The live-events business is seeing one of its biggest boom years in recent memory, and few companies are capitalizing on it as well as Live Nation.
The live-entertainment company that owns Ticketmaster clocked $2.28 billion in revenue in its concerts division in Q1 2023, up 89% YoY. A total of 19 million fans attended Live Nation shows in 45 countries in Q1, an increase of 73% YoY compared to the 11 million fans in Q1 2022.
Its ticketing division generated $677.7 million, up 41% YoY. That was on the strength of some big-name tours by artists such as Beyonce, Bruce Springsteen and Drake.
However, for investors wondering what happens when superstar tours wrap up, or if iconic rockers like Springsteen retire, in the view of Joe Berchtold, Live Nation’s President and CFO, the supply of artists to the live business just isn’t a problem nowadays.
That’s thanks in large part to streaming services like Spotify and social media sites like TikTok.
“The reality is, today, on the supply side, you’re seeing artists able to emerge, develop and build global followings in a way that could never happen historically,” Berchtold said during a Q&A session at the J.P. Morgan Global Technology, Media and Communications Conference on Tuesday (May 23).
“We’re very thankful for the Spotifys of the world. We’re very thankful for the Instagrams, and TikToks that let [artists] build global brands,” he told the session’s host, J.P. Morgan analyst David Karnovsky.
“We certainly wouldn’t have heard, three years ago, [about] a lot of the biggest artists that are out there today. Bad Bunny last year, Karol G this year. You’ve got a Mexican rapper who’s the number one artist streaming on Spotify these days,” he added, referring to Peso Pluma, who’s currently topping the Spotify charts in Mexico.
Like others in the business, Berchtold sees a lot of potential in the globalization of musical artists’ fan bases that streaming services and social media platforms have made possible.
“We are getting lots of other sources of music that maybe once were regional [that] are now going global. [They] were selling out mid-sized buildings, now they’re selling out stadiums. So you’re seeing that supply continue to build and I don’t see any letting up in that on the demand side.”
“You’re seeing artists able to emerge, develop and build global followings in a way that could never happen historically.”
Joe Berchtold, Live Nation
In that regard, Berchtold is on the same page as his colleague Michael Rapino, Live Nation’s founder and CEO, who said during the company’s most recent earnings call in early May that the industry is “seeing this encouraging new supply strategy, where for many years, it was all about US- or UK-based artists that filled the charts and filled the stadium [globally]. And most other talent was domestic.
“This is the real breakout year where the world and the consumer are truly global. And now you can see artists coming from Latin America and Korea and becoming global superstars.”
Berchtold’s conversation with Karnovsky was wide-ranging. Here are two other things we took away from his appearance at the JPMorgan conference:
AI has the potential to transform the ticketing industry – and it already has
Asked by Karnovsky about the potential of AI technology in the concerts and ticketing business, Berchtold said Ticketmaster has been employing AI for some time already.
“We have a lot of areas in Ticketmaster where we use what we used to be called ‘machine learning.’ We… take a lot of data inputs and use [them] to figure out [how to] make life easier for everybody. So to me, it’s more of an infrastructure component that runs throughout Ticketmaster.”
Going forward, Berchtold said there are numerous areas where AI could improve Live Nation’s business, from helping to develop new shows for venues, to creating marketing campaigns that are “much more efficient and targeted in terms of how we market. Pricing is another one, as we continue to think about how you optimize pricing and move even more towards a one-on-one relationship with fans,” he said.
Berchtold sees potential for AI in the tricky area of customer service.
“Ticketing is a complicated customer service, because when fans have a need they usually have a need right now,” he said, comparing it to customer service in the airline industry.
“I can’t wait till tomorrow because I’ve got a show tonight, or I’ve got an issue that has to get resolved… Using AI to help inform that will be great. So [these are] things that can all help us, because they help us either get more efficient or more effective at our job.”
The rush to legislate ticket prices is shining a light on the realities of the business
Ticketmaster has repeatedly defended the practice of dynamic pricing, on the argument that if ticket prices don’t respond to demand, it will be scalpers who will benefit by selling those tickets at a huge mark-up over their original price, while artists and concert companies get none of that additional revenue.
“What’s happening at the state level is obviously that the scalpers have figured out they’re losing the federal battle,” Berchtold said.
“And so they’re trying to go and run around the states [in the] hope that they can sell a bill of goods to some senators who don’t understand the full picture. And you get some bills pop up. The vast majority of the time, pretty simple conversations by sports teams, by artists, their representatives explain reality and [the bills] get killed,” he said.
Massachusetts legislators John Velis and Dan Carey recently introduced a bill in the state legislature to ban dynamic ticket pricing.
“No matter the event, consumers are tired of the lack of transparency from ticket sellers. Watching ticket prices increase as you navigate through the purchasing process is devastating. Sellers should not be able to hide behind websites while consumers are left out in the cold,” Carey, a state House Representative, said in a statement.
“the scalpers have figured out they’re losing the federal battle. And so they’re trying to go and run around the states [in the] hope that they can sell a bill of goods to some senators who don’t understand the full picture.”
Joe Berchtold, Live Nation
Berchtold reiterated Live Nation’s position that the company isn’t against all attempts at regulating the ticketing business. In particular, Live Nation’s Rapino has said he’s in favor of efforts to introduce “all-in” ticket pricing, where the advertised price includes all fees. One such bill is the federal TICKET Act, introduced last month by Republican US Senator Ted Cruz of Texas and Democratic US Senator Maria Cantwell of Washington.
Berchtold commented that “as painful as the last six, eight months have been” – referring to the recent wave of proposed legislation – it’s actually been helpful to the industry in some ways, “because it’s shone much more of a light and made more transparent what goes on.”
Berchtold suggested legislators are simply unaware of how the ticketing business works – but in the process of attempting to legislate it, they are learning.
“I think that the amount of tension, press, conversation [around the issue] has made more transparent how it works. That transparency is good for us, because I’m very confident in the things that we do. We start with the artist… we serve the artist, and I don’t think that, ultimately, that’s going to be found to be wrong.”Music Business Worldwide