Live Nation Takes On Tickets

Live Nation recently announced the next logical step to its 10-year licensing deal with Germany’s CTS Eventim: a global ticketing system that will start taking the place of Ticketmaster at the end of the year.

LN’s decision to integrate ticketing is considered by the company to be the last link in the chain, giving the company a completely vertical business model. Likewise, it puts the company on a more equal footing with Ticketmaster, making it a competitor not only in the primary market but, it hopes, in the increasingly profitable secondary market.

CEO Michael Rapino said that by controlling its customer data, tickets and service fees, LN could bring in an additional $25 million per year, while service fees from secondary market ticketing could bring an additional $75 million to $125 million annually. The company expects to spend about $20 million to prepare for the launch.

"We will have a fully operational new ticketing company," Rapino said in an earnings call January 11th. "Through livenation.com we expect to sell more than 20 million tickets annually directly to music fans throughout the world … to strengthen the relationship we have with our customers, develop brand new revenue streams, maximize attendance at our events and build new alliances with corporate partners that have never before been possible."

With its existing artist and venue connections, Live Nation may look to pursue more dynamic pricing structures, in the vein of the variable pricing models of the airline and hotel industries. Two days before the conference call, IAC/InterActiveCorp chief Barry Diller said something similar – that the Internet is spurring dynamic ticket pricing. Diller also said he will be overseeing Ticketmaster when it is spun off from IAC.

As LN ramps up its ticketing service, the company could seek to take the platform into the arena of sporting event ticketing, officials said, as well as secure new third party venue contracts.

CTS Eventim CEO Klaus-Peter Schulenburg said the system’s sophistication will allow for last-minute ticket purchases that can be sent to a buyer’s cell phone and scanned at the door, interactive seating maps and an integrated secondary market option, making the platform a strong competitor in the world of ticketing.

Rapino agreed.

"Our goal is to allow for better connections between artists and their fans, create a one-stop shop for those fans to take care of all their ticketing needs, and offer sponsors an end-to-end solution for marketing to those fans," he said.