Friday, May 24, 2013
Online Ticketing Upstarts Challenge Live Nation's Concert Kingdom
Investors might want to rethink their enthusiasm for Live Nation (LYV-$13.78). To be sure, this new embrace of all-things digital has helped the company deliver on growth in ticket sales and operating results – ticketing profits have more than doubled since 2010, coming in at $122.8 million last year. But the live concert part of the equation continues to underperform: The company makes little money at the door. Additionally, though ancillary net revenue per attendee at North American events rose 45 cents to $18.56 year-over-year, concert segment net losses increased another $15 million to $(120.1) million in 2012.
Although Live Nation is unmatched in its global reach – and has new technology that makes it cheaper to sell tickets – operating margins at its concert promotion’s segment could face further pressure as smaller rivals look to scale up and compete directly against the company in higher-margin electronic dance music (EDM), festival and arena-sized events. For example, online ticketing vendor Eventbrite offers software that helps event organizers cheaply manage all aspects of a concert or film-festival, from marketing and online sales to ticket purchases and payments.
Continue Reading at YCharts: Live Nation up 36% YTD: But We've Got Bad News