Live Nation (LYV) CEO Michael Rapino speaks at Goldman Sachs:
Benefits of Leaving IAC’s (IACI) Ticketmaster: We’ve been debating it all year. Ticketmaster is great but last year we produced over 10,000 shows and dealt with 40 million consumers, and we don’t even know their names. If we can access them directly there is huge benefit, and we think that we have the technical ability to do the ticketing. “If we can control that consumer” and sell them directly, we can get more out of each transaction.
Scalpers/brokers/”aftermarket” for ticket sales: We’d love to be in that market, instead of ceding it to Ebay’s Stubhub and scalpers. Artists want to be in that business, too. Did some testing this summer with premium and VIP tickets. We want to sell each of the 20k seats at Madison Square Garden for maximum price — need to figure out what that is. Same dynamic pricing/yield management challenge that hotels, airlines, etc. have. Average consumer goes to 1.5 shows a year – it’s a special event so they’ll pay up.
Will Music Labels Get Into Concert Business? Will You Get Into Music Sales? Everybody wants to be in the live business for some reason now. But our business isn’t easy. $3 billion in assets. Lots of work, low margin. Not a lot of upside. Can we add additional revenue streams? Maybe: Now concert business most valuable while CDs are the commodity. For big artists who can sell tickets, “we are the best business partners they can find.”
Artists love us! We are giving out $1.5 billion to 1,300 artists a year. Artists get paid “with a bag of money” every night after their show. There’s no debate about accounting — unlike music sales, where dollars can take years to flow in after sale (if ever).
On rumoured “Madonna Leaves Warner Music, Signs With Live Nation” Deal. Won’t address it head on. But coyly says he understands why artists might want to work directly with him.