Live Nation Attendance Drops 22%. Is Live Music In Trouble Too?
Conventional wisdom says that live music is exempt from recessions. Even when times are tough – perhaps particularly when times are tough – people want to party. But that didn"t prevent Live Nation's first-quarter losses widened as the company saw a sharp drop in attendance for North American concerts.Live Nation's quarterly earnings report showed a loss of $102.7 million, or $1.29 a share, compared with a Q1 2008 loss of $37.2 million (.50 cents per share.) The promoter also saw a 33.4 million loss of revenue that was due primarily to international currency rates. The losses were palliated by higher revenue from Sweden, Belgium and The Netherlands where stadium, arena and theatre events had a strong quarter.
The North American live music sector was particularly tough for Live Nation and they reported a precipitous drop of 22.6% in attendance at live events from the same period in 2008 although revenue per fan was up by 5.7%. Live Nation staged more concerts during the first 3 months of 2009 as well, up by 1% to 4,528 from Q1 2008.
Live Nation also posted an operating income loss of $58.1 million, a 27.7% increase from the same period in 2008. These losses underscore Live Nation's recent moves to try to divest themselves of some of their inventory of venues such as the Orpheum in Boston, which they characterize as "non-core" assets, in order to raise cash to grapple with their extensively leveraged position.
In spite of all the gloom, there were a few bright spots. Sponsorship revenue was up by 17%, despite a huge hit (42.4%) in the number of sponsors from Q1 2008. International concert attendance was up as well and Live Nation posted an increase in ticket sales of 17.4 from Q1 2008.
Investors also seem to have a little more confidence in the company as reflected in their stock price which has doubled since its March lows, closing Thursday at $5.13.
"Our first quarter results were in line with our plan and, despite challenging economic times, fans are buying concert tickets at a healthy pace," said Live Nation President/CEO Michael Rapino in a statement.
"During the quarter, several trends emerged that serve as an indicator for the year ahead. Deferred revenue grew significantly, highlighting the strength of summer ticket sales. Per head revenue grew, indicating that event onsite purchasing patterns of fans have remained strong. Our sponsorship revenue also increased in the quarter, despite the global advertising turndown. During the quarter, we cut our capital expenditures nearly in half and are on track to reduce our capital expenditures by approximately 70% in 2009. As a result, we expect to drive strong growth in our cash flows in 2009, which will allow us to begin to reduce our debt, to the benefit of our shareholders." Rapino added. – via CelebrityAccess
People are slashing spending in so many areas that I would be surprised if live music isn’t affected. If you are not going out to dinner as much, if you are switching to prepaid cellphones to save money, if you are buying fewer clothes, then are you really going to keep going out to clubs and shows?
I’m sure there are people whose incomes have remained untouched, but across the population as a whole, people are spending less in a lot of areas.
Ticket prices have gone up astronomically over the past few years, especially with the “secondary market” which seems to automatically snatch up everything except nosebleed seats. I went from seeing 20 concerts a year to zero concerts a year because I won’t pay $100 bucks to sit in the rafters.
I think fans have to boycott those overpriced concerts. If you do want to see live music, there are excellent shows priced $20 and under at many clubs.
Going to see a live show can take you away from the worries of the day, what’s happening in the world and help inspire. Music is important to our daily lives, to sooth pain, get connected, or to just plain dance around the living room for the hell of it.
There are 1000’s of extraordinarily talented performers of all genres traveling the country nightly from city to city playing at venues that cost $5-$25 for a great night. Live Nation and American Idol have brainwashed the general population that you have to be a gigantic star to be great. Any one reading this article knows that high ticket prices does not mean you are going to see a talented performer…it just means there were a lot of marketing dollars spent… and a lot of money spent on ridiculous production. Which is why they have to charge so much money for ROI.
Get out to your Folk clubs, small rock clubs, church basements, house concerts… support the players that are eating ramin noodles in exchange for the love of writing, performing and bringing it to the people. Not for making millions. Don’t stop seeing music! Just go to the places where you can pay a lot less and see new and talented people.
I have never understood why anyone thought Madonna was worth paying $250 for, it’s mind boggling to me. I manage a musician who’s ticket price never exceeds $25/$30… his fans of 20 years could and would pay more to see him and we know this…but he has no desire to increase the price just because he can.
Support your local music, and enjoy an inexpensive and great night…that very possibly will leave you really inspired!
I vote only for live music, don’t spand a money if it fake !!!!
Since Live Nation has taken over ticket distribution for their venues in the US, the cost is through the ROOF. A $12 service charge on $29 Damned tickets here in NYC at Irving Plaza.. that’s 41% of the cost of the ticket, bought directly FROM Live Nation for a venue that they own. $119 for “VIP” section Pogues tickets at Roseland.. Bought VIP tickets because my girlfriend has a plate in her leg and can’t stand for any length of time and, after getting the run around/different stories from four different staff at the venue, I was directed to the box office where they told us the Pogues needed the VIP section for their fans, so the extra $60 we spent of VIP tickets got us absolutely NOTHING.
Oh, and to top it off, Live Nation is offering a VIP program where you can pay ONE THOUSAND DOLLARS a year for the privilege of buying the not completely crappy seats (2 per event at selected venues at full price, natch)out of all the good seats they hold back from the general public to sell to scalpers. How sick is that?
The girl friend and I go to over 100 live music shows a year and those Pogue tickets were the last stop for us and Live Nation.
Thankfully, here in NYC we have loads of other, better venues and promoters (especially Bowery Presents), so we’re lucky.
Does any one care if the big guys attendance is down?
Someday, they may recognize the law of supply & demand.
I think the day has come for someone to care about the small artist and their great songs. There are tons of fans out there, who would go to Unknown Concerts by good artist/entertainers & since they are unknown, you could cut ticket cost by at least 50 to 80%. We love Indie artist that have recorded great songs that most of us never have heard of. There are thousands of these folks out their, that the big guys will not give the time of day.
We are supporters of all Female Artist….someday the world will recognize these very talented women/artist for their wonderful music.
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Totally agree about the role of supply and demand – I work for a company, http://www.owngig.com where fans bid for concerts and we’ve seen a great response so far – and we’ve not even been launched for a year. There are other business models out there and Live Nation needs to look at this.
This is the time for bands and business to embrace the fans, give them a decen t show for a decent door price. The make them bleed ticket prices will make the fans resent the bands even more than the promoters. Everyone has to quit worrying about making their stock jump and maintain for a year or two. This may be the thing that makes bands heros in theri fans eyes. Stand up to the big play and say no the ticket is $35.00, can you make money on that and the answer is yes….just not $300 million dollar profit on that. Back to basics people.