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U.S. revenue for the second quarter fell 5 percent due to fewer larger concerts - as well as higher administrative and technology costs on its Web site (kind of a mushy excuse, no?). Operating income fell 24 percent from a year earlier. Barry Diller, CEO of IAC/Interactive Corp., the crazy-quilt retail/media company that owns Ticketmaster, said he expected the quarter would be tough. But not this tough. "We are not satisfied with these results - whether driven by market conditions or our own hand," he told analysts this morning. (FT)
Thing is, West Hollywood-based Ticketmaster has a bigger problem: the prospect of losing its contract with Bev Hills-based Live Nation, the nation's largest concert company. Between 15 and 20 per cent of all Ticketmaster business involves Live Nation concerts, so we're talking about some serious change. The squabble is over escalating ticket prices, fueled in part by all those Ticketmaster service fees. LN CEO Michael Rapino believes the numbers have gotten out of hand - as has Ticketmaster's near-monopoly. And the migration of ticket purchasing to the Internet has created more options than Ticketmaster. (Of course, let's not forget Live Nation's share of Ticketmaster fees.) Here's more from an LAT piece last year:
In addition to having more input on prices, Rapino wants greater control over the wealth of information Ticketmaster collects about fans' likes and dislikes. He envisions expanding innovative marketing programs that, for example, identify who might fork over $100 for a vintage T-shirt. Live Nation is already starting to mine its own database to create targeted ads for upcoming concerts, and potentially to sell products such as cellphone ring tones and DVDs. Ticketmaster shares the data it collects on Live Nation's customers with the company, but also uses that data to advertise shows sponsored by other promoters. Some Live Nation insiders hope that keeping the company's data secret will permit better marketing.
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Ticketmaster built an empire giving venues and promoters — including Live Nation — a cut of its fees and establishing a powerful network of retail stores and phone banks that were too expensive for any one promoter to replicate. Last year, Ticketmaster sold tickets worth about $6 billion through the company's Internet sites, 3,500 retail outlets and 19 international call centers. Fans for years have complained about Ticketmaster's fees. Now, the migration of ticket purchasing to the Internet has created more options.
Mark Lacter created the LA Biz Observed blog in 2006. He posted
until the day before his death on Nov. 13, 2013.