Live Nation's Plans To Annoy More People?

from the tone-deaf dept

Last week, we briefly mentioned how sad it was that Ticketmaster/Live Nation's boss Irving Azoff seems so confused into thinking that stronger protectionism really is better for content creators. In that post, I mentioned that last year I spoke with a few top Live Nation execs, who appeared to understand the value of treating customers right, and looking for ways to enable CwF+RtB-style business models. They even talked about using companies like Zappos -- a company which has built up incredibly loyal customers though amazing customer service, even if it means taking a big financial hit itself -- as an example to learn from. I have to admit that I was impressed, but realized the company had a huge negative image to overcome -- and that merging with Ticketmaster wasn't going to help. Still, I thought that it would be quite a story if the company really could embrace that kind of thinking and rebuild its reputation.

So far, it doesn't look good. Beyond Azoff's bizarre anti-consumer tweeting, the company's plans seems to be about as tone deaf to consumer concerns as you can imagine. Now, obviously, this is a giant company, and it has Wall Street investment bankers to please, so it has to tell some sort of numbers-based story. But, the story it's telling is basically "we can squeeze more money out of consumers and artists overseas, so we're going to focus on that," which isn't compelling to anyone (artists, fans or investors -- who note that the company hasn't had as much success overseas).

It seems like perhaps there's a tale of two views at Live Nation: one that's actually focused on building out a sustainable business, and the other that appears to have gotten data happy. I'm a big fan of collecting and analyzing as much data as possible, but it's possible to get lost in that data at times, and lose sight of the big picture. So, right now, the data is telling Live Nation that US fans don't want to pay as much, and US artists want a bigger cut. So it wants to focus elsewhere. But, it seems to be forgetting to figure out why that is. Azoff seems to want to blame file sharing, but that's a red herring. Perhaps the company should look at the company's own image and how widely it's hated out there. People pay for Ticketmaster/Live Nation tickets in spite of the company, not because they like the company.

Azoff apparently scolded investors asking him questions about the company's poor performance, blaming them for not "getting the message." This is the same approach the company recently took in trying to explain its ticket fees, saying that the problem was that fans just didn't get what Ticketmaster was doing. Blaming everyone else for just "not getting" you, isn't an approach that's going to win over many people. You need to actually start showing people through actions.

One of the reasons why the company's margins might be so tight in the US is that it has focused on trying to squeeze every last dime out of fans without giving them enough value in return. Zappos isn't the cheapest retailer out there, but people buy from them because they know the experience is worth it. Perhaps Live Nation/Ticketmaster should take a step back from the data and look at ways to actually wow fans and artists with an experience that over-delivers, rather than has them holding their nose every time they have to hand over money. That is, why not focus on actually adding value, rather than looking for every nook and cranny to charge people more.

Filed Under: concerts, data
Companies: live nation, ticketmaster

Live Nation Working To Turn Website Into More Of A Platform

from the this-could-be-interesting dept

Live Nation gets a bit of a bad reputation for some of the way it handles large stadium shows, but of the "big" music industry players, it's actually one of the more interesting and better positioned companies out there, because it really has aligned itself to benefit from the sale of scarcities, rather than the sale of music itself. It does have some legacy issues, such as huge commitments to some large acts and a distracting merger fight with Ticketmaster, but the company is still worth watching. It's been trying to do more and more with its website, to make it something of a destination/e-commerce play, and its latest move is to make it more of a platform. Both artists and fans will be able to upload concert footage, as well as various community features (wikis, reviews, Twitter streams, fan Q&As and more). It increasingly seems like Live Nation is trying to enable a platform where fans and artists can connect, and on which fans can buy (mainly concert tickets, but other things as well). It's a smart move, but I wonder whether or not Live Nation ends up competing with a band's own web presence. What could be cool is if Live Nation also makes it so an artist can integrate many of these features into their own site as well. In the meantime, though, we're once again seeing why now is a great time to be a musician. There are so many different services that help enable artists to both connect with fans and set up business models.

Filed Under: concerts, music, platform
Companies: live nation

Ticketmaster Collaborates With Artists And Promoters To Shove Scalpers Aside

from the nothing-at-face-value dept

Ticketmaster is the sort of company that lots of people love to hate. It's long been dogged by complaints that it is anti-competitive -- complaints which have gathered pace with its recent move to merge with Live Nation. The company has done plenty of things to try to drive scalpers out of business before, in hopes of sucking up their profit margins, and its latest move will further endear itself to fans. The WSJ reports that Ticketmaster is collaborating with artists and concert promoters to sell premium-priced tickets to shows on its TicketExchange site, and making them look as if they're being sold by fans. Trent Reznor explains the situation in the eminently reasonable way we've come to expect, saying that artists know they could charge much higher prices to some of their fans, but they "don't want to come off as greedy pricks asking that much, even though the market says its value is that high." So instead, they feed them to the reseller market, or as in this case, become the reseller themselves, but obfuscate that fact.

Ticketmaster execs decry the scalper market, and claim it's not fair to artists, who don't get any of the scalper's profits; under the TicketExchange deals, it divides the revenues with artists and concert promoters. This is all pretty bizarre: if Ticketmaster wants to jack up ticket prices, it seems like it would just raise them upfront. It's also not clear why the company thinks that it's abhorrent for scalpers to charge consumers high prices, but it's perfectly okay for Ticketmaster to charge them prices over the tickets' face value. This news will hardly endear the company further to consumers, and probably won't help it with government regulators, either.

Filed Under: scalpers, tickets, trent reznor
Companies: live nation, ticketmaster

Musicians Lobbying For Approval Of Ticketmaster-Live Nation Merger Forget To Mention Massive Conflict Of Interest

from the funny-how-that-works dept

You may have heard, recently, that some top name musicians went to Congress in support of the proposed Ticketmaster-Live Nation merger that has many people in the industry worried. Eddie Van Halen, Seal, Billy Corgan of The Smashing Pumpkins and the four members of the band Journey wrote letters to Congress favoring the deal. But, none of them mentioned a rather important fact, that Bruce Houghton is pointing out: every one of those musicians is managed or co-managed by Irving Azoff, who just so conveniently happens to be CEO of.... Ticketmaster. Doesn't that seem like a bit of a conflict of interest? Or, at the very least, something worth admitting to prior to pushing for the deal to be approved?

Filed Under: billy corgan, conflict of interest, eddie van halen, irving azoff, merger, seal
Companies: live nation, ticketmaster

Live Nation's Strategy Looking Even Worse As It Has To Cough Up Extra $$s For U2, Madonna

from the how-not-to-run-a-business dept

While we definitely think there's a huge opportunity for more comprehensive business models in the music industry, we're still skeptical of Live Nation's model. The company, which is mostly known as a concert promoter, has signed huge deals with some big name musicians to get them to leave their record labels and do everything through Live Nation -- including music sales, concerts and merchandise. Live Nation gets a cut of it all. On the whole, such a model does make a lot of sense, because with one entity managing all of the different revenue streams, the company is much more likely to tweak the knobs. If it realizes that it can make more money in those other products by giving away the music, it (in theory) won't hesitate. That doesn't happen when the record label only gets a cut of music sales.

The problem, though, with Live Nation's model was its decision to focus on just a few huge names, and to pay them tremendous upfront amounts. Now, it turns out, the deals are even worse than what Live Nation expected. Apparently, it paid a portion of what it owed both U2 and Madonna in stock. That, by itself, is fine. It lets the musicians share in the risk a bit. Except, for some bizarre reason, the folks at Live Nation took away all of the downside risk for the musicians by promising how much the stock would be worth. With the stock market in freefall, that's now going to cost Live Nation a ton. For example, it gave a bunch of stock to U2, and guaranteed the stock would be worth at least $25 million. In actuality, it's worth $6 million. That means the company now needs to cough up an additional $19 million in cash and give it to the band. Madonna is apparently in a similar situation, with a similar guarantee about to come due.

Filed Under: madonna, u2
Companies: live nation

Can Concert Promoters Become The New Record Labels?

from the time-to-find-out dept

A little over a year ago, the recording industry was surprised to learn that Madonna wasn't signing a new record label contract, but instead was signing a deal with Live Nation, a big concert promoter, to handle pretty much everything having to do with her business, including releasing new CDs. The WSJ Magazine is running a long feature story about Live Nation, its founder and its ongoing strategy, wondering if it's the new business model for the recording industry. Basically, the guy behind Live Nation knows that there's good money in concert promoting, but that the margins are low. So, he's betting on a few of these "360 deals" where he gets a much larger margin on all other aspects of the business.

It's an interesting strategy that appears to be a step in the right direction, but it's unclear if it really is the future of the industry. Live Nation's strategy seems pretty risky. It involves huge upfront payments for a small number of star performers (whose older, more well-known, music is still under the copyright of earlier labels). It also doesn't seem to do much to embrace new technologies and distribution methods. Instead, it's just this guy making a grab for some big names, and trying to consolidate all their sources of revenue, taking a cut of each one. There's something to be said for that, but it would probably work better in combination with newer technologies and music distribution means -- and without those huge upfront costs that may sink the whole operation.

Filed Under: 360 deals, business models, concert promotions, concerts, madonna
Companies: live nation