Live Nation-Ticketmaster Story in the NYT

If you’re in the live entertainment business, yesterday’s piece in the NYT is a must-read, if for no other reason than to get a good background on the biggest organization in our business.

And while you’re at it, you might as well read some of the reactions:

Jerry Del Colliano at the Inside Music Media blog says, “This is America where if you can make it to the top, you get government approval to not only screw your customers royally but — and this is really important — inadvertently screw the future of your industry. I’m out ahead of this early but that’s my prediction — Live Nation/Ticketmaster will end up being a turkey.”

David Pakman at Pakman’s blog says, “The future of the business is atomized and decentralized. It is one where the collective power of the many fans actively engaged in discovery and sharing have more power than a few senior execs calling the shots about marketing budgets. Yes, there will always be superstars, largely gained by taking those who are bubbling up and pushing them through the mass media still remaining. But today’s superstars sell a fraction of records/downloads as the ones from years past.”

Nancy Nall at her blog had a very interesting discussion of her experience going to shows as a younger person and the way it is today.  Here’s a tidbit that I thought was particularly entertaining:  “There aren’t many days I think, ‘thank God I’m an old bag’, but friends, I saw Elton John blow the roof off of St. John Arena, and I was so close I could almost pluck those big sun­glasses off his face, and it cost me ten bucks. There were cyn­ics and money-grubbers in the busi­ness then, too, but we got out with the shirts on our back.  These days, I’m shop­ping for tick­ets to “Tosca,” which is play­ing at the Detroit Opera House the week­end of our anniver­sary. Tick­ets are steep — push­ing $100 for the main floor — but you’re pay­ing for a lot when you see an opera.”

Most of what I’ve read goes along in that vein.  You’ll recall I wrote about what I thought was the crucial issue of the success (or not) of the merger a few weeks ag0.  The late 20th and 21st century have not been particularly favorable to vertical integration, but sometimes it works.  I still believe in the marketplace too, and since tickets are an item people can do without (meaning they’re price elastic), no company can charge more than they’re worth and still sell them.

If the new Live Nation doesn’t get the formula right for the consumer, there’s no way it can make people buy.  They’ll simply substitute and market share will flow out of live music, as it did with recorded music, so it behooves the new company to get that formula right.

U.S. Steel was once the largest corporation in the world, and it got that way by buying up all its rivals and turning them into one great big behemoth.  The formula worked, but eventually it didn’t.  The company is still one of the biggest steel producers in the world today, but according to wikipedia, “produces only slightly more steel than it did in 1902.”

Size is not a guarantee of success and at times is a serious liability instead.  The guys at Live Nation are smart and accomplished, so my assumption is that scale alone isn’t their game plan.