BlueHaze

The $2.5B merger of Live Nation and Ticketmaster into Live Nation Entertainment is actually a good thing for consumers and a good thing for the industry. In short, consumers will benefit as average ticket prices will come down for three reasons: (1) more competition in ticketing, (2) more incentive to fill Live Nation tours and venues, and (3) greater scrutiny from artists, fans and government. Let’s take them one by one:

#1. More competition in ticketing.
Prior to the merger, Ticketmaster was a third party ticketing service that had arms-length deals with thousands of promoters and venues around the world. By merging with the world’s largest concert promoter, Ticketmaster is essentially telling all other concert promoters that they should be going elsewhere for their ticketing business as a contract with LNE is essentially a contract with their competitor.

The same holds true of venues. If enough venues owned by AEG Live, Cablevision (MSG), etc do what they should – and reconsider a TM contract as it will be supporting their competitor, then more venues will cut their contracts and bring their ticketing business elsewhere. This conflict of interest opens up the market to greater competition for ticketing businesses, which in turn should mean lower fees and lower overall prices to consumers.

#2. More incentive to fill Live Nation tours and venues.
All stakeholders in the live music business (promoters, venues, ticketing companies, artists, etc) have an incentive to fill the house. The more tickets sold, the better for everyone involved. That said, artists want to maximize ticketing revenue while venues want to maximize capacity as they make the bulk of their money on concessions, parking, etc. In the merged LNE, the consumer offering is about maximizing value in the vertically integrated company – across ticketing, concessions, parking, fan club sign-ups, merchandise, etc. The ticket becomes the gateway to the event. The combined company, especially with the Front Line and 360 artists on its roster, truly has an incentive to offer lower priced tickets to get more fans out to concerts as the ancillary revenue will make up for the loss on ticket sales.

#3. Greater scrutiny from artists, fans and government.
Bruce Springsteen’s recent ticket snag and the current class action lawsuit filed in Canada are but two examples of how Ticketmaster will continue to undergo scrutiny for its practices. The point to make here is that the Ticketmaster/TicketsNow relationship should undergo scrutiny regardless of the Live Nation merger. The merger does not afford Ticketmaster a greater market share or monopoly on the industry. The merger allows Ticketmaster to regain the Live Nation share it lost when that contract expired last month. In fact, simply as a result of this merger, there will be increased government scrutiny placed on LNE and it will actually become MORE difficult for the promotion arm or ticketing arm to profit from tickets sold to you in the secondary market… which is why the primary market will have to become more efficient, meaning better pricing for you. Plus, unsold inventory is now doubly hurtful, which means lower prices for less demanded tickets.

Who wins

*Consumers win with lower prices and a more integrated artist-to-fan experience around live music.

*LNE wins as a vertically integrated music company poised to reap the majority of revenue originating from the one side of the business that’s actually making money – BUT, they may lose a number of profitable accounts on the ticketing side as a result.

*Smaller or secondary market ticketing companies have an opening to secure new promoter and venue deals.

And as for BlueHaze, we’ll be here for you every day to help you find the best shows, connect with other fans, and enjoy more live music.
As always, comment below or drop us a note at feedback@bluehaze.com with your thoughts.

Thanks,
Mark