How art gets generated.
Thanks to top draws like Beyonce, Kid Rock and One Direction, the world’s biggest concert promoter Tuesday reported strong earnings for its second quarter that beat analysts’ expectations.
Live Nation Entertainment Inc., which also owns Ticketmaster, says it may be poised for its “strongest concert season ever” and the concert giant plans to keep boosting its bottom line with expansions into electronic music and ticket reselling.
The company had $1.7 billion (U.S.) in revenue for the three months that ended in June, up 8 per cent from the same period last year. In the same period, concert attendance rose almost 24 per cent globally. Adjusted operating income for the concert giant rose 9.5 per cent to $159.9 million, from a year earlier. Analysts on average had estimated $146.8 million, according to data compiled by Bloomberg.
Shares of Live Nation jumped 12 per cent to close at $18.32 (U.S.) in New York, their highest level in more than five years.
“Sponsorship and advertising delivered a 16-per-cent increase in revenue during the second quarter driven by new sponsors and improved online activity and Ticketmaster revenue was up 3 per cent with 2 per cent higher ticket volume,” added CEO Michael Rapino in a statement.
In a conference call with analysts, Rapino pointed to electronic dance music (EDM) and the secondary ticket market (resellers) as growth areas.
The California-based company which reportedly purchased a controlling interest in Insomniac, organizer of the Electric Daisy Carnival dance festivals which pull more than 200,000 people, for $48.1 million, expects to more than double its EDM attendance over 2012, anticipating 2.5 million plus fans at 17 EDM festivals in 2013.
“EDM has a great global runway,” said Rapino. “We’re nowhere near saturation. This is the music of today’s youth. There’s some great festivals out there…but there’s huge, huge global demand. You look at markets like Canada — Montréal, Vancouver, Toronto don’t even have an EDM event of (Insomniac) scale yet.”
Talal Farisi, Music Director at INK Entertainment, says he isn’t nervous that Live Nation has EDM designs on Canada. The company which runs The Guvernment and several other popular Toronto nightspots recently drew 70,000 — doubling last year’s attendance —to Downsview Park for the second annual VELD Music Festival.
“Competition is always healthy; we have our business plan, we know where we’re going,” Farisi said. “It’s a growing market that we as a company have paid close attention to and because we have a 20-year history of being in touch with that segment of the market we anticipated the need for a large festival and that’s why produce VELD.”
Live Nation which produces more than 22,000 shows annually for over 2,300 artists is also planning a bigger push into the reselling of tickets which Rapino described as “a $4 billion market in the U.S. alone.
Arham Shakoor, owner of Toronto-based ticket exchange mrticketking.com recalled the lawsuits Ticketmaster faced over redirecting buyers to secondary websites prior to merging with Live Nation.
“There’s some complications for them,” he said “I don’t expect them to be able to wipe out the secondary market.”
It’s been a busy, if not particularly profitable summer for Toronto ticket brokers, given the high original prices of the hottest tickets, said Shakoor.
There was big demand for the Beyonce and Drake shows, but the seats were already too expensive to mark up too much; meanwhile the Rolling Stones overshot.
“Prices were well over $600 per ticket for the Rolling Stones and they ended up going for significantly lower than face value because there was a lot of stock on the market,” said Shakoor. “We had well over 2,000 tickets still left on the secondary market days before the event and that’s when you saw prices just being slashed.”
On the other hand, the EDM trend meant tickets weren’t available at any price for Swedish House Mafia’s two Rogers Centre shows.
By Ashante Infantry, The Star, 8/7/13
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