What happens to concert ticket prices when Live Nation and Ticketmaster merge?
As Billboard magazine put it at the time: “With master strategist Azoff as CEO of Ticketmaster Ent.—and all the leverage as manager of some of the top touring acts in the world—the battle between titan rivals Live Nation and Ticketmaster has become infinitely more interesting.”
But the “battle of the titan rivals” was already heated.
Live Nation, saying it no longer wanted to be beholden to Ticketmaster’s service charges and fees spent a year developing its own ticket system, which was launched in January.
It lasted roughly four weeks before the Live Nation/Ticketmaster merger plans were announced. Which begs the question: If the world’s largest concert promoter was unable to compete with Ticketmaster, how will smaller promoters fare when taking on the two of them combined?
For Live Nation’s part, getting rid of the fees wasn’t going to be easy. The industry is addicted to them, and quitting cold turkey would be difficult, if not impossible.
Though Ticketmaster receives the bulk of the ire on the service charge and fee front, nearly everyone involved in a show has their pocket lined: the venue, the promoter, Ticketmaster, the credit card companies and the bands.
“The bands are now wanting to get money from fees and basically use Ticketmaster as the big bad bully,” says Agnew, whose R5 Productions uses Ticket Web, a subsidiary of Ticketmaster. “Ticketmaster will get all this shit and the people buying the tickets won’t ever realize it is the band inflating the fees. That’s been getting more popular recently.”
Ticketmaster has long been happy to play foil. Why not? It keeps the acts coming back, and keeps them happy. Last year Ticketmaster made $1.1 billion in revenue based on service charges alone. Carp though they may, fans continue to buy.
Also getting more popular: sponsorship deals on shows, which have grown so ubiquitous in the last few years that “Chevrolet Presents: A Nokia Night With Jonas Brothers at Susquehanna Banks Center” barely evokes a blink.
In the abysmal first quarter report from Live Nation, one thing Rapino actually did have to smile about was his company’s sponsorship revenue: It was up 17 percent, despite what’s generally regarded as a slowdown of advertising revenue across the board.
“We are starting to get presented with sponsorship opportunities at the Church,” says Agnew, noting the irony. “Tasteful stuff that’s not too crazy, but I’m starting, for the first time ever, to at least consider it.”
Agnew says, “The bands are asking for it. Five years ago bands were making money off of records, and bands definitely want to be paid more than they did five years ago. Sponsorship helps with that.”
Azoff is already having dreams of what the merger might yield in terms of sponsorship dollars. “There’s going to be an incredible credibility to go to American Express or Coca-Cola and say, ‘Invest the money in this process with this artist,’” he told Rolling Stone in its July 9 issue.
Couple unchecked sponsorship with Rapino’s plan to “increase margins” on beer and concession sales and what you could be facing a future concert experience that looks like this: 1) Pay more for tickets for 2) a show with more annoying signage than ever (“This next song … is brought to you by Geico!” screens around the arena flash) all the while 3) spending more on beer and food and afterward 4) spending more on souvenirs.
In a potential bid for good PR, Live Nation has been pretty proactive about discounted tickets for certain summer shows. This season they’re offering all-in tickets, lawn seats for all shows at Susquehanna Bank Center in Camden where $29.99 will gain you entry and get you a hot dog and soft drink. (Bring a flask.)
They’ve also dropped all service fees for tickets purchased on Wednesdays throughout the summer.
This is all part, one would think, of the type of thing Rapino had in mind when, in 2006, he told Pollstar’s annual Concert Industry Consortium in Las Vegas that if they only “listen to the fans,” they couldn’t go wrong.
Reading through Rapino’s conference calls to shareholders, countless interviews, his testimony to the Judiciary, his grilling on Capitol Hill, etc., it’s apparent he has a wealth of phrases he feels comfortable dipping into. “Listen to the fan” is one that is frequently found floating on top. “The industry is broken/needs changing” is another.
Thing is, “the industry” has been “broken,” or needed “change,” in Rapino’s mind, ever since he got in it.
Rapino, now 43, has been in the business of concert promotion since he was in college. Live Nation pays him $8.5 million a year for the privilege.
You may recall that earlier this year, as we reported, Live Nation abruptly ended its involvement with the third annual Popped! Festival, which was planned to happen last month at FDR Park in South Philly and feature a slew of big name bands (it wound up being a far more modest affair, folded into the [...]