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A RAPINO RAPPORT

For the 11th episode of digital audio show KindredCast, Live Nation CEO Michael Rapino—interviewed by Aryeh Bourkoff, CEO of media-centric investing banking firm LionTree—dishes on the future of the live music business, as well as its history.

Rapino touches on an array of facets, including global audiences, artist challenges and changing consumer behaviors.

"In 2005, we were a spin-off of Clear Channel Entertainment," he starts off. "They had attempted to kind of leverage concerts in their core business. It didn't work. They are separate businesses. So, when we spun out in 2005, expectations were low. We were the concert promoter, which was very low on the totem pole. All the chatter was always about the record label, and digital, and Spotify—and how that would be monetized and solved. At my first board meeting, I said to the board, 'We kinda have two options. We can dress up the pig and sell it, and someone will want a small concert company, but the center of the wheel is going to become live, and we can build a strong business around what will ultimately be the most important piece of the economics for the artist: live. We had a great supportive board and started to build, and started to really focus on being the largest live entertainment company and have kind of stayed at that course for 13 years now."

"Externally, back then, we believed the thesis was that live was an unduplicatable asset. This wasn't something that was going to be affected like many other media companies. And on a global basis—on a supply/demand basis—there were more artists than ever performing live, because it was the economics; you had to be on the road to make money. Distribution had opened up. Yahoo, YouTube, Facebook, you name it, now all of a sudden were broadcasting to that 19-year-old in Columbia, who knew who Rihanna was. So, you now had a global audience that was getting access to these rising artists, and you had the artists now who were able to travel to Columbia and Cape Town to perform. The pie was growing on a global basis, both from a consumer perspective (more fans wanted to go to live shows) and a supply/demand (in that more artists were going on the road to make money). So, we always looked at this like it was going to be a real growth industry. You look at the last twenty years of live entertainment; there's probably not been an industry with compounded growth as consistent as the live music business. And its fairly recession-proof. Live concerts continually rank in the Top 2 or 3 things that a consumer wants to and has to do as their escape."

Rapino, whose company is now serving approximately 80m fans, goes on to explain how he plans to bring that number to 100m and even 200m. 

As Bourkoff points out, with around $10b of enterprise value and stock as high as about $40 per share, Live Nation serves more customers and fans than the NBA, the NHL and the NFL combined around the world.

To get all the details, though, you can listen via SoundCloud right here: 

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