Reside occasions promoter and venue proprietor Reside Nation, and its ticketing division, Ticketmaster, are within the midst of a authorized battle with the US Division of Justice over the corporate’s enterprise practices.
The DoJ filed a lawsuit in opposition to the company in Might, alleging “monopolization and different illegal conduct that thwarts competitors in markets throughout the reside leisure trade.”
The DoJ’s legal professionals notably focused Ticketmaster, arguing that “music followers in america are disadvantaged of ticketing innovation and compelled to make use of outdated know-how whereas paying extra for tickets than followers in different nations”.
If the DoJ will get its method – actually not a assured consequence – Reside Nation could also be compelled to dump Ticketmaster.
The live performance large has lengthy defended its enterprise practices, each earlier than and after the DoJ lawsuit was filed, arguing that Ticketmaster doesn’t set ticket costs – that energy belongs to the artists and sports activities groups to whose occasions Ticketmaster sells tickets.
The DoJ’s authorized criticism “ignores every thing that’s really accountable for increased ticket costs, from rising manufacturing prices to artist recognition, to 24/7 on-line ticket scalping that reveals the general public’s willingness to pay excess of main tickets price,” Reside Nation mentioned in a response to the lawsuit.
“It blames Reside Nation and Ticketmaster for prime service expenses, however ignores that Ticketmaster retains solely a modest portion of these charges. In truth, main ticketing is without doubt one of the least costly digital distributions within the financial system.”
So if Reside Nation’s enterprise practices aren’t the rationale for Ticketmaster’s dominance within the North American ticketing market, then what’s?
In an look at this yr’s Goldman Sachs Communacopia + Know-how Convention, on Tuesday (September 10), Reside Nation CEO Michael Rapino supplied a solution to that query.
Ticketmaster’s success – which Rapino expects might be repeated on the planet outdoors North America within the years to return – comes merely from providing a greater product, each to customers and the artists and venues that Ticketmaster serves.
“What Ticketmaster has frequently accomplished is constructed the most effective enterprise international platform,” Rapino mentioned throughout a Q&A with Stephen Laszczyk, Goldman Sachs’ lead leisure trade analyst.
Rapino mentioned that, since Reside Nation took over Ticketmaster some 14 years in the past, the corporate has been “obsessed” with making Ticketmaster’s platform the one which venues, sports activities groups and artists wish to work with. He mentioned Ticketmaster’s “secret sauce benefit” is giving venues, artists and sports activities groups entry to the information it collects from ticket gross sales.
“[When] we took Ticketmaster over, it was a closed platform that didn’t give information away. At the moment, it’s an open platform, it allows you to take the information.”
Equally importantly, Ticketmaster presents its ticketing purchasers a collection of instruments that makes utilizing the platform simpler than different choices, Rapino mentioned, evaluating Ticketmaster to the sorts of enterprise options supplied to companies by Microsoft or Salesforce – a product that may combine with a venue or sports activities crew’s complete operation, and that’s simple for workers to make use of.
The aim is to get these companies to say “’You recognize what, I like the opposite choices, however [Ticketmaster has] the deepest connection. They’ve essentially the most instruments, the best information instruments, the best method for me, the crew proprietor or the venue proprietor, to make use of that,’ and outsource that to Ticketmaster,’” Rapino mentioned.
Rapino’s description of Ticketmaster’s superior tech is nearly diametrically reverse to the DoJ’s description of customers who’re compelled to make use of “outdated know-how” to purchase tickets. And, Rapino argued, ticketing know-how as an entire is even much less superior in these markets the place Ticketmaster isn’t the dominant participant.
“Aside from Canada, the US, the UK, perhaps Australia, most different markets are actually, actually unsophisticated,” he mentioned. “Perhaps they’re nonetheless promoting at retail, perhaps they’re nonetheless promoting on their telephone. Most of these markets [have] very, very outdated built-in methods.”
“[When] we took Ticketmaster over, it was a closed platform that didn’t give information away. At the moment, it’s an open platform, it allows you to take the information.”
Michael Rapino, Reside Nation
Rapino mentioned this presents “an important alternative” globally for Ticketmaster.
“Most of Ticketmaster’s enlargement might be on a world foundation, in these markets which might be under-serviced, [that] have — perhaps current rivals, however nowhere close to the know-how that Ticketmaster’s enterprise would have.”
Rapino did acknowledge the frustration that many customers have felt with the ticketing enterprise – a difficulty that got here up as soon as once more in latest weeks, when would-be ticket patrons to Oasis’ UK tour subsequent yr discovered themselves with out tickets, or going through sudden worth spikes on account of “dynamic pricing,” i.e., changes to ticket costs that occur in actual time in response to demand.
That observe has now resulted in an investigation of Reside Nation by the UK’s competitors regulator.
On-line ticket gross sales, coupled with rising demand for occasions, have highlighted the shortage situation within the ticketing enterprise, Rapino defined.
“[Ticket sellers] won’t have recognized earlier than when [customers] waited in traces. However right this moment, [with] the Web, you rapidly know whenever you’re making an attempt to serve 500,000 tickets to 10 million individuals. You’re waking up with 9.5 million [people] that don’t such as you immediately.”
Michael Rapino, Reside Nation
“In right this moment’s world, customers are by no means blissful after they can’t get a ticket,” he mentioned.
“‘[Ticket sellers] won’t have recognized earlier than when [customers] waited in traces. However right this moment, [with] the Web, you rapidly know whenever you’re making an attempt to serve 500,000 tickets to 10 million individuals. You’re waking up with 9.5 million [people] that don’t such as you immediately.”
At one other level throughout his Q&A, Rapino admitted that Reside Nation has “by no means been ready to determine this PR battle.”
Listed below are three different issues we realized from Rapino’s look on the Goldman Sachs convention:
Artists have turn out to be ‘mini-corporations’
Rapino spent a substantial period of time speaking in regards to the main modifications which have taken place within the music trade in recent times and many years, such because the shift to digital music consumption that triggered a significant globalization of artists and genres, and the truth that touring is changing into an ever bigger a part of artists’ revenues.
In truth, Rapino mentioned that the most important artists within the enterprise have turn out to be “mini-corporations” in and of themselves.
(In some situations, these companies could not even be so “mini,” as may be seen by the financial impression of a Taylor Swift tour coming to city.)
Due to social media, artists are “all consumer-direct manufacturers now,” Rapino mentioned. “They’ve all bought – on the low finish – 10 million, [up] to 200 million, 300 million followers…. They know the place their followers are.”
“The [concert] sport [has been] elevated from a mom-and-pop store to a worldwide enterprise, and that artist now needs… a worldwide promoter with nice native and international assets to assist them.”
Michael Rapino, Reside nation
Rapino gave the instance of Adele’s latest 10-night residency in Munich, an occasion that included the development of a brief customized live performance venue and reportedly boosted Munich’s financial system by some €500 million.
“The concept… you’re going to take a guess that you just’re going to promote 700,000 tickets in a single metropolis… spend $100 million constructing this unimaginable non permanent stadium… with the most important video display in historical past… You don’t make these bets [with] no fan information,” Rapino mentioned.
“So the artist is aware of the place her followers are. Adele would know what number of followers she has in Europe, what number of in Munich, what number of comply with her, how huge of a possible radius. So the artists now are a lot smarter round their information. They’re mini companies. They’re on the lookout for companions that perceive information, perceive globalization, perceive pricing, monetization.”
Rapino added: “Within the final 10 years, the [concert] sport [has been] elevated from a mom-and-pop store to a worldwide enterprise, and that artist now needs – very similar to they need a worldwide report label that may assume globally – they need a worldwide promoter with nice native and international assets to assist them.”
The return on capital is ‘unimaginable’ whenever you personal your personal venues, and the best alternatives are outdoors US
Over the previous a number of years, Reside Nation has been busy constructing out its Venue Nation division, the a part of the enterprise that has been constructing live performance venues all over the world.
Through the Q&A, Rapino defined why that is such a precedence for the corporate. Merely put, it’s extra worthwhile than placing on reveals in venues owned by third events or leased by Reside Nation.
“We realized… as a substitute of paying that unimaginable enormous lease for 20 years, what if we constructed it? What if we then managed it and will finance it?” Rapino mentioned.
“We began to form of evaluate after we put a present in a non-Reside Nation venue, after we put a present in a leased venue, or put a present in a venue we personal. Your return on capital is unimaginable on the third possibility, when accomplished proper.”
“We began to form of evaluate after we put a present in a non-Reside Nation venue, after we put a present in a leased venue, or put a present in a venue we personal. Your return on capital is unimaginable on the third possibility, when accomplished proper.”
Michael Rapino, Reside Nation
Rapino mentioned Reside Nation is concentrated on constructing venues in “white house” markets – these markets that lack venues of a sure dimension, or the place the present venues could also be outdated and under-serviced.
“Exterior of America, most [markets] don’t have a lot infrastructure [for concerts] as a result of soccer or soccer dominates the remainder of the world. There is no such thing as a NBA, no NHL. There’s no brand-new Chase Heart in Singapore or Sao Paulo or Mexico Metropolis.
“So we glance globally… We understand that the nice white house within the area enterprise outdoors of America, that’s our biggest alternative. So we now have some arenas in Europe, and we expect there’s an important runway there. In every single place, from Sao Paulo to Rio, we expect they’re all under-serviced, and we expect we are able to construct them successfully.”
2025 stadium yr might be an even bigger stadium live performance yr than 2023
Final yr was a huge one for stadium live performance excursions – assume Taylor Swift or Bruce Springsteen. By comparability, 2024 is proving to be considerably weaker on the stadium aspect, though Reside Nation says it’s making up for that with a robust yr in smaller venues like amphitheaters.
All the identical, Reside Nation’s income development has slowed this yr into the only digits – a outcome not simply of fewer main stadium acts, but in addition as a result of the last few years’ numbers have been evaluating the Covid lockdown years, which makes for a simple comparability (and large proportion development numbers).
Nonetheless, wanting forward on the main excursions lining up for subsequent yr, Rapino predicts that 2025 might be an excellent greater yr for stadium concert events than 2023 was.
“Subsequent yr appears actually sturdy,” he mentioned, including that, regardless of the relative weak spot in stadiums, 2024 was nonetheless a robust yr for arenas, and that’s prone to proceed into 2025.
“We predict it’s most likely the most effective of every thing subsequent yr, a robust pipe on the highest finish and constant on the amphitheater finish.”Music Enterprise Worldwide
