America’s rock concert ogre looking less beastly
Who’s still afraid of Live Nation? The merger in January of America’s leading concert promoter with the dominant ticket-seller, Ticketmaster, was supposed to create a dangerously powerful monster in the rock’n'roll business. That’s why critics like Bruce Springsteen turned the dial up to 11 on their unsuccessful protests against the deal.
But a handful of stumbles — and a decline of as much as 40 percent in the market value of the combined company since April — have humbled the music behemoth, led by Chairman Irving Azoff, which is hosting an investor day on Thursday at New York’s Irving Plaza.
Ticket sales for the biggest musical acts, where Live Nation reaps the bulk of its money, have fallen short of expectations. This is not simply a reflection of the economy’s broader woes — though the concert industry is suffering. In the first half, Pollstar estimates that ticket sales for the top 100 tours fell 17 percent to a combined gross of $966 million, the lowest total since 2005.
But as the trade publication notes: “Larger shows are feeling the economic pain more than their smaller counterparts … (and) club shows are still attracting respectably sized audiences.”
The worry for shareholders of Live Nation is that while concert-goers are still going to concerts, they may be eschewing the expensive, highly-commercialized events the firm organizes in massive venues for 40,000 or more fans at a time.
There’s evidence for this in the bumper time being enjoyed by some less mainstream productions. For instance, the Electric Daisy Carnival, a two-day electronic music party, drew 185,000 people to the Los Angeles Coliseum. While the event was marred by the death of a teen who may have been on ecstasy, its promoters have taken the show on the road.
Or there’s this weekend’s Pitchfork Music Festival in Chicago. Three-day passes, at the staggeringly low price of $90, sold out long ago. Pitchfork said it was determined to cap ticket sales at 18,000 a day to keep the experience low-key, even at the expense of profits.
As a big public company, Live Nation can’t do business that way. Concert-goers, fed up with sky-high ticket prices and added Ticketmaster fees, may be cottoning on to that. That’s a risk Live Nation’s executives must address at their performance Thursday.