THE SCIENCE OF PUTTING BUTTS
IN SEATS
Live Nation is a looking at a record year in revenue and operating income, staging a record number of concerts worldwide—29,000-plus—and growing the revenue generated at each show. Bob Roux, co-President of the U.S. Concerts division, was willing to explain how things are working these days at the world’s largest concert promoter.
You’re seeing a significant increase in the number of concerts that Live Nation is presenting. What’s at the core of that growth?
It’s not just the number of concerts but the number of successful concerts, from the artists who were just starting out three four years ago to the heritage artists who are having the biggest tours of their careers. There’s no doubt artists are becoming more exposed earlier and more expansively than they were 10 years ago, when it was about the full album or the occasional video. It’s far easier to learn about new artists today.
So let’s say a new artist seeks out Live Nation and says, “We’d like to assemble a tour.” Where do you start?
Whether it’s somebody with their first single or an act with more catalog, we sit down and have an open dialogue, and between Live Nation, the manager and the agency, we come up with the right rooms in the right markets so they can sell out their dates.
Harry Styles has his first arena tour set for next summer. How did you set that up?
Tickets immediately sold out—the demand was so heavy. For Harry’s first solo tour, he had certain goals in mind financially, and we wanted to ensure it was priced right for an immediate sellout.
It’s one thing to have success on the recorded-music side, but in this day and age, it would seem Live Nation wants to know the artist is capable of delivering a good show. When do you raise the age-old question, can they do it live?
The artist’s production team in most cases still takes the responsibility for understanding per-week economics to create and build the show and keep it on the road. They also know they have to be competitive. Every artist needs to have an exciting and original-looking show. Pictures from every show are getting posted and going around the world, getting their brand out there. They have to be aware of that visual element.
On the ticketing side, we see a lot of pre-sale programs and Ticketmaster’s Verified Fan platform. What about the promoter? Are they getting that information, and how do you use that?
Say you have an artist who wants to work with Live Nation. As part of those early-stage meetings, we want someone from Ticketmaster’s artist services to sit down and talk with them about various options—prices, distribution, identifying fans from previous tours, identifying fans of similar artists. Learn who they are and make sure they get first crack at tickets before the tour gets infiltrated by brokers.
What’s the concerts division’s involvement with ticketing?
Distribution, pricing, marketing. We sit down with artist to discuss what has evolved between tours. We have a lot of data on ticket sales, and we want to share that with artists so we can find the right combination of price and scaling to maximize the growth.
When does bundling enter the picture?
In some cases, there may be record company contracts where they want the artists to think strongly about it. The label business was the tail that wagged the dog. Now the live business is their main focus. In some cases, if they bundle the record, they make a quarter million in sales right off the back of it. It’s all striving for “We got you to #1”; it’s one of the tools.
If we were talking ticketing a few years ago, it was the sudden jump in prices and VIP experience to battle the scalpers. What’s the approach on the high end now?
Prices for the best seats in the house are continuing to rise on the primary market to remove the arbitrage. I always want to inform artists about what might have happened on a previous tour regarding the best seats and get those priced a little closer to what we believe is fair market value.
We saw a lot of arena and stadium shows for summer 2018 go on sale in the fourth quarter of 2017. How far out do you like to go with an onsale?
Our research and experience—this is going on three years now—says you can go on sale six to nine months out. We already have some tours for fall of ’18 on sale. People are willing to make the investment, almost regardless of how far it out it is, especially for weekend shows.
This time of year, a ticket to see the Eagles or Foo Fighters is a nice Christmas gift. What about the rest of the year?
For the 2018 touring year, we want the vast majority of everything on sale no later than Mother’s Day/late April. That has worked for us at venues with 10k-60k capacity.
How about festivals? Live Nation has been getting increasingly involved with them. Is that a different type of fan? And as one act after another goes on festival tours and plays six to 10 of then, how are you differentiating?
We’re striving to make sure we create identifiable brands and identifiable patron experiences at festivals. Look at Bottle Rock, which we acquired. It’s curated around the Napa Valley experience. I would not call it a value proposition. There are many layers of VIP experience: You’re dining well, picking out top wines, seeing the show from a prime spot at the edge of the stage. It’s not to say the artists aren’t the main attraction, but we really want to crate an experience. For the country fests, the goal is get the fan base to say, “I really like the environment.”
In the coming year, what are you cautiously optimistic about?
I’m always looking at the economy, and I see a good tailwind for expendable income. We’re finishing on a high note, and I’m loving what I’m seeing on early ticket sales—P!nk is doing terrific, and Foo Fighters and Eagles are super-strong, so the conditions seem to be right. We want to keep working hard on the new artists you see coming out of the box really strong and with room to grow—Khalid, Charlie Puth, Portugal. The Man. There’s this whole crop of great bands, and we want to get them out here touring and growing their fan bases.
What are you wildly optimistic about?
I love the growth in the Latin business. We’ve been involved there for a long time, but we just made a big bet there. There’s a big Shakira tour on sale; it’ll be her highest-grossing tour. We just put Romeo Santos on sale, and we’re expecting tours from Luis Miguel, J. Balvin and Juanes—that’s a big push for me in 2018.
