by Howie Cockrill
The advent of digital media as a content format and of the internet as a distribution platform can now be squarely seen with the 20-20 hindsight of perspective as having been the end of one era and the beginning of another in the entertainment industry.
Those ripples that began in the 1990s have grown over nearly two decades to become tidal waves of change crashing into the vessels, small and large alike, of anyone trying to make a living or trying to get noticed in this business.
Will all the vessels stay afloat? Will rising tides truly float all boats?
As with any turbulent period, those who adapt to and anticipate change are the survivors. And those who predict wisely and invest heavily will be primed to reap the biggest gains.
This is what we are seeing now in the music industry.
Everyone, from independent artists to major entertainment corporations, are sticking their fingers in the air, judging the wind and positioning their sails in an effort to climb up and over the crashing waves.
This can be seen especially in the flurry of media rights deals that has overtaken several aspects of the industry, from top-dollar talent to record labels to publishers to technology companies to concert promoters and so on.
In most articles on MELON, we focus on the specifics of individual deals or on macro trends in the entertainment and technology industries - to try to see the forest for the trees (or the fleet for the vessels).
Enter - "Spotlight:"
In this new series of articles - we aim to focus on particular companies or artists and how they have adapted to, anticipated and even capitalized on the winds of fortune in a sea of change.
In short - "Spotlight:" tries to see the trees for the forest, the individual vessels for the fleet.
SPOTLIGHT: LIVE NATION
On December 21, 2005, Clear Channel Communications spun-off one of its more profitable divisions, Clear Channel Entertainment (“CCE”).
CCE was renamed Live Nation, and in its short independent existence - it has established itself as the largest live event impresario in the world.
From the beginning, though, Live Nation cultivated an array of ancillary revenue streams from the revenue river of live events.
The seeds it planted just two years ago have grown today into a thriving business on many fronts, including a music search engine, an expanded roster of affiliated venues (including Dubai), an interactive calendar for those venues to directly submit their events, and artist 360 deals.
In 2009 the company plans to start handling its own ticketing for its events through a partnership with CTS Eventim.
And at the same time it expands its music entertainment infrastructure, it is also trimming down its involvement with theater events.
Live Nation’s intense growth seems to be showing mostly positive financial results.
In 2007, although its 4th quarter revenue was down 4.3% from the same quarter in 2006 (attributed by Live Nation to several major music tours in late 2006), the company reported $4.2 billion in annual revenue – up a whopping 12.8% from 2006.
$67.7 million of this was from Live Nation’s North American Amphitheaters, a 49% increase in profits from 2006.
What specifically has Live Nation done to get where it is today?
It doesn’t hurt that Live Nation inherited a wealth of resources from Clear Channel, including a world wide network of subsidiaries and an enormous venue roster.
Nevertheless, a quick look at the company’s press releases to date reveals an aggressive yet methodical approach that combines:
- Maintaining a focus on its core business (live events),
- Identifying all potential revenue streams from that core business, and
- Bringing on top leadership (often from acquired companies) to pinpoint targeted growth opportunities in partnerships and acquisitions.
Check back for Par 2 of this article, in which I will introduce some of Live Nation's top executives and explore some of the company's key deals in its core and ancillary business areas.