Live Nation, Preparing To Battle Ticketmaster

[Jitway]

Ticketmaster, concert promoter Live Nation Inc. is looking to enlist powerful allies. The latest to sign on: U2, which has reached a 12-year deal giving the promoter exclusive rights to produce the Irish rock band's concerts, manufacture and sell its merchandise, license its image and run its Web site and online fan club.

 

The situation highlights the shifting landscape of the concert industry, as various players vie to expand their influence. Live Nation, the world's largest concert promoter by revenue, has said it is parting ways with Ticketmaster, the biggest ticket seller, when their partnership ends at the end of this year. Live Nation plans to launch its own competing ticket service to sell seats to its own concerts as well as events staged by others.

[Live Nation hopes the likes of U2 can help it in its looming battle with IAC's Ticketmaster.]

Live Nation hopes the likes of U2 can help it in its looming battle with IAC's Ticketmaster.

 

Live Nation has also acquired several companies that run Web sites and sell merchandise for artists, and it is looking for artists to sign to record deals like the one it entered last year with Madonna -- a move pitting it against record labels. Promoters, labels and ticketing companies alike are looking for ways to expand their presence online, by acquiring companies that market and promote music on the Web.

 

"It's clear that the lines, or the silos, that were in place historically are breaking down," Arthur Fogel, Live Nation's chairman of global music, said in an interview. Many previously disparate parts of the music business are being consolidated, he added: "Companies such as us are best positioned to execute on that basket of rights."

 

The U2 arrangement, which follows an even broader 10-year deal with Madonna, would guarantee desirable inventory for the new ticketing service, set to launch at the beginning of 2009.

 

Unlike Live Nation's $120 million deal with Madonna, the U2 agreement -- which is to be finalized soon -- doesn't cover distribution of recorded music or music publishing. For the same rights Live Nation is getting from U2, the promoter paid Madonna about $70 million. Terms of the U2 pact weren't disclosed. U2 extended its record contract with Vivendi SA's Universal Music Group late last year, according to people familiar with the matter, and also has a long-term publishing deal with Universal.

 

For U2, the arrangement represents a windfall that results ultimately from Live Nation's newly embattled position and its resulting need for loyal allies. The promoter is effectively paying the band to lock in the status quo: Live Nation or its predecessors have produced and promoted every world-wide U2 tour since 1997, and a Live Nation subsidiary already manages the band's Web site and fan club.

 

Live Nation Chairman Michael Cohl said he considers Ticketmaster "already our competition." He added that long-term artist relationships are one of two keys to the company's ability to compete effectively with its rival; the other key, he said, is building up infrastructure like venues and subsidiaries that can execute merchandise deals.

 

In preparing for this kind of battle, Mr. Cohl said, "one of the things you do is start to position yourself in terms of the hardware, and you try to position yourself in terms of the content. We're trying to line up as much of both as we consider meaningful and beneficial."

 

Live Nation's stock closed Friday at $11.83 in 4 p.m. composite trading on the New York Stock Exchange, sliding 10 cents and coming in at nearly half its closing price of $23.36 on Oct. 10, the day before the Madonna deal became known.

 

Formed in Dublin in 1976, U2 remains one of the most potent live draws in the world. Its most recent tour was the second-highest-grossing concert tour in history, earning $389.4 million at the box office, according to data from Billboard magazine. The Rolling Stones' 2005-07 "Bigger Bang" tour took in $558.3 million. Live Nation promoted both. U2's record sales haven't held up quite as well; 2004's "How to Dismantle an Atomic Bomb" wasn't among the 10 best-selling albums in the U.S. that year.

 

The deal may also offer ways for U2 to address problems that arose on its last tour. The band offered members of its online fan club, who paid $40 apiece to join, early access to tickets. But during the so-called fan-club presales, many would-be buyers encountered frustrating waits and a limited, expensive inventory comprising some of the worst seats in the house.

 

Ticketmaster had a hand in the presale fiascoes, inasmuch as its infrastructure couldn't handle the surge of ticket requests that flooded its computers. But people involved say the bigger problem was that there were simply too many members in the club to provide them all premium seats.

 

"We feel we've got a great Web site," U2 lead singer Bono said in a statement. "But we want to make it a lot better." U2.com is already hosted by Signatures Network, one of several merchandising companies recently acquired by Live Nation; they are being merged into one unit.

 

While Live Nation has been snapping up artists along with companies that provide them services, No. 2 concert promoter AEG Live has been seeking to make strategic moves of its own. Earlier this month talks stalled in a deal for Ticketmaster and Cablevision Corp. to take a 49% stake in the promoter, which is owned by Anschutz Corp.

 

 

 

Well it is about time they got off their asses and started doing something. As a big concert attender, usually attending 30+ shows a year I am sick and tired of Ticketmaster. They increase their fees every year and have fees now that I have never heard of. A say 38 dollar ticket last year to see Rush was almost 70 after fees. It is ridiculous.

 

 

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