Live event promoter and venue owner Live Nation and its ticketing arm Ticketmaster are engaged in legal proceedings with the U.S. Department of Justice over the company’s business practices.
The U.S. Department of Justice filed a lawsuit against the company in May, accusing it of “monopolization and other illegal conduct that hinders market competition in the live entertainment industry.”
Lawyers from the U.S. Department of Justice specifically targeted Ticketmaster, saying “Music fans in the United States are deprived of ticketing innovation and forced to use outdated technology while paying higher ticket prices than music fans in other countries.”
If the Justice Department has its way — which is not a guaranteed outcome, of course — Live Nation may be forced to sell Ticketmaster.
The concert giant has long defended its business practices, both before and after the U.S. Department of Justice filed suit, arguing that Ticketmaster does not set ticket prices — that power belongs to Ticketmaster who sells tickets to its events of artists and sports teams.
Live Nation said the DOJ’s legal complaint “ignores all the factors that drive ticket prices up, from increased production costs to artist popularity to 24/7 online ticket scalping practices that show the public is willing to pay far A fee that is higher than the main ticket price”. Response to Lawsuit.
“It accuses Live Nation and Ticketmaster of charging high service fees, but ignores that Ticketmaster retains only a fraction of those fees. In fact, primary ticketing is one of the cheapest digital offerings in the economy.
So if Live Nation’s business practices aren’t the reason Ticketmaster dominates the North American ticketing market, what is?
At this year’s exhibition Goldman Sachs Communacopia + Technology Conference, On Tuesday (September 10), Live Nation CEO Michael Rapinoe answered the question.
Ticketmaster’s success – which Rapinoe expects to be repeated around the world outside of North America in the coming years – comes only from providing a better product for consumers as well as the artists and venues Ticketmaster serves.
“What Ticketmaster has been doing is building the best global platform for enterprises,” Rapino said in an interview Stephen Ruschikchief entertainment industry analyst at Goldman Sachs.
Rapino said that since Live Nation took over Ticketmaster about 14 years ago, the company has been “obsessed” with making Ticketmaster’s platform one that venues, sports teams and artists want to work with. He said Ticketmaster’s “secret sauce” is giving venues, artists and sports teams access to the data it collects from ticket sales.
“[When] We took over Ticketmaster, which is a closed platform and does not leak information. Today, it’s an open platform that lets you get your data.
Just as important, Rapino said, Ticketmaster provides its ticketing customers with a suite of tools that make using the platform easier than other options and connects Ticketmaster with Microsoft or salesperson – A product that can be integrated with the entire operation of a venue or sports team and is easy for employees to use.
The goal is to get these businesses to say, “‘You know what, I like the alternatives, but [Ticketmaster has] The deepest connection. They have the most tools, the best data tools, and the best usage for me, the team owner or the venue owner, and outsource it to Ticketmaster,” Rapino said.
Rapino’s description of Ticketmaster’s advanced technology is almost the opposite of the Justice Department’s description of consumers who are forced to use “outdated technology” to purchase tickets. And, Rapino believes, ticketing technology overall isn’t even advanced enough in markets where Ticketmaster doesn’t dominate.
“With the exception of Canada, the U.S., the U.K., and maybe Australia, most other markets are very, very simple,” he said. “Maybe they’re still selling at retail, maybe they’re still selling on mobile phones. Most of those markets [have] A very, very old integration system.
“[When] We took over Ticketmaster, which is a closed platform and does not leak information. Today, it’s an open platform that lets you get your data.
Michael Rapinoe, Live Nation
Rapino said this presents “a great opportunity” for Ticketmaster globally.
“Much of Ticketmaster’s expansion will be international, in these underserved markets. [that] Companies that have — maybe existing competitors, but nowhere near the technology that Ticketmaster has.
Rapinoe did acknowledge that many consumers are frustrated with the ticketing business — an issue that has resurfaced in recent weeks when potential ticket buyers oasisNext year’s UK tour finds itself without tickets or facing sudden price spikes due to “dynamic pricing” – where ticket prices are adjusted on the fly based on demand.
This practice has now led to an investigation into Live Nation by the UK competition regulator.
Rapinoe explained that online ticket sales, combined with growing demand for events, have highlighted the scarcity of the ticketing business.
“[Ticket sellers] Maybe I didn’t know when before [customers] Wait in line. But today, [with] Through the Internet, you will quickly know when you are trying to provide service 500,000 Tickets arrive 10 million people. when you wake up 9.5 million [people] I immediately dislike you.
Michael Rapinoe, Live Nation
“In today’s world, consumers are never happy when they can’t buy tickets,” he said.
“”[Ticket sellers] Maybe I didn’t know when before [customers] Wait in line. But today, [with] Through the Internet, you will quickly know when services are needed 500,000 Tickets arrive 10 million people. when you wake up 9.5 million [people] I immediately dislike you.
At another point during the Q&A, Rapinoe admitted that Live Nation had “never been able to resolve this PR battle.”
Here are three more things we learned from Rapinoe’s appearance at the Goldman Sachs conference:
Artists have become “mini companies”
Rapinoe spent considerable time talking about the significant changes that have occurred in the music industry in recent years and decades, such as the shift to digital music consumption that has triggered a significant globalization of artists and genres, and the fact that touring has become an increasing part of an artist’s income. The bigger part.
In fact, Rapinoe said, the biggest artists in the industry have become “mini-companies” themselves.
(In some cases, these companies may not even be that “mini,” as can be seen in the economic impact of a business) Taylor Swift Tour group comes into town.
Thanks to social media, Rapinoe said, artists “are now direct-to-consumer brands.” “They all have – low-end – 10 million, [up] To 200 million, 300 million fans… they know where their fans are.
“this [concert] game [has been] Elevated from mom-and-pop shop to global enterprise, the artist now wanted…a global promoter with extensive local and global resources to help them.
Michael Rapinoe, Live Nation
Rapinoe gave an example AdeleA recent 10-night residency in Munich, which included the construction of a temporary custom concert venue, reportedly provided some boost to Munich’s economy 500 million euros.
“This idea…you have to bet that you’re going to sell 700,000 A ticket to a city…Flowers US$100 million Building this incredible makeshift stadium…with the largest video screen in history…you wouldn’t make these bets [with] There is no fan data,” Rapinoe said.
“So an artist knows where her fans are. Adele will know how many fans she has in Europe, how many fans she has in Munich, how many fans follow her, what the potential radius is. So artists are now smarter about their data .They are mini companies. They are looking for partners who understand data, understand globalization, understand pricing and monetization.
Rapinoe added: “Over the past 10 years, [concert] game [has been] Elevated from mom-and-pop shops to global businesses, artists now want — just as they want a global record label that can think globally — they want a global promoter with deep local and global resources to help them.
Return on capital is “incredible” when you own your own venue, and the greatest opportunities are outside the U.S.
Over the past few years, Live Nation has been busy building its venue country department, which has been building concert venues around the world.
In a Q&A, Rapinoe explained why this is a top priority for the company. In short, it’s more profitable than hosting shows at venues owned by third parties or leased by Live Nation.
“We realized…instead of paying an incredible 20-year lease, what if we built it ourselves? What if we could manage it and fund it?” Rapinoe said.
“We start comparing when we do shows at non-Live Nation venues, shows at leased venues or shows at venues we own. If done correctly, the return on capital for the third option is incredible. .
“We start comparing when we do shows at non-Live Nation venues, shows at leased venues or shows at venues we own. If done correctly, the return on capital for the third option is incredible. .
Michael Rapinoe, Live Nation
Rapino said Live Nation is focused on building venues in “white space” markets that lack venues of a certain size or where existing venues may be old and underserved.
“Outside the United States, most [markets] not much infrastructure [for concerts] Because football rules the rest of the world. No NBA, no NHL. no brand new Chase Center In Singapore or Sao Paulo or Mexico City.
“So we looked globally…we realized there was a huge void in the arena business outside of the U.S. and that was our biggest opportunity. So we have some venues in Europe now and we think there’s a great runway there. From Sao Paulo to Rio de Janeiro, we think services are inadequate everywhere, but we think we can build them efficiently.
2025 will be a bigger stadium year than 2023
Last year was a big year for the stadium concert tour—think Taylor Swift or Bruce Springsteen. Performance at stadiums in 2024 was somewhat soft by comparison, although Live Nation said it was making up for that with strong performance at smaller venues such as amphitheaters.
Still, Live Nation’s revenue growth has slowed to single digits this year — not only the result of fewer shows at major stadiums, but also because data from previous years was compared during the coronavirus lockdowns, making comparisons easy (and Huge percentage growth numbers).
However, looking ahead to major tours next year, Rapinoe predicts 2025 will be an even bigger year for stadium concerts than 2023.
“Next year looks really strong,” he said, adding that despite relative weakness in stadiums, 2024 is still a strong year for arenas, and that could continue into 2025.
“We think this is probably going to be the best for next year, with the pipes at the top being strong and the pipes at the amphitheater end being consistent.”global music business
