Live Nation Explains Ticket Pricing To You!

I also draw you a picture!

Good day!

I drew you a picture this morning to show you what I’ve been thinking about with the newsletter and podcast conversations:

Part of the reason to draw the picture is to clarify my thinking about how to give you the most value for your time reading this and to focus my attention.

I wrote the manifesto recently, but the core things I want you to learn:

• How to sell more tickets.

• How to make more money.

• How to grow a bigger fan base.

Underneath, you’ll see some of the primary reasons I’ve identified that get in the way of these goals.

This isn’t all of them.

Things I’ve left out of this initial drawing that matter:

• No market research.

• “We’ve always done it this way.”

• “You don’t want it bad enough” management mentality.

I share all this because I want you to see the work that goes into refining your positioning and making sure that your value proposition is evident through every touchpoint.

The benefits for you and your business:

• Better customer targeting.

• Less wasted motion.

• Easier sales process.

To today’s note on the Live Nation blog post about ticket pricing.

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The Truth About Ticket Pricing:

I’ve traded some messages with folks about this for the last few days.

So, let me put together a few thoughts on this post and see if I can offer you something useful to think about as well.

— The release of a post like this signals to me that the antitrust arguments and process are starting to reach a point where action might really be on the agenda.

This note reads like a document that is directly aimed at government officials and regulators.

— The points “junk fees” conversation is taking place on Joe Biden’s turf. That’s a big win for Joe Biden and the government.

Why?

“Framing”.

You want the conversation to happen on your terms, using your frames, and ideas because it reinforces your point of view.

What both sides are really talking about is “drip pricing” which works, but it also pisses buyers off.

— There are a few points that make you go, “HMMM.”:

• The lack of importance and power that the full integration of many parts of the live business gives Live Nation on fees, costs, and, ultimately, prices. As the Fool.com points out, rolling everything up is where the real money is.

• The argument that the “commission” of 5-7% can’t add anything to the ticket price. If we take it at face value, the “commission” on a ticket is likely adding $10-15 to the face value of a ticket to a major act like Pearl Jam with $185 face value on their current tour. While, when I buy a $6 app on the App Store that adds less than $2 to the cost of the app. A larger percentage, but when you get into bigger numbers even a taste adds up.

• The positioning of Live Nation as being in all of these businesses almost in an altruistic manner because they can barely make ends meet its such a low margin business with so much risk.

• The use of AOI (adjusted operating income) to show you the margin of the promotion business would likely cause a savvy investor to look into the numbers very closely because it is a non-GAAP metric and they can be potentially misleading.

Important Points:

— The “Experience Economy” is a thing.

It has driven demand and it has driven sales.

The CBC looked at the reasons “funflation” has captured the live entertainment business.

SeatGeek shared data with The Atlantic showing that the average price from of a concert ticket had jumped from $116 in 2019 to $240 in the same period in 2023.

Even if you don’t like averages, like me, the direction and intensity of the direction are evident.

— Blaming high prices on the secondary market is a bit of a red herring.

I’ve talked about competition here since the start of the newsletter and with vertical integration and exclusive ticket deals, the only way that competition is introduced into the American market in many cases is due to the secondary market.

Ticketmaster Resale drove was $4.5B in revenue in 2022 which more than doubled the gross revenue from 2019.

I’d have to ask a reseller for the numbers, but I’m guessing that the commission is much higher than the 5-7% number given on primary transactions.

Laying the entire topic at the feet of StubHub and reseller platforms without the context is misleading.

My Thinking:

If I’m the general counsel or an executive in a company that has a loud of attention especially fans complaining and negative stories about the customer experience, I’m coming up with this kind of stuff and a lot more.

Not doing something like this is malpractice.

The measure of something like this isn’t in one piece of communications.

It is how well does the holistic campaign work to change opinions, limit negative impacts to the business, or whatever intended outcome is at the core of the campaign.

We can’t measure that based on one post.

For people that sell tickets, I’ve got a few thoughts:

• You should be making informed decisions about your distribution and your marketing.
  
  Does it make sense to partner in a way that opens up your distribution or limits it?
  
  As far as your marketing goes, we need an entire series of newsletters and podcasts to discuss what is going on there.
  

• You should pay attention to who controls your customers.
  
  One big issue with partnering with anyone to sell your tickets is whether or not you can gain access to the customer and in what way.
  
  I’m cautious about how impactful I think most of the data you are looking at is to begin with.
  
  Again, it is looking backwards. You are moving in the opposite direction into the future. So you have to ask yourself the question, “What would have to be true for this to continue to be true?”
  
  So, data may not be very valuable.
  
  Knowing the customer and being able to develop a profile and a relationship with that customer is super important.
  

• It probably pays to rethink your revenue engine.
  
  Where does your money come from?
  
  When was the last time you rethought your revenue streams?
  
  Can you find new ways to expand business? Or, are you just relying on raising prices in the hope that people will just go ahead and buy your tickets?
  

• Be very careful with your partners.
  
  In most cases, you bring what you do well together with what the other business does well.
  
  But you want to be careful that you aren’t teaming up with someone or something that will detract from your brand equity.

What do you think about this?
Did you learn anything new from the Live Nation post?
Are you skeptical of the numbers? Do you agree with them?
Does your team or building get the support they need?

Let me know by replying to me here. Or, you can send me a text, letter, or you can call me.

Or, just let me know what you are working on, thinking about, or reading. I love to hear from you.

Plus, you can drop a comment in the Slack Channel where we were discussing this today.

New episodes of the podcast incoming with Doctor Sleep Fix, Dr. Bijoy John, coming up this week.

You’ve made it here! Thank you for reading.

Can you do me a favor by sharing this with one colleague that brought up the Live Nation blog to you or might have a hot take on the subject…?

I appreciate you!

Take it easy!