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‘Fans are resilient’: Across-the-board growth for LN in 2019

Live Nation exceeded expectations for both revenue and adjusted operating income (AOI) in 2019, according to its just-released full-year financial results, painting a rosy outlook for the year ahead, despite growing concerns of the impact of the Covid-19 coronavirus.

The final year of the 2010s saw the concert giant deliver its ninth consecutive year of growth, with turnover up 7%, operating income up 19% and AOI up 14%, to US$11.55 billion, $324.8 million and $942.5m, respectively.

Revenue from sponsorship and advertising grew 17%, to $590.3m, with festival sponsorship having a particularly strong year, bolstered by the addition of Rock in Rio to the LN portfolio. Some 98 million people attended a Live Nation concert in 2019 – a 5% increase on the previous year – while Ticketmaster grew its AOI 11% and delivered 115m tickets in 31 countries worldwide.

Live Nation shares increased around 1.3% following yesterday’s (27 February) earnings call, though the price – in common with other live entertainment stocks – is still down on the all-time high achieved in February 2020, as the coronavirus continues to spook markets worldwide.

Responding to a query from analyst Brandon Ross, who asked how Covid-19 could affect Live Nation’s business in 2020, CEO Michael Rapino said while he expects to see further cancellations and postponements, there will be no decline in the appetite for live entertainment.

The business is real strong. The consumer still seems to be buying the tickets on a global basis”

“[W]e always talk about the resilience of the concert fan,” he said, “and, as of last night, we had a sellout in Australia on a festival [Splendour in the Grass]. The business is real strong. The consumer still seems to be buying the tickets on a global basis.

“So supply [and] demand will be there. We’re going to take this cautiously as we watch the markets and we assume a hotspot will flare up and a show will be cancelled here and there. But we’re confident that, long-term, the show will happen. The revenue will flow and the fan will show up.”

Rapino also revealed that average ticket prices for the promoter’s arena and amphitheatre shows have increased by double digits since 2017, with sales of dynamically priced Platinum tickets increasing 66% in 2019. Despite this, “concerts remain a great deal for fans relative to other live experiences: our average ticket for a concert at one of our amphitheatres was $46 in 2019, relative to about $75 for an NBA [basketball] game and over $100 for an NFL [American football] game,” said Rapino.

“In summary, 2019 was another strong year for Live Nation, building our global concerts business and driving growth in our high-margin venue, sponsorship and ticketing businesses,” Rapino says in a statement.

“Looking at 2020, we believe that our double-digit fan and show count growth so far this year, against a backdrop of very high artist activity across all venue types and markets, sets up our flywheel to deliver another year of strong global growth.”

 


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ASA finds against TM over Platinum ‘best tickets’ claim

Ticketmaster UK has been ordered by an advertising watchdog to withdraw an advert claiming its dynamically priced Platinum service offers the “best available tickets” for an event, after finding the claim is misleading and cannot be substantiated.

The Advertising Standards Authority (ASA) launched an investigation into the ad – pictured on Ticketmaster.co.uk in March 2017 and still live in other markets, such as Denmark – after three people took issue with the company’s claim that “Ticketmaster Platinum offers fans the best available tickets for an event direct from the artist”.

While Ticketmaster “believed consumers were likely to interpret the claim ‘best available tickets’ to mean the best available at the time they were making their booking”, rather than “the best tickets that had ever been sold for that event”, the ASA disagreed, ruling the wording is “unqualified”, and that “for the seating tickets, there could be Platinum tickets on sale at the same time as general tickets, with no discernible difference between the two in terms of customer experience”.

“We therefore considered that while the Platinum tickets were among some of the best seats at the venue, they did not offer a tangible benefit compared to some of the general seating tickets, and the experience offered by the Platinum tickets was no better than the experience offered by some of the general tickets,” reads the ASA ruling.

“There could be Platinum tickets on sale at the same time as GA, with no discernible difference in terms of customer experience”

“We also considered that in the case of some Platinum tickets, the experience offered, when viewed objectively, was worse than the experience offered by some of the general tickets, because they were further from the stage or did not offer as good a view of the stage.

“Because of that, we concluded that the claim that the Platinum tickets were ‘the best available tickets’ had not been substantiated and was misleading.”

The watchdog adds that the advert must not appear again in its current form, and “welcome[s] Ticketmaster’s changes to their advertising”.

Ticketmaster UK managing director Andrew Parsons told IQ in December 2016 that Platinum’s dynamic pricing – where prices fluctuate based on market demand, as is common with airline tickets or hotel rooms – works because it’s about “selling the best seat. That’s understood by both consumers and artists.” With general admission, he added, “it’s harder to do”, but he’d “love to think” there will be a time when Ticketmaster’s GA tickets are also dynamically priced.

Why hasn’t dynamic pricing taken off in music?

A Ticketmaster spokesperson tells IQ: “We thank the ASA for their time and attention to this matter and the opportunity to explain our Platinum product. Platinum is one of the solutions Ticketmaster developed for artists and event organisers to get tickets, which are priced dynamically in some of the most in-demand areas, directly into the hands of fans. We constantly strive to be transparent and clear with the consumer. The wording in question on our website was changed over a year ago.”

 


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