By Jim McCarthy Jun 1, 2009 2 comments

Why Live Nation is REALLY Killing Convenience Fees

This story reports that Live Nation is eliminating convenience fees on some concerts this summer, and then begins to speculate why, oh, why this could be happening.

The official story, from LN CEO Michael Rapino is that it’s because “business is good,” according to the story.  Well, yeah, but it isn’t so good that Live Nation doesn’t occasionally have to sell a building to stay cash flow positive, and if you believe they’re doing it because they’re satisified with the amount of money they’re making, well, that’s just crazy.  Are you satisfied with the amount of money you’re making?  I didn’t think so.  Live Nation, like any other company, is perfectly within its rights to try to earn a profit.

This piece speculates that instead it’s because the company is trying to curry favor from the public in advance of the approval of the LN-Ticketmaster merger.  Well, maybe.  Sorta.

But there’s an even simpler explanation: they don’t need to charge a convenience fee.  They’re the ticketer AND the promoter AND the house AND in some cases the act.  They can just roll it all up into one price because everyone who is getting a cut is either the act or themselves.

It’s a smart move because they get credit for being generous without losing a thing, and at the same time, probably annoying people less because there’s more price transparency.

Just so we’re clear: it’s not because business is so good that they don’t want any more money or because they feel your pain or even probably to pull the wool over Congress’s eyes, which they don’t need to do.

In fact, the bigger question for a Live Nation show sold on the Live Nation system in a Live Nation house (and, while we’re at it, by a Live Nation act) is why should there ever be a convenience fee?

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2 Comments

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