Music industry prepares for post-merger landscape

Sat Jan 30, 2010 2:05am EST
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By Ray Waddell

NASHVILLE (Billboard) - After nearly a year of intense scrutiny, political posturing and consumer outcry, it's time for the music business to come to grips with its new superpower: Live Nation Entertainment.

At a time when live entertainment remains one of the healthier sectors of the troubled music industry, the combined Live Nation and Ticketmaster stands to dominate each part of that sector: touring, management and ticketing.

Live Nation is the largest promoter and venue operator in the world, owning the majority of North American amphitheaters and promoting most of the world's top-grossing tours, including U2 and Madonna in 2009. Ticketmaster's Front Line Management, which has for the past few years aggressively acquired rival management firms, boasts relationships with more than 200 major touring acts, including the Eagles, Neil Diamond, Van Halen and Christina Aguilera. And Ticketmaster Entertainment sold 14 million-plus tickets, valued at more than $8.9 billion, in 2008.

The new company, led by president/CEO Michael Rapino and executive chairman Irving Azoff, would control the majority of box-office dollars, the myriad revenue streams from concert ticketing and the growing e-commerce from fan-ticket interactions. Live Nation Entertainment will also aggressively pursue competitive advantages in merchandising, VIP ticketing, fan clubs and, ultimately, physical distribution.

"Those are the things where I think I'm going to add the most to the equation," Azoff told Billboard in an earlier interview. "And Michael is going to run the ticketing and the promoting operations."

As a result of concessions that the newly merged company made to secure the approval of the U.S. Department of Justice (DOJ), Live Nation will license Ticketmaster's primary ticketing software to competitor AEG for five years and is expected to sell Ticketmaster's automated ticketing service provider, Paciolan, to Comcast-Spectacor.

But ticketing is no longer the core business here. Instead, it will be the linchpin of a broader-based operation aimed at profiting from every aspect of the artist/fan relationship.

CLIENT CLOUT   Continued...