LOS ANGELES (CelebrityAccess MediaWire) — In a conference call on Friday, CEO Michael Rapino outlined the details of Live Nation's plans to bring ticketing operations in-house.
Live Nation has been making moves to bring as many aspects of the live touring business under their control as possible, thus capitalizing on as many potential revenue streams generated by a live performance event as possible. The most recent development on this front has been the announcement of a deal with CTS Eventim to license their ticketing software to be integrated into Live Nation's already-strong web platform.
"For the first time ever Live Nation will control our most important asset, the concert ticket," says Michael Rapino. "Through Livenation.com we expect to sell more than 20 million tickets annually directly to music fans throughout the world."
Part of their plan is to capture as much of the secondary ticket market as possible. Two strategies that the promoter outlined in this vein, include fees collected from secondary ticket sales but also what Live Nation calls dynamic ticket pricing in which primary market event tickets will be priced at "market value," ostensibly reflecting trends in the secondary ticket market, a fact that bodes ill for the less well-heeled music fans.
Furthermore, Live Nation's previous claims that the end of their deal with Ticketmaster would help them to lower the prices of event tickets seems to have fallen by the wayside and they are now projecting that various service fees may hit as much as 25% of the face value of a ticket.
Of course, none of this will take place until the end of 2008, when the LN/Ticketmaster pact expires, but when it does, Live Nation is betting on a big windfall.
This process won't be cheap for Live Nation and they cited costs of $20 million on hardware, including servers, printers for box offices and other infrastructure upgrades. But at least, according to Live Nation, well worth the trouble with their in-house estimates of revenue potential in the neighborhood of $75-120 million annually.
Wall Street appears to be somewhat less sanguine than LN execs were during the press briefing and at press time, Live Nation's stock is off by approximately 17% from its high on Friday. – CelebrityAccess Staff Writers