Entertainment Industry

Category: Ticketmaster

Live Nation: Strong ticket sales boost first-quarter revenue

Creamfields Live Nation

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.

Fred Rosen said to have stepped down as CEO of Outbox

Fred-rosen

Fred Rosen, the 68-year-old erstwhile head of Ticketmaster, has relinquished his day-to-day duties as co-chief executive of Outbox Enterprises just one year after launching the Los Angeles ticketing firm, said a company executive who worked with Rosen but was not authorized to speak publicly.

The company executive said Rosen stepped down last month because he wanted to work less. He retains an undisclosed equity ownership in Outbox, along with his partners Anschutz Entertainment Group, Cirque du Soleil and Jean-Francoys Brousseau.

Rosen also remains Outbox's vice chairman, according to the executive. Brousseau, who shared the CEO title with Rosen, now runs Outbox solo. 

The news was first reported in The Wrap, which suggested Rosen's resignation was a "sign of trouble" at Outbox but did not cite specific problems. 

Rosen created Outbox to compete with Ticketmaster, the company he spent much of his career building into an industry powerhouse. 

AEG is both a joint owner and a major client of Outbox, using the company's technology to power its AXS ticketing service, which is being rolled out gradually to all of AEG's venues. Prior to switching over to AXS, AEG concerts and sporting events accounted for 15% to 20% of Ticketmaster's business. 

AEG spokesman Michael Roth declined to comment.

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Photo: Fred Rosen. Credit: Ken Hively / Los Angeles Times 

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
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

Roger Waters The Wall

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

Ticketmaster Facebook

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

Nathan HubbardNathan 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

AEG to start rolling out Axs ticketing service

Ticketmaster 
Making good on a promise to compete with Ticketmaster, AEG said it will begin rolling out its Axs ticketing service Saturday, beginning with two venues in Denver.

AEG, which owns or operates more than 130 venues worldwide, said it has a two-year plan to  convert all of its facilities to the service. Until now, AEG primarily has used Ticketmaster.

In order to obtain federal antitrust approval for its 2010 merger with Live Nation Entertainment Inc., Ticketmaster promised to license its ticketing service to AEG.

But instead of using Ticketmaster's software, AEG decided to partner with Cirque du Soleil and former Ticketmaster Chief Executive Fred Rosen to create a rival system called Outbox. Technically, AEG is both a joint owner of Outbox and its largest client.

AEG is currently Ticketmaster's largest third-party client, generating thousands of events and millions of tickets a year. Within two years, however, all of those tickets will be serviced by AEG's ticketing service, dubbed Axs and pronounced "access."

The transition will be gradual, said Tim Leiweke, president of AEG, which is based in Los Angeles.

"It’s going to take us a couple of years," Leiweke said. AEG expects to roll out the service to Staples Center by mid-2012, he said.

Beginning with the Bluebird Theater and the Ogden Theatre in Denver, AEG will test its new service, working out the kinks before it adds more venues, said Bryan Perez, the company's newly hired president of digital.

Among the differences customers will notice, Perez said, is the absence of fees for printing tickets at home. (Ticketmaster charges such fees.) Perhaps more important is something users won't see, namely prominent branding of the ticketing service. Instead, the venues will have top billing in the ticket purchase, Perez said.

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Photo: Associated Press

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

Ticketmaster 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

 

Judge nixes settlement in case against Ticketmaster fees, sets trial date

The trial must go on.

That was the word from a California Superior Court judge who rejected a settlement Ticketmaster had reached in December with plaintiffs of a class-action lawsuit claiming the Beverly Hills ticketing service misled consumers when it tacked on "delivery fees" ranging from $14.50 to $25 per transaction.

Judge Kenneth Freeman's June 3 decision, which only this week came to light, said the agreement "offered virtually no benefit to the class member."

Ticketmaster parent company Live Nation Entertainment, in disclosing the settlement in January, said it set aside $22.3 million to pay for legal fees and "cash payment and/or discounts off one or more future ticket purchases" to affected consumers, subject to limits that the company did not specify.

In addition, Live Nation agreed to "make certain changes to disclosures on its website."

The company also did not disclose how much it would refund consumers under the confidential settlement.  

Freeman apparently thought those amounts were insufficient, and ordered a trial date set for Oct. 5. The plaintiff's attorneys, Alvarado Smith in Santa Ana, declined to comment.

Live Nation, which merged with Ticketmaster in January 2010, declined to comment.

-- Alex Pham 

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Ticketmaster moving to flexible ticket pricing

Ticketmaster In the music business there is a old adage that says there is no such thing as a bad concert, just bad prices.

So it was with this in mind that Live Nation Entertainment Inc.'s Ticketmaster on Monday announced it would adjust ticket prices based on consumer demand. The world's largest purveyor of live event tickets said it has partnered with MarketShare to help price its shows.

Ticketmaster will begin rolling out the "dynamic pricing" sometime this year, initially for major sporting events and concerts, and for arts and theater at a later date.

That means a concert that's not selling well may get a price cut. If tickets start moving fast, the price could theoretically go back up. Scalpers often take advantage in situations when demand for tickets exceeds the supply, creating a surplus of buyers willing to pay more than face value. Discounters such as Goldstar work the opposite end, when there is a surplus of unsold tickets.

In many retail sectors, such flexible pricing techniques are common. Clothes, shoes, airline tickets and hotel rooms are among the many commodities that adjust prices according to market demand.

Concerts and many professional sports games, however, are rarely if ever discounted. That's because discounting can cast a pall over an event by creating the impression that the promoter is desperate.

Such concerns seem to be outweighed by the effect of last year's disastrous concert season, when promoters were left with too many unsold seats and faced large losses.

Live Nation Entertainment, the Beverly Hills parent of Ticketmaster, last year saw a 7.6% drop in the number of tickets it sold from the year before. Much of the decline came from theater and concert events. Ticket revenue fell 12.5% in 2010 to $1.04 billion, down from $1.19 billion in 2009.

"Efficient pricing is one of the most important and untapped opportunities," Ticketmaster Chief Executive Nathan Hubbard said in a statement. "By utilizing MarketShare and Ticketmaster’s technology, our clients will be able to retain economic value that is normally siphoned off by the secondary market, and to sell more of their tickets that go unsold today. Meanwhile, more fans will have more opportunities to enjoy live entertainment events because tickets will be more accessible and pricing options will broaden."

Ticketmaster is not the first company to explore dynamic ticket pricing. ScoreBig, a Hollywood startup founded by former sports and concert industry veterans, has been testing a proprietary ticketing system that automatically adjusts prices according to how fast they're selling or how well similar shows have fared, among a host of factors. The service, which has been available to a small, invite-only audience, is set to launch to the general public later this year.

"This year, you're going to see a lot more concerts priced correctly," said Jim Guerinot, manager of No Doubt, Nine Inch Nails and other major bands. Translation: expect lower prices this year.

-- Alex Pham

Photo Credit: Paul Sakuma / Associated Press.

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