Live Nation swings to a profit as concert attendance grows
Bolstered by reviving concert attendance, Live Nation Entertainment Inc. posted a 23% jump in revenue and reversed a year-earlier loss.
The world's largest concert promoter, which merged a year ago with Ticketmaster, benefited from rising attendance at its events such as the U2 tour, as well as higher spending by concertgoers on concessions, parking and other high-margin products.
The report appears to bode well for the overall concert business, which slumped last year as consumers, spooked by the wobbly economy, pared down discretionary spending.
Live Nation, along with many others in the concert industry, revamped its approach this year by lowering the prices for less expensive seats on the lawn and in the back of the venues, while raising prices for more desirable seats closest to the stages.
To attract more value-minded consumers, Live Nation teamed up with Wal-Mart to add ticket kiosks in stores. And it partnered with online discount company Groupon to create Groupon Live, which has sold 422,000 discounted tickets so far this summer for Live Nation. Live Nation also pumped up its music festival business, adding eight new festivals this year for a total of 40.
The gambits worked. Attendance rose to more than 13 million in the three months ended June 30, up 6% from a year earlier. For the first six months of the year, attendance climbed to just over 20 million, up 4%.
The Beverly Hills company said sales rose to $1.56 billion for its second quarter ended June 30, up from $1.27 billion a year earlier. It posted a profit of $13.3 million, or 7 cents a share, for the quarter, compared with a loss of $32.8 million, or 19 cents a share, a year earlier.
"Despite tough economic conditions, if we price concerts rights, fans will come," said Live Nation Chief Executive Michael Rapino said in a conference call with analysts.
The company's shares lost 60 cents, or 6.4%, to close at $8.78 prior to the earnings release.
-- Alex Pham
Photo: Bono of the rock group U2 performs at a July concert in Montreal promoted by Live Nation. Credit: Paul Chiasson / Associated Press