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Live Nation’s leadership team has observed a noticeable difference between sports fans and music fans when it comes to buying tickets, and CEO Michael Rapino neatly summed this up on the company’s Q3 earnings call.
“We are always a little amused that sports is kind of a badge of honor – how expensive those tickets [are] – but music, which is priced much lower than sports, seems to get more of the emotional reaction,” Rapino told analysts on Monday (November 11).
That price differential has existed for some time. Courtside tickets for an L.A. Lakers game run between $200 and $600 each, while about three-quarters of the concert tickets sold by Ticketmaster go for under $100, according to a comment Rapino made at a Goldman Sachs conference earlier this year.
Yet it has generally been music audiences that have complained about prices, with Ticketmaster feeling the blowback, as in the case of high-priced tickets for Bruce Springsteen’s 2023 tour, or, more recently, complaints about surging ticket prices for Oasis’ 2025 UK tour.
Fans angered at seeing Oasis tickets rise in price in real time – the result of Ticketmaster’s “dynamic pricing” model, which reacts to demand – criticized the ticketing company online, triggering an investigation into dynamic pricing by the UK’s Competition and Markets Authority.
“We are always a little amused that sports is kind of a badge of honor – how expensive those tickets [are] – but music, which is priced much lower than sports, seems to get more of the emotional reaction.”
Michael Rapino, Live Nation
Evidently stung by the criticism, Oasis announced they would not use dynamic pricing in sales for the North American leg of their tour.
Live Nation has argued in the past that dynamic pricing is a way of cutting into the secondary ticket market (i.e., scalpers and resellers) who profit from high demand for shows without actually investing anything into making those shows happen.
Rapino has previously argued that dynamic pricing allows artists to capture more of the income from fans who are willing to pay rather than having that money go to secondary sellers.
On the earnings call Monday, Rapino reiterated Live Nation’s hopes for stricter regulation of the secondary ticket market, especially because “America seems to be a market where secondary is free to run.”
Rapino said he’d like to see stronger regulation cracking down on the bots used by resellers to buy large numbers of tickets out from under regular consumers, as well as speculative selling – the practice of secondary sellers offering tickets they themselves have yet to purchase.
“We hope, over time, better regulations get put in place to help the consumer,” Rapino said.
Rapino’s comments came as the company reported stronger-than-expected profits for the quarter ended September 30, coming at USD $1.66 per share, versus Wall Street estimates of $1.59.
However, the company’s revenue took a hit during the quarter, sliding 6% YoY to $7.65 billion. That was largely due to weakness in stadiums this summer, an issue that Live Nation had flagged in earlier earnings calls. The company says it’s on track for another strong stadium year in 2025, which Live Nation expects will be more like 2023, the year of blockbuster tours from Taylor Swift, Bruce Springsteen, and others.
Here are three other things we learned on Live Nation’s latest earnings call:
1. Live Nation is ‘hopeful’ about its antitrust fight under a Trump administration
Live Nation is “hopeful” that the incoming Trump administration will go easier on the company in its ongoing fight against a government antitrust lawsuit.
The US Department of Justice sued Live Nation this past May, alleging “monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry.” The DoJ is seeking a break-up of Live Nation and its ticketing division, Ticketmaster. The attorneys general of 39 US states and the District of Columbia have joined the lawsuit.
Asked by an analyst whether a Donald Trump presidency “is going to be a very good thing for you,” Live Nation President and Chief Financial Officer Joe Berchtold said the company is “hesitant” to say much on the issue, given that “it’s still very early in the transition process.”
All the same, the company is “hopeful that we’ll see a return to the more traditional antitrust approach where the agencies have generally tried to find ways to solve problems they see with targeted remedies that minimize government intervention in the marketplace.”
“Targeted remedies” are generally solutions to anti-competitive practices that fall short of breaking up a business. One such targeted remedy was put in place in 2010 as a condition for government approval of Live Nation’s acquisition of Ticketmaster.
It prohibited Live Nation from doing things such as “retaliating” against concert venues for using other ticketing firms, or threatening venues. That agreement was supposed to end in 2020, but was extended for another five years after the DoJ concluded that Live Nation had violated some aspects of the agreement.
This year’s lawsuit goes much further, asking a federal court to order Live Nation to divest itself of Ticketmaster, a move that Live Nation strongly opposed even before the lawsuit was filed. The company has repeatedly argued that the things consumers and policymakers are frustrated with are out of the hands of Ticketmaster. Among other things, the company has said that prices are set by artists and sports teams, and not Ticketmaster.
The lawsuit “blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees. In fact, primary ticketing is one of the least expensive digital distributions in the economy,” Live Nation said in a response to the lawsuit.
On the company’s Q3 earnings call on Monday (November 11), Berchtold said the lawsuit reflects a “much more interventionist philosophy today than you’d expect of a Republican administration.”
He added that Live Nation will be ready to “engage” with the new administration as soon as the administration itself is ready.
“They need to get through the appointments and get things settled on their end, but we’d certainly be hopeful that we could start engaging with them early next year,” Berchtold said.
2. Live Nation predicts 20% of concert capacity will eventually go to superfans
Many music companies today are talking the talk when it comes to better monetization of superfans, but Live Nation argues that it has been walking the walk for a long time.
“We’ve been selling to the super fan for quite a while,” Rapino said, noting that at Live Nation this segment of customers who are willing to pay for a better experience are called “the premium fan.”
“That’s kind of been an ongoing skill set we’ve had forever,” Rapino said.
And he believes there’s much more that can be done to expand superfans’ market share of live events. He noted that many of the renovations of Live Nation-owned venues include an increase in the share of VIP seats. Rapino thinks he can grow the premium segment of concert tickets to 20% of all sales.
“We always sell out of the boxes, sell out of the premium inventory first. We never have a problem selling that,” he said.
“That is a big part of our CapEx and our [refurbishing of venues] as well as our new buildings when we’re building them. We’re starting with this mandate that they must have a certain higher percentage of premium seats and lounges and experiences. So those venues start with a much better return.”
3. ‘Ticketmaster is a technology company’
One of the arguments the US Department of Justice is making in its antitrust case against Live Nation/Ticketmaster is that the tie-up of these two companies means “music fans in the United States are deprived of ticketing innovation and forced to use outdated technology while paying more for tickets than fans in other countries.”
Live Nation couldn’t see it more differently. In fact, the company’s leadership has argued that Ticketmaster became the dominant player in ticketing by developing better technologies than the competition. Thanks to that technology, Ticketmaster is able to “sell tickets at a volume that others have been unable to handle,” Rapino said on the earnings call.
He may have been referring to the recent ticket sales for Oasis’ world tour next year, which Rapino described last month as “the biggest on-sale in history” with “the most demand in history.”
“Ticketmaster is a technology company. So [we’re] going to continue to be developing products on both an enterprise and a marketplace basis.”
Michael Rapino, Live Nation
At a recent Bloomberg conference, Rapino said the on-sale of Oasis tickets was hit by “multi billions” of bots trying to capture tickets for the secondary market.
“We have the best platform in the world. It’s very hard when you have 10 billion bots hitting your system at [the start of sales] to steal your tickets… I’m so happy the system didn’t go down. We stopped them. We got it done.”
On the earnings call Monday, Rapino said investments into Ticketmaster’s technology – both on the back end and on the consumer-facing side – will continue.
“We spend tens of millions of dollars in capital on Ticketmaster,” he said. “We continue to innovate the products that we offer – on the enterprise side – to our venues, to promoters, others who use the platform… that’s included a lot around pricing technology to help everybody understand the market value of the content they’re delivering.
“Certainly also it’s on the marketing side, developing great marketing science capabilities to help people market their shows, big investments over the past couple of years on continuing to enhance our ability to handle that high demand on sale.”
He added: “Ticketmaster is a technology company. So [we’re] going to continue to be developing products on both an enterprise and a marketplace basis.”Music Business Worldwide