Andy on the Road

7 January 2010

Lefsetz Letter on the Live Nation / Ticketmaster merger

Filed under: deepthoughts,music,soapbox — Andy @ 10:46 pm

I mentioned a few days ago that I’d be spending a good slice of this year analyzing the Live Nation / Ticketmaster proposed merger from as many angles as I could manage. (There’s an antitrust law casebook on my lap as I write this.) Anyone following along with me would probably like to know that this evening music industry expert Bob Lefsetz has posted on his very influential Lefsetz Letter his rundown on the merger.

Lefsetz approaches this from the perspective of the largest complaint we’ve heard on this merger: that this is going to impact ticket prices and make it more expensive to see shows. He attacks this in a rather sobering way, noting that not for years has Live Nation or Ticketmaster been about much other than the money. When Don Law and Robert Sillerman were making their bones buying out other promoters they were doing it for profit, and today the market (as much as there still is one) will keep the downward pressure on prices until we find equilibrium. It’s the market that dictates this merger, and the bottom line which is leading these companies to act. He also notes that artists deserve a lot more blame than they are receiving for the perpetually skyward costs in the live concert industry, and perhaps this is the product of the slow commoditization and big business-ification of our once-innocent industry.

I landed my first gig in the music industry in late 2002 (before I could drink, sign a contract, buy a lottery ticket, or even drive after midnight in Massachusetts), and have been working in and out of the business ever since. My first employer has been the one constant source of work throughout my entire career: a small in size but big in results concert promoter of the old guarde, and my longstanding mentors even through my present hiatus in law school. And so, my concern is not about ticket prices. From an industry perspective I do have faith in the free market to settle this somewhat – that there will come a time when U2 realizes they won’t fill Boston Garden at $250 a seat and the prices will sink. From a selfish angle I can still shell out $10 to see the bands I give a damn about at the Black Cat or Middle East, so no harm there.

No, my concern is the independent promoters. It’s something most concert goers do not notice or really care about, but the promoter is the catalyst that makes concerts happen. The promoter gets the venue, artist, labor, and marketing together to actually make a show come to life. The promoter assumes the risk; indeed, the promoter is the one that takes the proverbial and literal risk in the idea. Without independent promoters, my fear is that live performance market will suffer from a rather stagnant imagination. Put it another way: No Micheal Lang and crew, no Woodstock. No Dave Werlin, no Phish festivals. No Marc Geiger and crew, no Lollapalooza. No Kevin Lyman, no Warped Tour. No Barry Horgan, no All Tomorrow’s Parties. No Goldenvoice Concerts, no Coachella. The organic feel of all these festivals (in their early forms) is no happenstance. And that’s just the creativity. The innovations made in better live concert experiences (from more peaceful security to integrated medical support to clever concert swag) were made not out of concern for corporate shareholders, but with genuine desire to give fans the best experience possible. I do not, for a moment, believe that a corporate conglomerate will ever match what the independent and dispersed market has provided.

Throughout all of this ticket sale information is one of the closest guarded secrets a promoter can have. All calculations are made and most expenses flow from the volume of tickets sold at concert. At the really big shows – the festivals especially – you never want your rival promoters to know how many tickets you are selling, because a good promoter can do so much damage with that information. As healthy and strong as my relationship with my old employer was, I know my old bosses would fire me on the spot were I to start leaking that information to rival promoters.

But in America you have to sell your tickets with Ticketmaster, and thus Ticketmaster will always know how you’re doing. And in almost every market in America you are competing with Live Nation in the live promotion market: they own the venues and they have the promotion shops to make these shows happen on their own. My fear is what will happen to the independent promoters once their biggest rivals in the market know exactly how much money they are making. I’m not sure yet if it’s a fear I can characterize under the Sherman Act, but it’s a fear I have as a music lover and fan and what leads me to staunchly oppose this merger.

1 Comment

  1. […] is the principal concern I had with the settlement, as I expressed here.  I know we do this in other industries, but I’m still wary of a practice that allows a […]

    Pingback by US DoJ approves Live Nation / Ticketmaster Merger « Andy on the Road — 25 January 2010 @ 5:20 pm

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