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The day the music biz changed: Parsing the Live Nation / Ticketmaster press release [UPDATE]

February 10, 2009 |  1:24 pm

Tm_livenation It's almost done. As first reported last week by the Wall Street Journal, a plan to merge industry giants Ticketmaster and Live Nation was announced this morning. And if it goes through, don't expect the music business to ever be the same again.

Billboard's Ray Waddell sums up the size of this new corporate powerhouse: "The merger would create the most powerful and influential entity the music business has ever known. As manager, ticketer, venue operator, merchandiser and more, this giant would tap into revenues, if not outright control them, from virtually every source in the chain: live performance, merchandising, ticketing, content, sponsorships, licensing and digital."

Antitrust issues certainly loom. In this Times story by Dawn C. Chmielewski, one source is quoted as estimating that "the combined company would control ticketing rights for 80% of the concert halls, amphitheaters, sports arenas and other venues where live events are staged."

What's more, with Ticketmaster's recent alignment with management firm Front Line Entertainment, the new company would have direct access to a number of major acts that would be filling the venues it owns, including the Eagles, Christina Aguilera and Miley Cyrus, among others.

Live Nation has already positioned itself as sort of an one-stop shop, with advances into merchandise and digital downloads, giving the new Live Nation Entertainment a hand in virtually every aspect of the music business. The past week has seen a lot of speculation as to how this may or may not affect the consumer (Pop & Hiss has chimed in here), and this morning's press release offers some hints.

Here's a look at what Live Nation Entertainment says, and what it may mean for the consumer:

The press release:
Improve Access and Transparency: By uniting an artist, promoter and ticketing company under a combined banner, the new entity will be positioned to address the challenges of serving fans better at the point of the initial ticket sale with more options and better access.

What this probably means:
We can charge you more, and give the best seats to those who buy VIP packages that include meet-and-greets with the band or autograph opportunities. And if you don't spring for the VIP package, enjoy the view from the back of the concert hall.

The key here is the last part of the sentence: "address the challenges of serving fans better at the point of the initial ticket sale with more options and better access." Expect a ramping-up of what's been a distressing trend in the music biz. Interested in seeing Fall Out Boy? Great -- perhaps you might want to spend more for one of two VIP packages available (more options!), which promise early entry and access to the band, including an autographed lithograph. The full VIP package goes for $150. The early entry VIP goes for $125.

The latter doesn't include a punk rockin' meet and greet, but you're in the venue and in position before the pesky rock 'n' roll riff-raff with their $40 general admission tickets. And Fall Out Boy is on the low end of the spectrum; these VIP packages are pushing $500 for Britney Spears' Staples Center date.

The press release:
Improve Ticket Pricing Options: The merger will enable more innovative and dynamic promotion arrangements that create more choice and a more fan-friendly purchasing experience. As an example, the Eagles’ recent all-inclusive pricing initiative was favorably received by the public as well as the broader industry.

What this probably means:

We will charge you more, by making you think you're paying less!

UPDATE: Let's first address this: "The Eagles' recent all-inclusive pricing initiative was favorably received by the public as well as the broader industry." This was one of the biggest non-stories of 2008.

Essentially, this is what happened: The Ticketmaster surcharges, which are added into the cost of a ticket at the final point of purchase, were forgone for a select number of dates. As an example: The cost of a $95 Bruce Springsteen ticket for the Los Angeles Sports Arena jumps to $114 after various fees are added in. Long-term, it remains to be seen if all-inclusive pricing will just wrap the extra fees into the initial price of the ticket -- ultimately resulting in a higher ticket cost -- or if it will actually do away with all surchages. If the former, whoop-dee-do.

As for dynamic pricing: This means the cost of in-demand shows can skyrocket to the highest bidder, and poor-selling shows can suddenly drop as demand decreases. In the latter case, last-minute shoppers may get a bargain, but it's also unfair to the fans who bought the tickets at a higher price the day they went on sale. Ticketmaster discussed dynamic pricing at last year's SXSW Music Conference.

The press release:
Invest in Better Ticketing Technology: The combination will enable increased R&D investment and the sort of technology advances that improve the ticketing experience for consumers and deliver best-in-class solutions to artists, other content owners and venues. Live Nation Entertainment will be better positioned to deliver technological advances such as paperless ticketing as well as interactive seat access and mobile delivery.

What this probably means:
This sounds innocent enough, and mobile delivery would cut down on scalping. But will these added features be paid for by the consumer? Ticketmaster, after all, charges fans $2.50 for the privilege of printing a PDF ticket on their home computers.

The press release:
Increase Event Attendance: A very substantial portion of the tickets put on sale to the public for live events goes unsold. The new company will be positioned to take full advantage of its combined online resources, databases and promotional operations to strengthen and enhance the direct connection between artists and fans. This will create opportunities to improve attendance at events, benefiting venues and supporting a healthier live entertainment industry.

What this probably means:
Artists and labels: Get on board. With wide-reaching control of ticketing and venues across the United States, as well as merch and fan club tie-ins via Live Nation's relationship with Music Today, the company has the resources, strength and ability to create innovative ticketing/merch packages, which would would certainly create new avenues to get tickets into the hands of fans -- as well as the power to completely shut out those acts who don't sign-on. After all, you're free to go elsewhere, but good luck booking a 40-venue tour across the country (see Jim DeRogatis' blog for a detailed reminder of the Pearl Jam case, as well as as other insightful thoughts on the merger).

-- Todd Martens

Related: Ticketmaster, Live Nation announce merger plan

Related: Ticketmaster & Live Nation: The Boss is skeptical. Should you be?

UPDATE: An earlier version of this blog post mis-identified the all-inclusive pricing initiative for the Eagles. The surchages were not added into the cost of the ticket, as was written, and were instead forgone.