Live Nation Vs. Ticketmaster

Round 1 - go!  Live events giant Live Nation has spread its business-savvy wings to sign artists like Jay-Z and Madonna via huge 360 deals, and this week, they announced the addition of yet another service to their growing arsenal with a recently launched ticketing service.  While Ticketmaster continues to monopolize the industry despite its absurd "convenience" fees, Live Nation finally said goodbye to the ticketing agent after their 10-year contract expired.  The new in-house ticketing service hopes to wrestle away some of that revenue Ticketmaster is hoarding and redirect it to the artists and the promoters and in turn expand to newer audiences.

Some perks of buying your tickets from LiveNation.com? 

• More upfront ticket costs that make Ticketmaster's print-at-home and per-order charges more transparent.
• Different pricing methods - "all-in" as opposed to service charges, status quo, or a lower service charge for lawn seats are some options.
• Fans will also be able to view their seat locations similar to an airline seating chart giving them more flexibility in getting the maximum concert experience. 

CEO Michael Rapino projects to sell more than 40% of total tickets in-house compared with just 11% last year.  All these ticketing services inevitably come with fees, so there's really no escaping it (you know, because of the high cost of ticket-printing sweat shops).  Your best bet?  Buy from the venue.  To put it in perspective, Live Nation owns 39 amphitheatres, 58 theatres, 14 clubs, 4 arenas and 2 festival sites.

Comments

[Mendo]

Are you under the impression that the face value of tickets don't already directly go to the artist and promoter, regardless of the ticket company they use?

[Eric Housh]

@Mendo -true, face value does go to the promoter and artist. However, fees and charges represent money that fans are willing to pay to see an act, and therefore impacts the perceived value of the ticket. The truly unfortunate thing is, based on early onsales, Live Nation is charging fees as high as Ticketmaster. It was never about the fans; it's just about capturing revenue.

Don't get me wrong - ticket companies provide a valuable and necessary service, but it is surprising that given the opportunity to build a ticketing operation ground-up Live Nation was unable to strip some unnecessary overhead and live with a lower fee structure.

Mobile. Online. Social Networking. This is the future of ticketing- it's cheaper, faster, and more reliable. Surprised to see that these three elements are not at the core of LNs strategy - just proves that they're really not interested in changing the game, just raking more coin in their direction.

[sherrie]

of course LN would want to capitalize on another revenue stream, but it is sad that they couldn't reduce the extra fees even a little. i go out of my way to avoid any online ticketing service if i can. that's an extra $13 for 2 beers.

[Phil]

I think the biggest problem with Live Nation is obviously their extremely high operation costs that have plagued their bottom line for the past years. I did a very large study on the company and even though they are brining in upwards of 4.5 billion in revenue, their operating margin the last year was I believe around 6% or lower. The 360 deals sound like a good idea and have so far helped Live Nation, but they have to be careful in just buying up everything they can; they're almost beginning to look like a monopoly when it comes to touring/venues. Either way, I hope Live Nation can figure something out because they can't keep scraping through by only making profits off of concessions. As ticket prices continue to rise consistently each year, are people going to drop $150 to go see a band and then spend $10 for parking and then another $20 for a beer and a soft pretzel? I would try my best to sneak my beer in.

[Mendo]

I was responding to writer's assumption that artists would somehow get paid more if ticket company A sold a ticket rather than ticket company B. The reality is that the agent sewed up that deal way before a single ticket went on sale and it's all in the face value.

I'm not surprised that Live Nation is cranking up charges. They're a public company and Rapino wants to be able to deliver an upside surprise in his 1Q earnings. The other shoe that drops in this is that now they can never go down, only higher, unless they're willing to take on some investor backlash and take the stock price over another cliff.

[steve]

LN's fees are higher than TM's so far for the tickets that i tried to purchase.

[Soundoffwithdave]

This certainly doesn't work in favor of the consumer. I broke it down - Live Nation's profit margin is far greater then Tickets.com or Ticketmaster. Check out my full break down and analysis here... http://soundoffwithdave.com/2009/01/17/live-nation-meet-the-new-boss-same-as-the-old-boss/

[Anonymous LN supporter]

You all don't seriously think Live Nation built a ticketing company to help the consumer pay less, do you?

Ticketing is a business. Live Nation wanted to gain the additional fees that it was losing on its own shows to TicketMaster.

It's just business. There are quite a few ticketing companies out there. The cost of ticketing includes a profit for the ticketing company - ALWAYS.

It's a BUSINESS!

[High LN Fees]

Ouch. My choices for an upcoming concert are LN or going to the box office directly. Box office claims to have a $5 fee. LN wants $12.75 in fees for a $22.50 ticket. Outrageous!