Reside Nation’s management staff has noticed a noticeable distinction between sports activities followers and music followers in terms of shopping for tickets, and CEO Michael Rapino neatly summed this up on the corporate’s Q3 earnings name.
“We’re at all times slightly amused that sports activities is sort of a badge of honor – how costly these tickets [are] – however music, which is priced a lot decrease than sports activities, appears to get extra of the emotional response,” Rapino advised analysts on Monday (November 11).
That worth differential has existed for a while. Courtside tickets for an L.A. Lakers recreation run between $200 and $600 every, whereas about three-quarters of the live performance tickets bought by Ticketmaster go for below $100, in keeping with a remark Rapino made at a Goldman Sachs convention earlier this 12 months.
But it has usually been music audiences which have complained about costs, with Ticketmaster feeling the blowback, as within the case of high-priced tickets for Bruce Springsteen’s 2023 tour, or, extra just lately, complaints about surging ticket costs for Oasis’ 2025 UK tour.
Followers angered at seeing Oasis tickets rise in worth in actual time – the results of Ticketmaster’s “dynamic pricing” mannequin, which reacts to demand – criticized the ticketing firm on-line, triggering an investigation into dynamic pricing by the UK’s Competitors and Markets Authority.
“We’re at all times slightly amused that sports activities is sort of a badge of honor – how costly these tickets [are] – however music, which is priced a lot decrease than sports activities, appears to get extra of the emotional response.”
Michael Rapino, Reside Nation
Evidently stung by the criticism, Oasis introduced they’d not use dynamic pricing in gross sales for the North American leg of their tour.
Reside Nation has argued up to now that dynamic pricing is a manner of chopping into the secondary ticket market (i.e., scalpers and resellers) who revenue from excessive demand for reveals with out truly investing something into making these reveals occur.
Rapino has beforehand argued that dynamic pricing permits artists to seize extra of the earnings from followers who’re prepared to pay quite than having that cash go to secondary sellers.
On the earnings name Monday, Rapino reiterated Reside Nation’s hopes for stricter regulation of the secondary ticket market, particularly as a result of “America appears to be a market the place secondary is free to run.”
Rapino stated he’d wish to see stronger regulation cracking down on the bots utilized by resellers to purchase giant numbers of tickets out from below common shoppers, in addition to speculative promoting – the apply of secondary sellers providing tickets they themselves have but to buy.
“We hope, over time, higher laws get put in place to assist the patron,” Rapino stated.
Rapino’s feedback got here because the firm reported stronger-than-expected income for the quarter ended September 30, coming at USD $1.66 per share, versus Wall Avenue estimates of $1.59.
Nonetheless, the corporate’s income took successful through the quarter, sliding 6% YoY to $7.65 billion. That was largely resulting from weak spot in stadiums this summer time, a difficulty that Reside Nation had flagged in earlier earnings calls. The corporate says it’s on monitor for one more robust stadium 12 months in 2025, which Reside Nation expects can be extra like 2023, the 12 months of blockbuster excursions from Taylor Swift, Bruce Springsteen, and others.
Listed below are three different issues we realized on Reside Nation’s newest earnings name:
1. Reside Nation is ‘hopeful’ about its antitrust combat below a Trump administration
Reside Nation is “hopeful” that the incoming Trump administration will go simpler on the corporate in its ongoing combat towards a authorities antitrust lawsuit.
The US Division of Justice sued Reside Nation this previous Might, alleging “monopolization and different illegal conduct that thwarts competitors in markets throughout the reside leisure business.” The DoJ is in search of a break-up of Reside Nation and its ticketing division, Ticketmaster. The attorneys basic of 39 US states and the District of Columbia have joined the lawsuit.
Requested by an analyst whether or not a Donald Trump presidency “goes to be an excellent factor for you,” Reside Nation President and Chief Monetary Officer Joe Berchtold stated the corporate is “hesitant” to say a lot on the difficulty, provided that “it’s nonetheless very early within the transition course of.”
All the identical, the corporate is “hopeful that we’ll see a return to the extra conventional antitrust method the place the businesses have usually tried to seek out methods to unravel issues they see with focused treatments that reduce authorities intervention within the market.”
“Focused treatments” are usually options to anti-competitive practices that fall in need of breaking apart a enterprise. One such focused treatment was put in place in 2010 as a situation for presidency approval of Reside Nation’s acquisition of Ticketmaster.
It prohibited Reside Nation from doing issues comparable to “retaliating” towards live performance venues for utilizing different ticketing corporations, or threatening venues. That settlement was supposed to finish in 2020, however was prolonged for one more 5 years after the DoJ concluded that Reside Nation had violated some facets of the settlement.
This 12 months’s lawsuit goes a lot additional, asking a federal court docket to order Reside Nation to divest itself of Ticketmaster, a transfer that Reside Nation strongly opposed even earlier than the lawsuit was filed. The corporate has repeatedly argued that the issues shoppers and policymakers are pissed off with are out of the arms of Ticketmaster. Amongst different issues, the corporate has stated that costs are set by artists and sports activities groups, and never Ticketmaster.
The lawsuit “blames Reside Nation and Ticketmaster for top service prices, however ignores that Ticketmaster retains solely a modest portion of these charges. Actually, major ticketing is without doubt one of the least costly digital distributions within the economic system,” Reside Nation stated in a response to the lawsuit.
On the corporate’s Q3 earnings name on Monday (November 11), Berchtold stated the lawsuit displays a “rather more interventionist philosophy in the present day than you’d anticipate of a Republican administration.”
He added that Reside Nation can be able to “have interaction” with the brand new administration as quickly because the administration itself is prepared.
“They should get via the appointments and get issues settled on their finish, however we’d definitely be hopeful that we may begin partaking with them early subsequent 12 months,” Berchtold stated.
2. Reside Nation predicts 20% of live performance capability will finally go to superfans
Many music corporations in the present day are speaking the discuss in terms of higher monetization of superfans, however Reside Nation argues that it has been strolling the stroll for a very long time.
“We’ve been promoting to the tremendous fan for fairly some time,” Rapino stated, noting that at Reside Nation this section of consumers who’re prepared to pay for a greater expertise are known as “the premium fan.”
“That’s sort of been an ongoing ability set we’ve had endlessly,” Rapino stated.
And he believes there’s rather more that may be carried out to increase superfans’ market share of reside occasions. He famous that most of the renovations of Reside Nation-owned venues embrace a rise within the share of VIP seats. Rapino thinks he can develop the premium section of live performance tickets to 20% of all gross sales.
“We at all times promote out of the packing containers, promote out of the premium stock first. We by no means have an issue promoting that,” he stated.
“That could be a huge a part of our CapEx and our [refurbishing of venues] in addition to our new buildings once we’re constructing them. We’re beginning with this mandate that they should have a sure increased share of premium seats and lounges and experiences. So these venues begin with a a lot better return.”
3. ‘Ticketmaster is a expertise firm’
One of many arguments the US Division of Justice is making in its antitrust case towards Reside Nation/Ticketmaster is that the tie-up of those two corporations means “music followers in the US are disadvantaged of ticketing innovation and compelled to make use of outdated expertise whereas paying extra for tickets than followers in different nations.”
Reside Nation couldn’t see it extra in a different way. Actually, the corporate’s management has argued that Ticketmaster grew to become the dominant participant in ticketing by creating higher applied sciences than the competitors. Due to that expertise, Ticketmaster is ready to “promote tickets at a quantity that others have been unable to deal with,” Rapino stated on the earnings name.
He might have been referring to the latest ticket gross sales for Oasis’ world tour subsequent 12 months, which Rapino described final month as “the largest on-sale in historical past” with “probably the most demand in historical past.”
“Ticketmaster is a expertise firm. So [we’re] going to proceed to be creating merchandise on each an enterprise and a market foundation.”
Michael Rapino, Reside Nation
At a latest Bloomberg convention, Rapino stated the on-sale of Oasis tickets was hit by “multi billions” of bots attempting to seize tickets for the secondary market.
“We’ve got the very best platform on this planet. It’s very arduous when you have got 10 billion bots hitting your system at [the start of sales] to steal your tickets… I’m so blissful the system didn’t go down. We stopped them. We bought it carried out.”
On the earnings name Monday, Rapino stated investments into Ticketmaster’s expertise – each on the again finish and on the consumer-facing aspect – will proceed.
“We spend tens of tens of millions of {dollars} in capital on Ticketmaster,” he stated. “We proceed to innovate the merchandise that we provide – on the enterprise aspect – to our venues, to promoters, others who use the platform… that’s included so much round pricing expertise to assist all people perceive the market worth of the content material they’re delivering.
“Actually additionally it’s on the advertising aspect, creating nice advertising science capabilities to assist folks market their reveals, huge investments over the previous couple of years on persevering with to boost our potential to deal with that top demand on sale.”
He added: “Ticketmaster is a expertise firm. So [we’re] going to proceed to be creating merchandise on each an enterprise and a market foundation.”Music Enterprise Worldwide
