Live Nation wants to price more concert tickets based on demand and add more VIP options

News Room
By News Room 4 Min Read

After a massive two-year rebound in concerts, Ticketmaster parent company Live Nation Entertainment Inc. is hoping to keep the momentum going for its top and bottom lines — in part via efforts to upsell customers on premium-tier offerings and to price tickets based more directly on concertgoer demand.

The company, during its quarterly earnings call on Thursday, said it still had plenty of room to expand its so-called platinum ticket offerings — those that use “dynamic pricing,” in which prices are tied to fluctuations in supply and fan enthusiasm — and to install more VIP boxes and offer more food and fancier drink options, particularly at its amphitheaters.

Executives discussed those efforts as some analysts brace for slower growth in concert demand. Touring costs and ticket prices have jumped since pandemic restrictions loosened, and Ticketmaster’s fees continue to be a source of irritation for customers.

Meanwhile, the company, which dominates the industry, faces a Justice Department investigation into its competitive practices. Over the past year, President Joe Biden and some U.S. and state lawmakers have also tried to take action against hidden fees, require disclosures about abrupt price changes in tickets, or otherwise curb dynamic pricing.

Live Nation
LYV,
+1.49%
Chief Executive Michael Rapino said on the call that outside the U.S., the company’s platinum-ticket rollout was “in the first inning,” while in the U.S., it was closer to the “fifth inning.”

He said the strategy was a smart move for artists and would help them make more money that would otherwise go to scalpers.

“Promoters are anxious for it,” he said. “Artists are anxious for it, because they see when they sell an arena in Baltimore versus Milan right now, they look at the grosses and say, wow, we’re leaving too much on the table for the scalpers. Let’s price this better.”

He said that approach to pricing was typically used on higher-end tickets, like those closest to the stage, but that it could also be used for different parts of different venues.

“It will increase your take flow and sell-through rate all the way to the time you open the gates up,” he said. “So we still think that’s a multiyear opportunity to continue to grow our top line plus bottom line.”

He said that as concerts have become more important to artists’ income, more performers over the years have embarked on global tours.

Rapino also said there was untapped potential in leaning into upscale “hospitality” offerings at amphitheaters, particularly amid the postpandemic surge in demand and in “revenge spending.”

“We’re getting 20%, 30% returns on capital when we turn that grassy area into a VIP club, a membership club,” Rapino said.

“If you look at our overall amphitheater business, about 9% of it is premium,” he said. “We think that should be 30% to 35%, to give you kind of macro numbers.”

Chief Financial Officer Joe Berchtold, during the call on Thursday, said the company didn’t have much new to report on the state of the Justice Department investigation.

“We continue to answer any questions they have,” he said. “They control the timing. And we’ll watch it play out, but we don’t have any specific updates.”

Shares of Live Nation were up 2.2% on Friday. The stock is up 39% over the past 12 months.

Read the full article here

Share This Article
Leave a comment

Leave a Reply

Your email address will not be published. Required fields are marked *