A TechCrunch article: So, Recode reported today that Twitter was tinkering around with the idea of expanding its 140 character limit to a number a bit higher….10,000 characters. But what,...
Courtesy of Variety:
Live entertainment’s continued surge as the powerhouse driving music-industry economics is underscored by one remarkable fact: Analysts expect the revenue generated in 2016 by category leader Live Nation — pegged to hit $8.5 billion — to exceed the combined revenue generated by the top two record companies, Universal and Sony, during the same period.
While there’s a glimmer of hope at labels, which have recently seen their declining fortunes rebound due to increased streaming revenue, most artists simply aren’t feeling it yet. And they
“It used to be that you toured to help sell the record,” says Ray Waddell, senior VP of media and conferences at Oak View Group, a live-business consultancy and development company founded by veteran music manager Irving Azoff and Tim Leiweke, the former chief of events giant AEG, a major Live Nation competitor. “Now the record helps support the tour.”
How has this come to be? In the case of Live Nation, it’s the result of systematic growth over a decade that has seen the Beverly Hills-based company establish a presence in more than 40 countries via acquisitions or partnerships. Live Nation is everywhere, or getting there. In the past year alone, it bought or landed deals for the Governors Ball and BottleRock Napa Valley music fests in the U.S., the Sweden Rock Festival, Lollapalooza Paris, Big Concerts in South Africa, and Secret Sounds in Australia. Via a joint venture, it created Elan Live Nation, which includes a management agreement for two arenas in Doha, Qatar.
Executives at Live Nation call their concert business the “flywheel” that helps drive their ticketing (via Ticketmaster), advertising, and on-site businesses — and promotes further growth via satisfied artists and consumers who will, ideally, return.
“It’s something the company became focused on 10 years ago,” says Live Nation COO Joe Berchtold. “We built the flywheel. If you look back 10 years, we were a fraction of what we are today. And last year we did 26,000 shows for 70 million fans. We grew it to a scale larger than the NFL, NBA, or NHL. We didn’t get distracted. We have a lot of things on our ‘don’t do’ list that we don’t drift into, to focus on these — the flywheel and its components — and building each of them.”
Further feeding live music’s growth is the increasingly global nature of the music business. Social platforms like Facebook and Instagram and distribution platforms like Spotify have greatly fanned the flames, says Berchtold.
“Now the artist connects with those fans truly on a global basis simultaneously. So when I was a kid, and the Clash came out, you heard about the Clash in London, New York, L.A., but it might be two years before it got to Oklahoma City, right? And it probably never went to Colombia. Well, when Beyoncé released “Lemonade,” the girl in Colombia was listening to that album the same minute as the girl in London or in L.A. And you have more followers outside of the U.S. for the major artists than you do in the U.S.”
Thus the strength of Live Nation and AEG Live, says Gary Bongiovanni, president and editor-in-chief of the concert trade publication Pollstar. Their size and scale can satisfy artists, management, and fans worldwide.
“Twenty years ago there were lots of markets where [artists] wouldn’t go because they were worried about getting paid — and that even included places like Italy and Spain,” he says. “If you didn’t get paid in advance, you might not get all your money.
“In today’s world, because you’ve got these giant companies that are doing global tours, artists don’t have any reluctance to go play Paraguay or a lot of obscure markets you don’t normally think about. South America has exploded as a concert market — and a large part of that is because now it’s either a Live Nation or AEG company that’s doing it, or they’re partnering with someone who’s local on the ground that knows what they’re doing. The number of global markets has greatly expanded.”
Helping boost business Stateside is the growth of festivals, which had been European mainstays for years and are now fully embraced by American audiences as well. “Really, with Coachella, Bonnaroo, and then Lollapalooza as a standalone event, and those major destination festivals, many more have popped up,” notes Waddell. “But it’s across all genres, and it hasn’t come at the expense of the other summer businesses, like amphitheaters. It’s really, really healthy, very robust, and it’s continuing to grow.”
He cites the success of Desert Trip, last year’s AEG/Goldenvoice-produced classic rock fest in the California desert featuring Bob Dylan, Paul McCartney, the Rolling Stones, and other ’60s icons. “They found a way to bring the boomers into the festival business, who hadn’t really embraced it at the level of the millennials, who really are driving this festival thing. It’s a really exciting time.”
Indeed, the impact of millennials on live music is not insignificant; they are the demographic that prefers spending disposable income on “experiences” rather than “things.” That notion of selling various levels of concert experience — sitting on the grass, say, as opposed to sitting in an air-conditioned VIP tent sipping Champagne — is yet another means for a Live Nation or AEG Live to boost revenue via multiple ticket prices.
Whether this level of success will be sustainable over the next decade is no small question, as the clock ticks on the types of classic rockers who have long appealed to baby boomers.
“Paul McCartney doesn’t need a new record to go out and sell tickets,” says Bongiovanni. “U2 doesn’t have a new record out, but they’re selling tickets like crazy. The acts that have been around awhile are still valid — but as age and death take their toll, the market’s going to slowly shift.”
How it will shift is a core concern to the live-music business. For Brooke Kain, chief digital officer of AEG Live, the key is in focusing on the digital consumer: offering a seamless, personalized experience from inception to execution, “from marketing the actual show to ticket-selling to even the in-venue experience.”
Kain thinks there will be a full consumer shift to mobile and bots. “Where I’d envision it going is that a consumer would barely even have to open their app or even open their phone,” she says. “They use their phone to purchase things, the ticket’s there, it’s scanned, we know who you are, we receive beacon data, and we can offer you a personalized [food and beverage] experience based on the fact that you just walked in the venue. That kind of seamless, transparent transaction I think is somewhere we could be moving.”
At Live Nation, as the flywheel ideally continues its lucrative spin, the company will again face the challenge of staying innovative, Berchtold says, making sure its many festivals and shows deliver the right experience to fans, and “continually reminding ourselves that we are 26,000 individual shows every year; we are 80 individual shows every day.”
Yet he adds: “We’re not a big, mass, widget-making business that operates at scale and just punches things out. We are every one of those 3,000 artists that we work with, one at a time.”