Live Nation: Strong ticket sales boost first-quarter revenue

Concert giant Live Nation Entertainment Inc. posted an uptick in first-quarter sales, driven by higher ticket sales along with losses that were slightly less than expected as the company continues to spend heavily on upgrading its online ticketing infrastructure.

The Beverly Hills-based company, which also operates Ticketmaster, said Wednesday that revenue grew 2% in the quarter ended March 31 to $868 million, up from $849.4 million a year earlier. It also posted a net loss of $70.2 million, or 37 cents a share, up from a $54.3-million loss, or 27 cents a share, in 2011. The losses stem in part from the company's multiyear effort to build up its online marketing, ticketing and e-commerce capabilities.

Analysts polled by Thomson Financial on average had expected slightly higher revenue at $870.8 million, as well as higher losses of $71.3 million, or 39 cents a share.

Live Nation's Chief Executive Michael Rapino noted that ticket sales were especially strong in the first quarter. 

"Importantly, we also saw a 6% increase in ticket sales this quarter as compared to last year, reflecting strong demand for our live events and giving us great confidence that we are well positioned for the summer concert season," Rapino said in a statement.

The ticketing and live events company also announced it had acquired Cream Holdings, a British organizer of the Creamfields electronic music festivals and DJ club events. The companies did not disclose the purchase price.

Live Nation said Cream Holdings founder and chief executive James Barton will become president of Live Nation Electronic Music, charged with leading the company's expansion into the rapidly growing genre.

Live Nation's shares gained 10 cents to close at $8.31 prior to the earnings release.  

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Photo: A Creamfields music event. Credit: Creamfields.

Live Nation stock takes a stage dive on earnings miss

Shares of Live Nation Entertainment Inc., which did not disclose its fourth-quarter net loss when it reported its earnings Thursday, took a big hit Friday as investors got wind of the number.

The Beverly Hills-based concert and ticketing giant on Friday said it lost $98.2 million, or 54 cents a share, in the quarter ended Dec. 31, 77% more than analysts' expectations of a $55.5-million net loss, or 30 cents a share. The estimate was an average derived from a survey of five analysts by Thomson Reuters.

The earnings miss sent Live Nation's stock tumbling as much as 10% in early Friday morning trading. The stock stabilized somewhat in subsequent hours, trading down 47 cents, or 4.5%, to $10.03 as of 10 a.m. PST. 

Live Nation's results "were below expectations as corporate costs in particular were higher than expected," Ben Mogil, an analyst with Stifel Nicolaus, said in a note to investors.

Live Nation Chief Executive Michael Rapino, in Thursday's conference call with analysts, noted that the company was two-thirds of the way through a three-year, $112-million effort to modernize its ticketing platform.

He said the company's Ticketmaster, which until recently was considered a "technology laggard," has significantly beefed up its online sales and social marketing capabilities in the last two years.

Such moves were costly but necessary, Rapino said, as the company faces increased competition.

The heat comes from large rivals such as AEG Live, which is rolling out its Axs ticketing service, as well as small online competitors that allow independent bands to sell their own tickets without the help of an established ticketing service.

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Photo: Bruce Springsteen's 2012 tour is expected to be among the biggest of the year and may help boost Live Nation's prospects. Credit: Carolyn Cole / Los Angeles Times

Live Nation: Still losing money, but not as much

After a year of singing the blues in 2010, concert and ticketing giant Live Nation Entertainment Inc. had cause for a modest celebration, posting a 6% uptick in revenue and narrower losses in 2011 despite a tough global economy.

Propelled by strong sales of concerts from Jimmy Buffett, Van Halen, Roger Waters and others, the Beverly Hills company on Thursday said sales for the year that ended Dec. 31 were $5.38 billion, compared with $5.06 billion in 2010.

Meanwhile, its net loss narrowed to $83 million for 2011, from $228.4 million in 2010, as Live Nation de-emphasized its less profitable amphitheater concert venues and focused on its higher-margin arena events. As a result, ticket revenue largely represented by its Ticketmaster unit grew 14.5% last year, while the concert promotion business eked out a 2% gain in sales.

“The bottom line is that they’re still losing money, but not as much as they had before,” said Gary Bongiovanni, publisher of Pollstar, a trade publication that tracks the live event business.

Live Nation also shrugged off the loss of ticket sales from the NBA lockout last quarter, posting a 6% jump in ticketing revenue. That’s mostly because of strong presales of tickets for 2012 concerts, Live Nation Chief Executive Michael Rapino said in a call with Wall Street analysts.

For the fourth quarter that ended Dec. 31, overall revenue fell 4.2% to $1.19 billion, from $1.24 billion a year earlier. The company did not report a net income figure, saying only that operating losses narrowed to $66.7 million, down from $86.1 million in the fourth quarter of 2010.

Live Nation ended the year with $844 million in cash.

Looking ahead, Rapino said 2012 is shaping up to be a decent concert year, particularly for music festivals and with major acts such as Bruce Springsteen and Dave Matthews scheduled to hit the road. He predicted that attendance would see a “low single digit” percentage increase, though overall ticket revenue would be flat to slightly higher for the year.

Bongiovanni agreed that music festivals appear to be doing well, with events such as Coachella and Stagecoach sold out months before they are set to happen.

“The key this year is whether tickets will be priced right,” Bongiovanni said. Many of Madonna’s tickets, for example, are selling well above $300 apiece, he said. “She’s not meeting up with much price resistance, but that doesn’t mean others will be so lucky.”

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Photo: The stage from Roger Waters' The Wall tour last year. Credit: Ticketmaster

 

Facebook offering tickets with Ticketmaster, ScoreBig, others

Five major ticket sellers, including Ticketmaster, StubHub, ScoreBig, Eventbrite and TicketFly, launched an online store on Facebook Wednesday night -- all hoping to tap into the social network's 800 million users to boost sales.

The announcement is part of Facebook's ambitious plan, unveiled in September, to become an entertainment hub for its users, an online touchstone for discovering new bands, watching the latest viral videos, finding local concerts, and organizing friends for a night out on the town.

That extension, from online socializing to real-world get-togethers, is what live entertainment companies such as Ticketmaster and ScoreBig want to capitalize on. 

"Today’s launch marks a new frontier for fans of live events," said Adam Kanner, chief executive of ScoreBig, an online name-your-bid ticketing company based in Hollywood. "Our members and their Facebook friends will now have a much more robust experience discovering live events.” 

Ticketmaster also has high hopes for its Facebook storefront. Already, the company is among the world’s largest e-commerce sites, selling billions of dollars worth of tickets through its online platform each year. But the Beverly Hills ticketing giant thinks it can do even better by leveraging social media to get people to go out more.

Its Facebook application, for example, looks at each user's list of favorite bands or genre of music, as well as their approximate location, to recommend upcoming concerts in their area.

"We can use that data to make targeted recommendations about what people want to go see," said Kip Levin, Ticketmaster's executive vice president of e-commerce. Levin and other ticketing industry executives estimate that about half of concert seats go empty simply because fans weren't aware the bands were in town.

"It’s really about focusing on the online fan experience and making it easier for them to learn when their favorite band is coming to town, organize with their friends and paying for it," Levin said.

Media analysts say the move to social networks is a no-brainer for companies such as Ticketmaster.

"In any business, when you can take your business directly to where 800 million people are already congregating, it’s a good move," said James McQuivey, a senior analyst at Forrester Research in Cambridge, Mass.

The shift to social media carries a risk for Ticketmaster, whose brand is among the most reviled among consumers. Its young, charismatic chief executive, Nathan Hubbard, said at a San Francisco conference in November: "People want to eat my kids, they're so angry." 

But Hubbard is forging ahead, putting the company out on Twitter and Facebook in hopes of repairing its reputation and winning over customers. 

"People say they hate a lot of things -- advertising, arrogant newspaper reporters and Ticketmaster," McQuivey said. "But the fact is, they still need and value those things. Ticketmaster doesn’t need to win your hearts. They just need to win your mouse clicks." 

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Live Nation acquires BigChampagne

On the Internet, data is king.

So, it's no surprise that Live Nation Entertainment Inc. has acquired BigChampagne, an online measurement company that has provided a window into digital media consumer habits, particularly for music, since 2001.

Terms of the acquisition, announced Wednesday, were not disclosed.

Eric Garland, founder and chief executive of BigChampagne, said the deal arose from a meeting he had this year with Live Nation executives to request access to the Beverly Hills concert promoter's customer database so that he could analyze the live entertainment business.

Also based in Beverly Hills, BigChampagne is a 26-person boutique market research firm, specializing in how people use and pay for digital entertainment, particularly music.

"I came begging for their data," Garland said. 

Based on sales volume, Live Nation, which owns Ticketmaster, is one of the world's largest and fastest-growing online retailers, moving billions of dollars worth of tickets and merchandise through its online storefronts annually. In the first nine months of this year, the company sold more than $5 billion worth of goods through its online channels, up from $4 billion during the same period last year.

In addition, Live Nation has been quietly beefing up its online presence, forging partnerships with social network site Facebook as well as the streaming-music service Spotify in order to bolster its connections with music fans.

In September, Garland ran into Live Nation Chief Executive Michael Rapino and Ticketmaster CEO Nathan Hubbard at a Facebook event in San Francisco. The three hit it off.

"They asked me what I thought," Garland recalled. He responded that what made Facebook so powerful was the personal information that the social network had about its 750 million users, including their musical tastes, their locations, their age, their level of education, what games they played, their favorite authors and so on.

"Our company focuses on making sense of all that data and extracting the relevant thread from the mass chaos," Garland said. Live Nation and Ticketmaster have "collected billions of points of data about their customers, and they were interested in finding out ways to use that data to connect fans with the music experiences that they were offering. In the end, they bought my company."

Rapino, in a statement, said, "BigChampagne brings us a great technology platform and an innovative team to help us better understand our fans and deliver insights across all areas of our business.”

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Photo: Eric Garland, founder and chief executive of BigChampagne. Credit: BigChampagne.

Live Nation says concerts business is stabilized

The live music business, which last year faced a crisis of audience apathy that resulted in empty seats and canceled engagements, has stabilized this year and is expected to remain healthy into 2012, said Michael Rapino, chief executive of Live Nation Entertainment Inc., the nation's largest concert promoter and ticketing company.

“Live events are a strong … consumer proposition, despite the tough economic times,” Rapino told analysts during a discussion of the company’s third-quarter results Thursday.

The renewed vitality of the concerts business is good news for Beverly Hills-based Live Nation, which derives most of its revenue from promoting live events and selling tickets.

Last year, the company posted a $228.4-million loss as the tight economy discouraged people from venturing out to costly shows. Compounding that was a surfeit of high-priced amphitheater concerts, like those featuring Rihanna and the Eagles, which audiences shunned in favor of newer and smaller arenas with more amenities.

This year, Live Nation and other promoters have scaled back the number of shows, lowered prices for concerts in amphitheaters and trimmed ticketing fees.

The strategy appears to have paid off so far. Although revenue was down 2.5% to $1.79 billion in the quarter ended Sept. 30, net income improved 1.4% to $51.7 million. More significantly, net income for the first nine months of the year rose to a $16.5-million profit, reversing a $104-million loss for the same period last year.

Live Nation's adjusted operating income, which excludes acquisition and other expenses, was $203.6 million for the quarter, narrowly beating analysts’ expectations of $202 million.

“They clearly selected more profitable concerts this year,” said David Joyce, an analyst with Miller Tabak & Co. in New York. “This demonstrates that, in good times or bad, people still go to at least one concert a year.”

For the fourth quarter, Live Nation said the NBA lockout could affect the estimated 700,000 pro basketball tickets it sells through its Ticketmaster business. A $10-million drop in revenue could result if the impasse between players and team owners ends in the cancellation of all games for the year.

Looking ahead, Rapino said in a statement, “we believe the stabilization of consumer demand for live events will continue into 2012.”

Still, the entertainment giant is looking to grow its business by finding ways to reach "casual" fans. This year it set up an online discount service with Groupon to sell surplus tickets. It has also started to roll out ticketing kiosks at Wal-Mart stores. Collectively, the initiatives have sold a combined 1.5 million tickets through Sept. 30, Rapino said.

Live Nation shares rose 20 cents, or 2.1%, to $9.57 on Thursday.

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Photo: Roger Waters in concert this year during "The Wall" tour. Credit: Live Nation

Ticketmaster CEO to get 20% pay raise, $2 million sign-on bonus

Nathan Hubbard, the chief executive of Ticketmaster, has scored a 20% pay raise, along with a $2-million "retention bonus" for extending his contract with the company's Beverly Hills owner, Live Nation Entertainment Inc.

Starting Jan. 1, Hubbard, 36, will see his base salary go from $626,000 to $750,000 a year, Live Nation disclosed Friday in filings with the Securities and Exchange Commission. In addition, Hubbard's annual bonus will go up from $637,900 in 2010 to as much as $937,500.

Live Nation also sweetened the contract by agreeing to give Hubbard up to 200,000 shares in the company, which would be doled out over the next three years. Those Live Nation shares would be worth more than $1.8 million at Friday's closing price of $9.09.

In return, the young executive agreed to stay at Ticketmaster until the end of 2015.

Hubbard caught some heat earlier this year, along with other top Live Nation executives, when the company disclosed that his total compensation was worth $5.7 million for 2010, a year when Live Nation posted a loss of $228.4 million on $5 billion in revenue.

The company is angling for better results this year by being more conservative with ticket prices and concert touring schedules. In the quarter ended June 30, Live Nation reversed its losses with a $13.3-million profit.

But the results of the summer concert season, which make up the bulk of Live Nation's business, have yet to be reported. 

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Photo: Ticketmaster CEO Nathan Hubbard. Credit: Rick Diamond / Getty Images

House of Blues goes back to its roots

Legend has it that beneath every House of Blues stage is a metal box filled with Mississippi River Delta mud. The idea is to convey the spirit of the deep South to every musician playing on the stages above.

In similar vein, the entire franchise is reaching back to its roots in an effort to revive the buzz and cachet it enjoyed following its 1992 launch. Partly inspired by "The Blues Brothers" movie and John Lee Hooker's album, "House of the Blues," the first House of Blues clubs were modern-day juke joints with a reputation for having top-notch players.

"People didn't see them as bars with music," said Gary Bongiovanni, editor of Pollstar, a publication that tracks the live entertainment business. "They saw them as clubs where you could see serious music and have some food on the side."

After its purchase in 2006 by Live Nation Entertainment, the franchise drifted on autopilot. Then in December, Live Nation tapped the former chairman of Universal Studios' theme-park business, Ron Bension, to liven up the clubs.

Starting this month, Bension is rolling out a new menu, designed by Food Network celebrity chef Aaron Sanchez, and pumping more events through the 13-chain clubs to keep the crowds, and the beer, flowing.

Will his plan work?

It's still early, but the effort is being helped by a healthier concert business thus far. Attendance is up 10% compared with last year, and Bension is expecting 5 million people will come to the company's 13 House of Blues and 23 other theaters and night clubs by year's end.

"It's definitely turning out to be a better year," Bongiovanni said.

-- Alex Pham

Twitter/ @AlexPham

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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
Twitter/ @AlexPham

Photo: Bono of the rock group U2 performs at a July concert in Montreal promoted by Live Nation. Credit: Paul Chiasson / Associated Press

Live Nation-backed group declares war on StubHub, ticket resellers

The battle of the band tickets is officially on.

Backed by Live Nation Entertainment and Ticketmaster, a group of concert promoters and artist managers on Monday declared war on ticket resellers such as those on StubHub, Razorgator and others. The newly formed group, dubbed Fans First Coalition, lashed out at "scalpers" and others who buy tickets in bulk and then resell them.

"It erodes the heart of our business," said Randy Levy, an independent concert promoter and president of Rose Presents in Minneapolis. Levy said if a fan has to pay markedly above a ticket's face value to attend a concert, they will have less money to spend on other live shows.

The solution: "paperless tickets" that are largely non-transferable. That means only the original buyer can claim the ticket on the day of the event, cutting out scalpers. Sounds reasonable, right?

Wrong, says another group, called the Fan Freedom Project, backed by the National Consumers League and founded earlier this year by Jon Potter, former director of the Digital Media Assn.

Potter argues that the real agenda for promoters who back paperless tickets is to prevent consumers from selling or giving away tickets they have purchased.

"I would say that what they're doing is very anti-fan," Potter said. "Consumers should have the right to determine what they can do with a ticket once they've purchased it. That means being able to sell it at both higher or lower than face value."

The controversy over paperless tickets is not new. Miley Cyrus and Bruce Springsteen both experimented with paperless ticketing back in 2009 for their concert tours.

But with powerful forces amassing on both sides, each professing allegiance to the consumer, the issue is poised to get hotter, particularly as states such as New York this year banned the issuance of paperless tickets that are not transferable and Massachusetts lawmakers consider a bill that would preserve a ticket resale market.

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Photo credit: Paul Sakuma / Associated Press