TM - LN Merger, con’t…

February 26, 2009 by Joe-Cohen · Leave a Comment
Filed under: Uncategorized 

This Tues., the CEO’s from Live Nation and Ticketmaster (along with several others) testified before the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights.  If you’ve got a free couple of hours its worth the price (free) to watch the posturing, positing, dissembling and downright lies being told around the room.

Bob Lefsetz has a good review of the hearing although I have to disagree with his analysis that the live music industry is broken and we have to “take this chance.”

There’s fear mongering about “foreign” interests which are sweet coming from a Canadian

Michael Rapino, President and CEO of Live Nation, told the Senators. “Our stock has declined by nearly two-thirds. Our real estate holdings have been gutted. Our hard work is not producing the rewards it should. We face the very real possibility that if we don’t find a solution, we could ultimately be bought by a foreign-owned entertainment conglomerate like the majority of record labels.

Posturing (Seth Hurwitz):

“If this merger is allowed to happen, my biggest competitor will have access to all of my sales records, customer information, on sale dates for tentative shows, my ticket counts, they can control which shows are promoted and much more,”

As an aside, everyone in this industry is nutz about data and who has access and controls it.  In reality the most sophisticated use of data in ticketing is to load emails into a CRM system and send people offers to buy Metallica tickets because they once bought AC/DC tickets for their nephew.

And the whoppers:

“Scalping should be illegal,” Azoff continued. “I wouldn’t have bought it [TicketsNow].”

from a person who’s been in negotiations for the past two years on a broker rollup plan.

This show ain’t gonna end anytime soon and if these companies needed anything to pull themselves out of a slump they should be selling tickets to the hearings.

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Live Nation - Ticketmaster

February 9, 2009 by Joe-Cohen · 1 Comment
Filed under: Industry, Music 

Last week the Wall Street Journal reported that the world’s largest promoter, Live Nation and the world’s largest ticketing company, Ticketmaster Entertainment are set to merge.  The combined company would control in excess of 70% of the US concert industry and a vast swath of the business in the UK, Holland, Sweden and Denmark. 

It would bring together a company that has exclusive rights to Madonna, U2 and Jay-Z with the exclusive ticketing company of the O2 Arena, MEN Arena and Wembley Stadium - under no circumstances would the deal benefit consumers in any way.

The global concert ticket industry has growth by over 12.5% CAGR from 1995 - 2007, the majority of this growth coming from increasing ticket prices. 

This fact coincides with the timing that Live Nation, then SFX, consolidated the promoter industry from over 20 companies into one while Ticketmaster acquired:

  • Admission
  • TicketWeb
  • Paciolan
  • TicketsNow
  • 2B Technolgies
  • TickTackTickets
  • Ticket Service Netherlands
  • SLO, Frontline Entertainment and others

into the market leader it is today.  Ticketmaster’s business has also gown over 14% CAGR since 2003 largely on the increase in prices to fans.

So recent history indicates that consolidation in these businesses has coinciding with rising consumer prices.  The only conclusion one can make about a combination of these businesses is a continued increase in prices for fans.  Even the Boss thinks it’s a bad idea. 

However we should take a measured view.  Let’s all ask Ticketmaster and Live Nation what they think the benefit to consumers will be from their merger…

…(that’s the sound of tumbleweed)

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