Live Nation is the largest live entertainment company in the world. They promote more concerts and sell more tickets than any other company. According to their website, Live Nation promotes over 40,000 shows per year for nearly 5,000 artists. In 2019 alone, they sold over 95 million tickets. So what has allowed Live Nation to gain such a dominant position in the live music industry?
Early History and Mergers
Live Nation was formed in 2005 after Clear Channel Communications spun off its live entertainment division as a separate company. The live entertainment business under Clear Channel had already grown significantly through acquisitions. In 2000, Clear Channel acquired SFX Entertainment, which was the largest promoter of live events at the time. This gave Clear Channel a commanding position in tour promotion and venue management.
After the spin-off, Live Nation continued to grow through major mergers and acquisitions. Some key deals include:
- 2006 – Acquired House of Blues and North American theatrical business from Live Nation
- 2007 – Merged with Ticketmaster to form Live Nation Entertainment
- 2008 – Acquired Madonna’s touring company, CPI Touring
- 2009 – Acquired Front Line Management Group
- 2010 – Merged with Irving Azoff’s Front Line Management
The Ticketmaster merger in particular gave Live Nation unrivaled power in event ticketing, effectively creating a vertical monopoly. They now controlled ticket selling, concert promotion, major venues, artist management, and tour production.
Key Factors in Live Nation’s Market Power
Here are some of the key factors that explain Live Nation’s dominant industry position:
1. Extensive National and Global Reach
Live Nation promotes shows, sells tickets, and operates venues across North America, Europe, Asia, Australia, and Latin America. This expansive geographic footprint allows them to book tours and organize logistics for the largest artists that want to tour nationally or globally.
According to their 2020 annual report, Live Nation had over 100 million customers across 40 different countries. Such extensive reach creates major competitive advantages of scale and network effects.
2. Locked Up Major Venues and Artists
Through acquisitions and exclusive contracts, Live Nation has locked up relationships with many of the top venues and artists:
- Owns, operates, or has exclusive booking rights at over 200 major venues and festivals globally.
- Has exclusive promotion contracts with hundreds of artists, including U2, Madonna, Jay-Z, and Miley Cyrus.
With so many key venues and artists locked up, Live Nation has become the mandatory partner for rising bands that want to grow their audiences by getting access to premium venues and opening for top artists on tour.
3. Synergies Across Value Chain
Live Nation controls multiple links across the live music value chain:
- Talent representation through artist management companies like Front Line Management
- Tour production services
- Ticketing platforms like Ticketmaster
- Concert promotion
- Venue operations
- Sponsorship and advertising sales
This vertical integration allows Live Nation to cross-sell and bundle services in a way that makes competition very difficult. Their combined platforms also give them unmatched data and incentives to block rivals.
4. Aggressive Lobbying and Anti-Competitive Concerns
Live Nation spends millions lobbying local, state, and federal governments to support policies that favor its interests. Critics have accused Live Nation of monopolistic practices that make it hard for rivals to compete, such as:
- Requiring venues to use Ticketmaster as condition of Getting artists
- Locking up touring artists through 360 deals that give Live Nation a cut of all revenue streams
- Blocking rival ticketing platforms from acquiring tickets by tying up venues and artists
Live Nation argues they are playing fair and growing through innovation. But their tactics have attracted anti-trust complaints from competitors and scrutiny from lawmakers concerned about lack of competition.
By the Numbers: Live Nation’s Market Dominance
Here are some key statistics that demonstrate Live Nation’s commanding industry position:
|Live Nation Share
|Global concert ticket sales
|Primary ticketing platforms
|80%+ through Ticketmaster
|Major concert venues owned/operated
|Over 200 globally
|Top 100 tours in 2018
|Managed over 60%
Sources: Live Nation annual reports, Pollstar magazines, Songkick
As the numbers show, Live Nation and Ticketmaster have a strong majority position in tickets, venues, promotions, and artist management. The consolidation has reduced options and bargaining power for concert goers, venues, and lesser known artists trying to grow an audience.
[Additional data points and charts could be added here to visualize Live Nation’s dominance]
Live Nation’s dominant position appears secure for the foreseeable future. Some factors that help Live Nation maintain leadership:
- The live music industry has high barriers to entry and requires significant upfront capital.
- Venues and artists prefer to partner with established players like Live Nation who offer scale and geographic reach.
- Competing head-to-head against Ticketmaster’s dominant ticketing platforms is extremely difficult.
However, there are some potential threats emerging:
- Upstart ticketing platforms like AXS are having some success securing venue deals by undercutting Ticketmaster on fees.
- Artists continue to look for alternatives to 360 deals, which give Live Nation a cut of all revenue streams.
- Government anti-trust action could potentially break up Live Nation or force divestitures of key assets.
Live Nation will likely counter these threats through aggressive lobbying, acquisitions, exclusive deals, or copying competitors. With their immense scale and end-to-end business model, expect Live Nation to maintain their commanding industry position for years to come.
Live Nation’s dominant position is the result of an aggressive growth strategy built on major mergers, vertical integration, locking up key venues and artists, and lobbying governments. Their unrivaled scale, global footprint, and business model synergies across the live music value chain have made them enormously powerful and profitable. Rivals have found it nearly impossible to compete head-to-head. Unless regulators intervene, Live Nation is poised to continue its reign over the live entertainment industry.