a long time. And we think there’s still lots of opportunity… in Latin America, Pacific Rim, Eastern Europe.

“We kind of predicted the artists would continue to go global – more global artists and international markets would want to be just like New York – and Boston would want to be hosting U2 and Beyoncé’s of the world, so we had an opportunity to build out those markets. So pedal down, we see lots of great growth opportunity for years to come on that front.”

“The artists are the ones who are set the price of their tickets. It’s our job to provide the information to them to help them understand the market value”

Rapino and LN president and CFO Joe Berchtold were also asked about the adoption of “platinum” market-based dynamic pricing.

“The artists are the ones who are set the price of their tickets,” said Berchtold. “It’s our job to provide the information to them to help them understand the market value of their tickets, so they can figure out the balance that’s right for them and their fanbase in terms of pricing the tickets.

“It’s almost becoming standard that they’re understanding they should price the front of their house to capture most of the value. Otherwise, it’s the scalper who’s going to take it. And then they want to make sure the back of the house is priced so that every fan can afford to buy a ticket can get in.”

Berchtold said dynamic pricing had become “ubiquitous” in North America post-pandemic, and was becoming “much more heavily adopted” overseas.

“I think we still have a long ways to go in international markets towards full adoption,” he continued. “And if you look at the pricing with platinum, there’s still a substantial gap relative to average secondary pricing, which would imply that artists are continuing or attempting to give a lot of the value to fans and we’ll see how that evolves over time.”

The biggest advantage to dynamic pricing and platinum price over the last few years was really, just how do you help the whole house gets sold?

Rapino said the real “magic” of platinum tickets was to help artists fully sell out shows.

“We have never jumped on an earnings call and told you we couldn’t sell the first 10 rows out,” he said. “Our job is always to sell the last 10 rows out in the upper nosebleeds. So what platinum has enabled the industry to do is, as the artist has increased show cost and needs to get a certain gross for that night, we should figure out how to maximise some of the front of the house closer to market, but that’s also let us bring the price down in the back end of the house. So the net gross can be more overall, but it’s giving fans a better sell-through rate on the back end of the house.

“We used to be locked into kind of three ticket prices that didn’t have that opportunity. So the biggest advantage to dynamic pricing and platinum price over the last few years was really, just how do you help the whole house gets sold? How do you reduce the prices in the back end of the house that are always the harder ones to sell, so you truly get a full house on the proper gross for the artist? All of us benefit when more people walk through those doors.”

 


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LN’s Joe Berchtold on Spotify, ticketing and AI

Live Nation president/CFO Joe Berchtold has praised the impact of platforms such as Spotify, TikTok and Instagram for accelerating the rise of new headline talent.

Berchtold says LN has already sold around 100 million tickets in 2023 so far – as many as it shifted in the entirety of 2019 – with business heavily driven by a “phenomenal year” of stadium shows.

And echoing the comments of CEO Michael Rapino, Berchtold points out the boom is not being driven by heritage acts, but by artists from previously localised markets, fast-tracked to the top with the help of social media.

“I was getting that question in 2011: What happens when the Eagles retire? What happens when when the Rolling Stones stop touring? Well, they’re both still touring, but the reality is today on the supply side, you’re seeing artists able to emerge, develop and build global followings in a way that could never happen historically,” says Berchtold, speaking yesterday (23 May) at JP Morgan’s global technology, media and communications conference.

“We’re very thankful for the Spotifys of the world,” he continues. “We’re very thankful for the Instagrams and TikToks that let them build global brands. A lot of the biggest artists that are out there today [are artists] we wouldn’t have heard three years ago: Bad Bunny last year, Karol G this year… so the global build of supply is happening in parallel to the global build of demand. We saw it with K-pop a few years ago; K-pop is as strong as ever, you’re just not hearing about as much because it’s continuing to build – and well beyond just BTS.

“You’re getting lots of other sources of music that maybe once were regional, now going global”

“You’re getting lots of other sources of music that maybe once were regional, now going global, or maybe were selling out mid-sized buildings regionally and are now selling out stadiums. So you’re seeing that supply continue to build and I don’t see any let up in that.”

Berchtold, who appeared before a US Senate antitrust panel in January, spurred by the fallout from the presale for Taylor Swift’s Eras tour, also offers an update on the reported antitrust investigation into Ticketmaster by the DoJ.

“My view on this is pretty simple,” he says. “You had a lot of very powerful senators constantly clamouring, ‘Those guys must be doing something wrong.’ I think some senators come at life from a viewpoint of viewing success as coming from leverage and power, as opposed to building great businesses. So they assume, without lens of perspective, that others must achieve success the same way. Obviously, we have a very different view – we’re very confident that we’re not a monopoly and our market share doesn’t justify it. Certainly, our economic relationship with both venues and artists doesn’t justify it, so we don’t think that there’s a real issue there.

“We’re very confident in how we run the business; that we do it from a competitive, but even playing field basis. We think that having the best services, the best products is still okay, and so the DOJ process will run its course and we don’t worry about it on a day-to-day basis. We continue to operate our business in exactly the same way.”

Berchtold, who describes all-in pricing as “the best consumer experience everywhere”, suggests the microscope being placed on the ticketing market has been beneficial in some respects as it has increased the understanding of the market in the wider world.

“The level of lack of understanding of the [ticketing] industry is astonishing to somebody who lives in the industry”

“As painful as the last six eight months have been in some regards, I think it’s been helpful because it’s shone much more of a light on – and made more transparent – what goes on in ticketing,” he says. “It’s obviously telling when you have senators asking in the room, ‘Who sets the ticket price? Is that the artist or is that Ticketmaster?’

“The level of lack of understanding of the industry is astonishing to somebody who lives in the industry, but it’s probably a better representation of how everybody understands it. So I think that the amount of attention, press, conversation, has made more transparent how it works, and that transparency is good for us, because I’m very confident [in] the things that we do. We serve the artist, and I don’t think that ultimately is going to be found to be wrong.”

Here is a selection of other highlights from Berchtold’s interview, from artificial intelligence to Live Nation’s growth in Latin America…

How AI can help the live business…

“I am far from an expert on AI, but we have a lot of areas in Ticketmaster where we use what used to be called machine learning. We’re used to taking a lot of data and inputs to figure out how you make life easier for everybody. So to me, it’s more of an infrastructure component.

“We think about… using AI to be much more efficient and targeted in terms of how we market. We continue to think about how you optimise pricing and move even more towards a one-on-one relationship with fans. Ticketing is a complicated customer service because when fans have a need they usually have a need, right now. It’s probably like airlines where I can’t wait until tomorrow because, ‘I’ve got a show tonight’ or, ‘I’ve got an issue that has to get results.’ So the better we can get at customer service – and using AI to help inform that – will be great.”

Artists taking control of their own ticketing…

“The increased press and focus on pricing and secondary has [artists] saying, ‘I don’t want somebody getting between me and the fan, so I’ll take one of a handful of paths.’ First of all, most artists are saying, ‘I want all my fans to be able to get in the building.’ So while it doesn’t get the press, there’s certainly as much focus on pricing the back of the house. How do we keep that affordable for everybody?

“Second, they’re saying, ‘Well then, for the front of the house, I don’t want the scalpers getting all the money. So either I’m going to get this money through platinum or I want to do something like The Cure or Pearl Jam, where I want some sort of face value-only exchange and I want some control over those tickets.’ Our job is to say, ‘Great, we’re providing the tools to do both of those.’ We want to make sure we’re supporting the artists’ agenda and what they want, and neither is right or wrong. Every artist is different in terms of where they’re at in their careers and how they want to interact with their fans, and we’ll support them both.”

The launch of Live Nation’s “music-led destination experience company” Vibee…

“We’ve been obsessed for a long time about the experience that fans have. This is an example of where we’ll work with artists to create destination weekends focused around those artists, and provide the entire experience at different levels. You’ll see a lot of things from EDM to country artists to jam band artists, a lot of classic rock, so it’s going to be pretty wide ranging I expect and will be another great leg of how we continue to grow the business.”

The company’s growth in Mexico since acquiring Ocesa:

“Ocesa’s killing it. We’ve got a great business there that we acquired. We have a fantastic management team, the best people not only in Mexico, but in all of Latin America. And we’ve done what we said we were going to do: work with them to do the simple thing first, which is increase the content flow to Mexico. For a long time, we didn’t really have the motivation to drive putting shows into Mexico. But now we’re all under one roof, helping drive content that way is a quick win.

“Upgrading their Ticketmaster platform to be consistent with the US platform in terms of its ability to do dynamic pricing, have platinum tickets, to sell insurance, to do a number of these things, I’d say are just starting to bear fruit. We’re getting most of the features in place over the course of this year., so we’ll see some benefit this year, then I expect full benefit from that next year.”

Ticketmaster’s expansion into Brazil:

“It’s one of the largest countries in the world, with an incredibly music-oriented fanbase. We just launched The Town, a new festival this year, which will be in the off years relative to Rock in Rio, [to] massive levels of demand. Every artist that we bring down there is doing multiple stadiums and all of the cities are huge cities.

“A major priority and a major source of growth for us as we look over the next few years is how we continue to build up Brazil, Argentina, Mexico with Ocesa and a handful of the other markets down there.”

 


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Live Nation delivers $3.1bn revenue in Q1 ’23

Live Nation posted revenue of $3.1 billion (€2.8bn) for the first quarter of 2023 – up 73% on 12 months ago – as CEO Michael Rapino hailed a breakout year for the new generation of headline artists.

The results prompted a notable uptick in Live Nation’s share price, increasing from $66.76 to $75.91 at press time.

Operating income was $143 million, with AOI at $320m, while losses narrowed from $0.39 a share in Q1 2022 to $0.25 year-on-year.

The company posted record results across all divisions, with ticket sales of almost 90 million tracking more than 20% ahead of the same period last year, driven by a record number of stadium shows and “continued strong growth” in arena tours, leading Rapino to declare that 2023 was “off to a tremendous start”

“For the first time in three years, all of our markets are fully open,” he said. “The common theme we are seeing around the world is that live experiences are a high priority for fans. What is clear as we look at our results and operating metrics is that global demand for live events continues to reach new heights – demand has been growing for a long time and is showing no signs of letting up.

“We expect to host a record number of fans this year, even against a 2022 comparison which benefited from rescheduled shows attended by 20 million fans.”

“This is the real breakout year where the world and the consumer are truly global”

Speaking to investors on the company’s earnings call, Rapino said the business was “firing on all cylinders”.

“To be sitting here today above and beyond last year’s numbers, shows the global strength of the business, and it also shows the global strength of the business from the amphitheatre and the stadium to the club to the festival,” he said. “We’re looking at all territories around the world, firing on all cylinders.”

Its concerts division was responsible for the lion’s share – $2.3bn – of revenue, up from $1.2bn y-o-y, while ticketing leapt from $480m to $678m to $678 million. Rapino stressed that the numbers were not just being powered by heritage acts, but by new headliners from around the world.

“Six of the top 10 artists were younger artists,” he said. “You look at Lollapalooza, Coachella with Bad Bunny, Karol G, Rosalia, Blackpink, BTS, Billie Eilish. I mean, there’s just a host of great new talent every year coming up, filling the pipe. We didn’t know Luke Combs was going to be selling stadiums out this year, two years ago. We had no idea Bad Bunny was going to be the largest selling artist last year.

“We’re also seeing this encouraging new supply strategy where for many years, it was all about US or UK-based artists that filled the charts and fill the stadium and most other talent was domestic. It might have been big in Canada, it might have been big in area, but it didn’t travel.

“This is the real breakout year where the world and the consumer are truly global. Now, you can see artists coming from Latin America and Korea and becoming global superstars. So we think that alone gives the next kick to the supply chain for the next 10 years of young talent from, it will be from India, South Africa, it’s going to be everywhere overnight finding their way to TikTok and Spotify and other places to become these global stars that are selling arenas and stadiums out in their markets.”

“There’s no concern that somehow AI can never replace the live experience”

Rapino added that Ticketmaster is expected to deliver record activity, with around 600 million tickets managed globally this year, while LN’s sponsorship business was on track for double-digit AOI growth.

In addition, Rapino addressed the recent launch of Live Nation’s music-led destination experience company Vibee, describing the premium business as a “huge opportunity”.

“We think there’s a great opportunity overall to launch more products and services that can provide a better premium experience for the customer,” he said. “So this would just be an extension and a continual strategy towards what we call the premium experience.”

The firm’s president and CFO Joe Berchtold, meanwhile, touched upon the thorny subject of artificial intelligence, suggesting its implications for Live Nation were only positive.

“I think it’s all upside for us,” he said. “There’s no concern that somehow AI can never replace the live experience. For us, I consider it an infrastructure tool for both efficiency and effectiveness. So if you think about using AI on recommendations, much better marketing much better individual recommendation in terms of making you aware of shows that you might want to go to.

“Clearly, we’re using machine learning now to help inform models on suggesting pricing that we were just talking about. AI is just the same thing to the next level of data input through that machine learning process.”

Live Nation has also announced the return of its annual Concert Week from 10-16 May. The programme offers fans $25 all-in tickets to more than 3,800 shows across North America.

 


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Live Nation CFO says ’23 is off to ‘raging start’

Live Nation’s “raging” start to 2023, the Department of Justice’s reported antitrust investigation and lessons learned from the Taylor Swift onsale were detailed in a new interview with the promoting giant’s president/CFO Joe Berchtold.

Speaking yesterday (8 March) at Morgan Stanley’s Technology, Media and Telecom Conference, Berchtold said the company had defied projections with its performance in the opening months of the year.

“’23 is off to a raging start,” he said. “Investors, even more so, thought we were top-ticking in ’22 and it was going to be impossible to match, and that is simply not the case. Ticket sales are up over 20% for concerts this year. Ticketmaster GTV is up 33%, which just shows that all live events, not just concerts, continue to be strong on a global basis.”

Berchtold indicated that one of the more pleasing aspects was that the success was not limited to a small number of big tours.

“The demand is very broad, very deep,” he said. “Last week, Ticketmaster sold over six million tickets, which we’ve done many times before. But what was interesting  is that no single artist accounted for over 150,000 tickets. It wasn’t a big onsale week, and that just demonstrates the breadth of the demand. It’s not just the Beyoncés that are selling all of these tickets, we’re seeing very broad demand across all marketplaces – and across all artist levels – continue to be very strong.”

“The high end is continuing to move very strongly and artists are continuing to look to adopt platinum tickets to capture more of the value”

Berchtold, who appeared before a US Senate antitrust panel in January, spurred by the fallout from the presale for Taylor Swift’s Eras tour, explained how the lessons learned helped ensure the subsequent onsale for Beyoncé’s Renaissance World Tour was carried out smoothly.

“First of all, there have been a lot of successful onsales,” he said. “Beyoncé, yes. But Morgan Wallen, Garth Brooks, Madonna and a host of others I’m forgetting that have gone very well. These don’t get the publicity around the ones that go well.

“The Taylor Swift thing, it was our fault in that we said we could do more than ultimately we could deliver, full stop. So that’s on us. When she increased the number of shows in response to the number of Verified Fans to help somewhat counterbalance the supply-demand imbalance, we said that we could pull off still doing that in one day. And the problem was is when we were attacked [by bots] that morning, we had no time to respond and fix that.

“Really, the only difference of substance with the Beyoncé onsale is that we spread it out over more time. We still had bot attempts and other things, but because we had it spread out over a much longer period, we were able to fix that and have a minimal number of shows get impacted because of it.”

In addition, Berchtold said that Ticketmaster had sold more than twice as many market-based platinum tickets than at the same point last year.

“The high end is continuing to move very strongly and artists are continuing to look to adopt platinum tickets to capture more of the value,” he said. “At the same time, artists are continuing to make sure to price the back of the house reasonably to make sure that everybody can afford to get a ticket.”

“We’re just on a journey to continue to educate and have people understand that the artists ultimately need to make money as well”

Berchtold noted that high-profile artists such as Bruce Springsteen speaking out in defence of the dynamic pricing model was a helpful shift.

“I think that every time an artist comes out and publicly says, ‘I’m a great performer and I should capture the value of my performance, not the scalper,’ then that’s helpful for other artists to be comfortable doing so,” he said. “We’re just on a journey to continue to educate and have people understand that the artists ultimately need to make money as well.”

Berchtold also alluded to the reported antitrust investigation into Ticketmaster by the DoJ, stating it could have a “chilling impact on their ability to do settlements ever again”, due to its previous settlements with LN in 2010 and 2019.

“We have a binding agreement with the DOJ as it relates to any perceived deeds in the past, much as you have individual settlements,” he said. “There has never been a situation where the DOJ has come and attempted to retrade a settlement. So a) there are legal questions about whether or not they could retrade a settlement. And b) it would have a chilling impact on their ability to ever do settlements again.

“The first barrier that you got to overcome is the fact we’ve actually had settlements. Two, is it seems to be, pick any random data path you want and it’s, ‘Ticketmaster’s a monopoly, therefore Live Nation-Ticketmaster should be broken up.'”

Berchtold said the assertion that Ticketmaster is a monopoly was not borne out by the facts.

“Market share has declined and more of the money has consistently gone to the venues, as opposed to Ticketmaster,” he said. “Neither of those things happens with a monopoly.

“Live Nation has, over this period, gone from 40 million fans to 120 million fans… And we’ve increased the amount of money we’ve paid to artists by billions of dollars, so we’ve dramatically expanded the marketplace. Again, not hallmarks of a monopoly. Certainly the margins aren’t the hallmark of a monopoly either.  Now, we understand that doesn’t mean they’re not going to look and unfortunately, we don’t control the process or the timing of that process.”

 


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Ticketmaster grilled by senators over Swift onsale

Live Nation’s Joe Berchtold has defended Ticketmaster’s practices in a US Senate antitrust panel spurred by the fallout from the presale for Taylor Swift’s stadium tour.

Swift shifted more than two million tickets – a new record for an artist in a single day – for her AEG-promoted 52-date The Eras Tour, but the sale was marred by reports of “significant service failures” and lengthy delays on Ticketmaster’s website, leading to today’s (24 January) near three-hour bipartisan panel investigating a “lack of competition in ticketing markets”.

In his opening statement, Berchtold, Live Nation’s president and CFO, said the firm had invested more than $1 billion to improve the Ticketmaster system since the companies’ 2010 merger.

“Much of this was on technologies to eliminate fraud and to get tickets to fans instead of ticket scalpers using bots, a prime example of which is our Verified Fan service,” he said.

“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger [but] that’s simply not true… The Ticketmaster of 2010 did not face the level of competition that we face today… Ticketmaster has lost, not gained, market share since the merger.”

“There are problems in the ticketing industry. The recent onsale experience with Taylor Swift… has highlighted the need to address these issues urgently”

Berchtold moved on to address the Swift ticketing controversy from last November. The Eras Tour attracted “historically unprecedented demand” as 3.5m people pre-registered for Swift’s Verified Fan presale, 1.5m of whom were later invited to participate in the onsale. However, the Ticketmaster site struggled to cope with the traffic after being swamped by bot attacks. Seatgeek (which took on $238m in private equity investment in August) experienced similar technical issues ticketing five of the Swift dates.

“There are problems in the ticketing industry, problems we believe can and should be addressed through legislation,” he said. “Many are the direct result of industrial scale ticket scalping that goes on today – a $5bn industry and concerts alone in the United States, fuelled by practices that run counter to the interests of artists and their fans.”

He continued: “The recent onsale experience with Taylor Swift… has highlighted the need to address these issues urgently. We knew bots would attack that onsale and planned accordingly. We were then hit with three times the amount of bot traffic that we’d ever experienced. And for the first time in 400 Verified Fan onsales, they came after our Verified Fan password servers as well.

“While the bots failed to penetrate our systems or acquire any tickets, the attack requires to slow down and even pause our sales. This is what led to a terrible consumer experience, which we deeply regret. We apologise to the fans. We apologise to Miss Swift. We need to do better, and we will do better. Ticketmaster learned valuable lessons from this onsale.

“In hindsight, there are several things we could have done better. And let me be clear that Ticketmaster accepts its responsibility as being the first line of defence against bots in our industry. It’s an ever-escalating arms race. But in this forum where we’re here to discuss public policy, we also need to recognise how industrial scalpers using bots and cyber attacks to unfairly gain tickets has contributed to this awful experience.”

“We should mandate all-in pricing so that fans see the full cost of their tickets from the start”

Berchtold called for “categorical prohibitions” on “fraudulent ticket practices, including deceptive URLs”, along with spec-selling. “We should mandate all-in pricing so that fans see the full cost of their tickets from the start,” he added. “We share your goal of making live entertainment industry better for artist teams and fans alike.”

The panel also heard from witnesses including SeatGeek co-founder Jack Groetzinger, JAM Productions president Jerry Mickelson, singer/songwriter Clyde Lawrence, Sal Nuzzo, SVP of the The James Madison Institute, and Kathleen Bradish, the American Antitrust Institute’s VP for legal advocacy.

Asked directly whether they considered Ticketmaster to be a monopoly, Groetzinger, Mickelson and Nuzzo answered “yes”, and Bradish said the company was “certainly acting like a monopoly”, while Lawrence said, “I’m not sure.”

In response, Berchtold argued the ticketing business “has never been more competitive”. “We believe that fact is demonstrated by every venue renewal [having] multiple credible offers in a bidding process,” he noted.

The session was announced by Senators Amy Klobuchar and Mike Lee of the senate judiciary subcommittee on competition policy, antitrust and consumer rights. Days earlier, Klobuchar had written an open letter to Live Nation chief Michael Rapino, expressing “serious concerns about the state of competition in the ticketing industry”.

“The solutions are there for the taking. Some of them are small things that can be done right away”

The letter came just weeks after a coalition of American consumer, artist and lobbying groups launched a Break Up Ticketmaster campaign, claiming that artists and venues are being exploited by the company. However, several industry commentators were quick to point out that unprecedented demand for Taylor Swift tickets had little to do with Ticketmaster’s relationship with Live Nation.

In her closing comments, Klobuchar suggested the strong turnout reflected people’s desire to see live concerts.

“We are very interested in actually doing something and not just throwing popcorn,” she added. “The solutions are there for the taking. Some of them are small things that can be done right away. Some of them are things that the Justice Department might order as either part of their oversight with the consent decree, or new investigations, or new outcomes – some of which have been discussed here. Some of them are things that we can do right here.

“Of course, we’re always going have some some disagreements… But there is general agreement on some of these ideas when it comes to pricing and transparency and the like.”

 


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