Live Nation Q3 Down, Promises A More Social Future
News & Commentary: To almost no ones surprise, Live Nation reported a drop in net income for the quarter ending September 30th to $51.4 million from $69.25 million last year. A single metric explains why: Live Nation promoted 3% more concerts in 2010 vs. 2009 and sold 16% fewer tickets. But several initiatives announced during the earnings call suggest that CEO Michael Rapino and Chairmen Irving Azoff are starting to understand that fans want concert going a be more social experience and their anger over ticketing practices.
More Stats: Revenue was up slightly, $1.84 billion from $1.79 billion in the same quarter in 2009, but the 2009 figure does not include Ticketmaster's revenue. When Ticketmaster is added, Live Nation's combined Q3 revenue was down by 14% from $2.14 billion. The two merged in January.
The total number of concerts Live Nation staged during Q3 was 4,907, up from 4,775 during the same period in Q3 2009. Total estimated attendance, however, was down 16% to 16,447,000 from 19,534,000 in 2009. Ticketmaster took a hit too, selling 86,015,000 tickets in Q3 2010 as opposed to 95,385,000 during the same period in 2009, down 9.8%.
Ticket Prices & Fees: To combat the downturn Rapino and Azoff promised to negotiate more aggressively with artists to hold ticket prices and fees down. "We intend to lead the industry with an all-in pricing model," promised Rapino. Motivated fans will pay whatever it takes to go to show, according to Rapino, but more casula buyers are motivated by price. "We can price a lawn seat at $25 plus fees and sell a couple of thousand in a few weeks. But when we drop the ticket to $20 all in, we sell a couple of thousand in a few days," said Live Nation's CEO.
Social & Shopping: The company's e-commerce and online music hub LiveNation.com will add connections to Facebook and MySpace later this week and the Ticketmaster sit will follow later this month. It's the first step in efforts to make concert ticket buying more social. The move mirrors recent studies that show that Facebook and Twitter are the top ways that people learn about concerts after friends and broadcast radio.
Rapino also said that the company would soon add a shopping cart to their site. "Upselling works," said Rapino, "if at the moment of ticket purchase we also give then 5 or 6 additional choices of things to buy."
The Future: Neither Rapino or Azoff addressed was a recent study that showed that youth aged 12 - 24 are going to 50% fewer shows than a decade ago . That leaves world's largest concert and ticketing company simultaneously fighting a battles on three fronts - consumer buying patterns, fan distrust and the economy - will not be easy.
Read a pdf of the full earnings report.