by Howie Cockrill
Part 3 brings Live Nation's plans for ancillary revenue streams into focus by giving an overview of several deals Live Nation has cut in the past few years.
I also take a look at Live Nation's vision for 2008.
In addition to shoring up its live event business through deals with venues, artists and labels - Live Nation has been working since its inception to expand into areas that "spoke" off its core business "hub," all with an eye toward fattening its bottom line.
It has done this primarily through strategic partnerships and acquisitions, often with a technology/online bent.
Early in January, 2006 (just days after it was spun off from CCE), Live Nation and EMI took the first industry steps toward taking a long-term view of artist development and entered into what is now commonly referred to as a 360 Deal with the band Korn.
The then-unconventional deal allowed EMI and Live Nation to share in the profits from a wide-array of revenue streams, including the band’s recording, publishing, touring, merchandising, and sponsorship.
This concept of full-service artist deals would eventually bloom in 2007 into an entire division of Live Nation (“Live Nation Artists”) specifically designed for identifying opportunities for 360 deals with artists.
In February, 2006, Live Nation partnered with Nokia to offer “ticketrush.co.uk,” a website where music fans can create a profile, have artist tour information sent to their cell phones via SMS and purchase event tickets over their phones.
This partnership extended to a North American roll out of TicketRush in May of 2007.
Three months later, the company began an initiative to “wire” 120 of its venues in the US, Canada and Europe for high-quality digital recording by the end of 2006.
This single act of creating wired venues allowed Live Nation to repurpose live shows for television, mobile phones, terrestrial and satellite radio and the internet.
Live Nation also brought merchandising in-house with its acquisition of “authentic lifestyle merchandise” company TRUNK LTD, which had exclusive licenses with major acts like AC/DC, Aerosmith, The Beatles, Blondie, Jimi Hendrix, Pink Floyd, The Grateful Dead, The Doors, The Rolling Stones and David Bowie.
This acquisition would allow Live Nation to capitalize on TRUNK’s already significant market share in retail outlets, as well as creating a new market for limited edition products available only on an artist’s tour.
Recently and to further capitalize on its 360 Deals, Live Nation Artists purchased Signatures Network, one of the largest artist merchandising companies, with exclusive licensing agreements with 150 of the world’s biggest entertainers.
Another significant deal was Live Nation’s purchase of Musictoday, a company specializing in connecting artists with fans via internet fan clubs, artist e-commerce (including music downloads), and “secondary market” (ie VIP and fan club) ticketing.
Musictoday has since begun offering an application for Facebook, allowing members of the social networking site to sell artist merchandise directly from their Facebook pages.
Early in 2007, Live Nation partnered with a leading music social network, Last.fm, to provide the company with up-to-date concert information.
The company continued to strengthen its LiveNation.com infrastructure in 2007 by creating the functionality for fans to buy premium seating and VIP parking passes directly from the website.
Additionally, the company announced “Live Nation TV,” a destination on the LiveNation.com site giving fans access to live performance clips and artist interviews.
Expanding from the direct services offered on LiveNation.com, Live Nation also moved into software with imbeddable widgets.
One widget can be posted by fans directly to their own websites and social networking pages, allowing visitors to search for live concerts and buy tickets directly from the widget on the site.
The other widget can be placed in IE, Firefox and customized Google search pages, allowing fans to search for tours and events more easily.
Late in 2007, Live Nation began offering interactive 3D seat maps for the majority of its North American venues, allowing ticket purchasers the ability to get a virtual view of the stage from their seats prior to purchasing.
Another significant deal in late 2007 was Live Nation’s “Amphitheatre Concert Pack.”
In an agreement with Costco (with its 263 US locations), these gift cards sell for $40 and entitle the purchaser to 2 general admission tickets to any Live Nation Amphitheatre concerts in 2008.
2008 is shaping up to be another ground-breaking year for Live Nation.
Since the new year, it has created a “My Live Nation” destination on its LiveNation.com site, allowing users to set up profiles, use a search platform that specifically tailors artist recommendations and determine how the user receives concert information over various media.
It has also entered into an exclusive partnership with Citi Bank, giving credit card holders from that bank the ability to earn rewards by attending Live Nation events.
VISION FOR 2008
In its Financial Press Release from February of this year, Live Nation's CEO Michael Rapino waxed on the company's accomplishments in 2007 and looked ahead to 2008.
For Live Nation, 2007 was about global consolidation, streamlining its core business and beginning a move toward new revenue streams before, during and after the live event.
According to Rapino, 2008 will likely be more of the same - with a specific focus on:
- gearing up to handle its own ticketing in 2009 and
- signing additional artists to 360 Deals
LIve Nation earned its place as the first "Spotlight:" article for one primary reason:
It is uniquely positioned amongst entertainment companies to do very well in the new digital market.
The price of recorded music is being driven lower and lower, due in part to the democratization of digital copying and distribution. In this environment, money will be made in goods and services that are not easily copied or distributed.
So - what is un-copyable?
Kevin Kelly, in his article "Better Than Free," does a great job of discussing "generative" (un-copyable) attributes and how they add value online.
One example of a generative value-add is "experience."
Live Nation's core business - the live event experience - is certainly incapable of being replicated (at least until the advent of the holo-deck), unlike digital recorded music.
Not only that, but Live Nation is pushing to expand its service beyond the actual live event - and also have these new services be "generative."
It is exactly this one-two punch that makes Live Nation a force to be reckoned with, both now and for the foreseeable future.