Live Nation Entertainment is one of the biggest producers of live entertainment in the concert and event promotion industry. Since the merger of Live Nation and Ticketmaster Entertainment, Live Nation Entertainment has produced and coordinated thousands of concerts and events all over the United States as well as internationally. Live Nation currently holds over 160 venues across North America, South America, and Europe.
The company’s chief executive officer, Michael Rapino, is attempting to adapt Live Nation to be a perfect meeting place for artists and fans. However it does not stop there, Rapino wanted much more than live music, he wanted the actual artists themselves. He started signing artists to record deals in 2008 that included Madonna, Jay-Z, and Shakira.
Live Nation is divided into five segments: concerts (concert promotion and venue operations), sponsorship, ticketing, e-commerce and Artist Nation (artist management). In this report I will address the current state of the brand, recent investments for the future, and challenges that currently face Live Nation. I will conclude by adding solutions to improve the company and the brand.
Live Nation: Leading Force in Concert Industry
The Live Nation brand connects people from all over the globe to their favorite artists at a convenient location. This has not been more prominent in this industry until today.
Hard Times for the Industry
The concert and event promotion industry relies heavily on real household disposable income. This can vary due to interest rates, wages, taxes, and employment growth. Therefore, the better the economy is the more real household disposable income, and the greater the demand for concerts and events. In 2009 and 2010, Live Nation struggled to sell tickets due to the harsh economic downturn as revenue dropped in 2009 (refer to chart below). Experts said the cause of this slump was due to the high average ticket price for high-level artists such as the Jonas Brothers. A decrease in attendance for stadium and arena shows dropped 6.9% in the United States and 9.4% internationally in 2010. Net revenue per attendee also dropped from $17.96 in 2009 to $17.57 in 2010 (Amari, 2013). This was not just for Live Nation either, the whole industry felt the effects of this economic recession, as displayed in the line graph.
Revenue Sources Other Than Ticket Sales
Industries that base most of their profit on sales, such as concert promotions, find it difficult to gain revenue other than ticket sales. It comes from multiple sources if you want to be successful. In this industry, about half of the operating income is generated from ticket sales. Since Live Nation owns and operates their own venues, they can charge events that are not their own as venue rental. Another big source of revenue for Live Nation is advertising and sponsorship (Amari, 2013). Many big name companies such as Rockstar, iHome, and Jägermeister were all sponsors for the Identity Festival traveling tour the past two summers. Other sources of income for Live Nation include: •
Food, Drink, and Merchandise
Grants and Donations
No Lack In Competition
Live Nation Entertainment is the worlds leading producer and promoter of live music today. Out of the market share, Live Nation accounts for about 16.8%. It is quite hard to believe that the leading company in an industry only makes up 16.8% of it as a whole, displayed by this graphic. But when there are over 50,000 companies in an industry, it is easy to see why one powerhouse company has such little percentage share. There are so many small promotion companies that solely work on local talent and get them shows in the area. There is no way one company could ever control a market that big, it is virtually impossible to promote for every artist in the world. As Radia Amari summarizes in an IBIS World Industry Report, “The number of nonemployer promoters and very...
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