Rapino Speaks At Goldman Sachs Conference

Michael Rapino spoke at length at the Goldman Sachs Communacopia Conference on a variety of topics including Live Nation’s plans for international expansion, opportunities for growth in hospitality-oriented areas, and the development of Ticketmaster’s Verified Fan and Presence.

– Michael Rapino

The Live Nation CEO was interviewed by Goldman Sachs’ Drew Borst and the discussion immediately started with the recent boom for the live-entertainment industry and the untapped opportunities that lie in countries outside of the reach of previous “gatekeepers” like recording companies and retailers. 

“For 30 or 40 years, the artists couldn’t tour in South America, they couldn’t tour in Eastern Europe, they couldn’t tour in Asia. Why? Because the gatekeepers weren’t there,” Rapino said. “It was Germany, U.K., North America.”

He went on to estimate that Live Nation might have 30 percent of the global market share of the live music industry, despite dominance in North America, and that a lot of LN’s attention will be devoted to promoting and selling tickets to more international shows in new markets.

Projecting that the international growth would continue to be “mostly organic,” he cited a stat that LN had added 30 million customers in five years, and that adding more shows internationally doesn’t mean he can’t get more fans in the door in the markets where the company is strong.

Rapino went on to explain how streaming has effectively capped how much artists can make directly from music sales but has provided a better way for artists to develop a strong relationship with fans, which is most effectively monetized through the live experience.

“I would just tell you that this was a record year coming off a record year coming off a record year,” he told Borst. 

As the company attempts to add to its core competency of promoting shows by adding more opportunities for VIP spending and food and beverage options in amphitheatres and festivals, “We think we can grow that 10 percent a year. We’re going to add $2 per head on an ongoing basis. We can again have another good five, six years of growing that business, which gets us still below the best stadium in the world or the best concert or sport event in the world, but that’s okay because I didn’t spend $1 billion for the stadium.”

Rapino addressed how Ticketmaster has been primarily oriented toward servicing sports events and that Verified Fan represented a shift toward “a better suite of services for the artists.” He spoke on Verified Fan and the internal “artist master” team that consults with artists about proper pricing to not leave money in the secondary market, as well as Ticketmaster Presence and the transition away from bar-code ticketing.

When asked about Amazon, Rapino said “We’ve talked to Amazon and if they want to help us sell some incremental tickets on a Wednesday, just like a Groupon or other API partners we have, then great. … But I think content’s going to have control and going to be able to dictate the terms [it] wants to operate on in the future and look for partners that deliver its prime data and customer strategy.”

He wrapped up by talking about the value of data, especially in TM’s work with sports teams and took questions from the audience, one of which was about Presence’s ability to improve in-venue experiences.

“We have not done a great job in the music business at all treating our fans well or engaging them. We’ve got them in the door, we gave them a warm beer and a cold pretzel and said, ‘Enjoy, there’s the show and sit down,’ right? 

“If you just sit here and say, ‘How are you going to grow Live Nation? You have 80 million fans and you’re under-servicing them with a generally overall crappy product?’ Well, every year, if we add a $1 or $2 of value to them because there’s a huge audience there, we think we can grow our business just on that strategy alone and a great rate ongoing. [There is] huge opportunity in [the] music business to become a hospitality company.”