As Live Nation stares down antitrust suit, here’s what CEO Michael Rapino says is the real ‘secret sauce’ for Ticketmaster’s success

Live events promoter and venue owner Live Nation, and its ticketing division, Ticketmaster, are in the midst of a legal battle with the US Department of Justice over the company’s business practices.

The DoJ filed a lawsuit against the corporation in May, alleging “monopolization and other unlawful conduct that thwarts competition in markets across the live entertainment industry.”

The DoJ’s lawyers particularly targeted Ticketmaster, arguing that “music fans in the United States are deprived of ticketing innovation and forced to use outdated technology while paying more for tickets than fans in other countries”.

If the DoJ gets its way – certainly not a guaranteed outcome – Live Nation may be forced to sell off Ticketmaster.

The concert giant has long defended its business practices, both before and after the DoJ lawsuit was filed, arguing that Ticketmaster doesn’t set ticket prices – that power belongs to the artists and sports teams to whose events Ticketmaster sells tickets.

The DoJ’s legal complaint “ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost,” Live Nation said in a response to the lawsuit.

“It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees. In fact, primary ticketing is one of the least expensive digital distributions in the economy.”

So if Live Nation’s business practices aren’t the reason for Ticketmaster’s dominance in the North American ticketing market, then what is?

In an appearance at this year’s Goldman Sachs Communacopia + Technology Conference, on Tuesday (September 10), Live Nation CEO Michael Rapino offered an answer to that question.

Ticketmaster’s success – which Rapino expects will be repeated in the world outside North America in the years to come – comes simply from offering a better product, both to consumers and the artists and venues that Ticketmaster serves.

“What Ticketmaster has continually done is built the best enterprise global platform,” Rapino said during a Q&A with Stephen Laszczyk, Goldman Sachs’ lead entertainment industry analyst.

Rapino said that, since Live Nation took over Ticketmaster some 14 years ago, the company has been “obsessed” with making Ticketmaster’s platform the one that venues, sports teams and artists want to work with. He said Ticketmaster’s “secret sauce advantage” is giving venues, artists and sports teams access to the data it collects from ticket sales.

“[When] we took Ticketmaster over, it was a closed platform that didn’t give data away. Today, it’s an open platform, it lets you take the data.”

Equally importantly, Ticketmaster offers its ticketing clients a suite of tools that makes using the platform easier than other options, Rapino said, comparing Ticketmaster to the types of enterprise solutions offered to businesses by Microsoft or Salesforce – a product that can integrate with a venue or sports team’s entire operation, and that’s easy for employees to use.

The goal is to get these businesses to say “’You know what, I like the other options, but [Ticketmaster has] the deepest connection. They have the most tools, the greatest data tools, the greatest way for me, the team owner or the venue owner, to use that,’ and outsource that to Ticketmaster,’” Rapino said.

Rapino’s description of Ticketmaster’s advanced tech is almost diametrically opposite to the DoJ’s description of consumers who are forced to use “outdated technology” to buy tickets. And, Rapino argued, ticketing technology as a whole is even less advanced in those markets where Ticketmaster isn’t the dominant player.

“Other than Canada, the US, the UK, maybe Australia, most other markets are really, really unsophisticated,” he said. “Maybe they’re still selling at retail, maybe they’re still selling on their phone. Most of those markets [have] very, very old integrated systems.”

“[When] we took Ticketmaster over, it was a closed platform that didn’t give data away. Today, it’s an open platform, it lets you take the data.”

Michael Rapino, Live Nation

Rapino said this presents “a great opportunity” globally for Ticketmaster.

“Most of Ticketmaster’s expansion will be on an international basis, in these markets that are under-serviced, [that] have — maybe existing competitors, but nowhere near the technology that Ticketmaster’s enterprise would have.”

Rapino did acknowledge the frustration that many consumers have felt with the ticketing business – an issue that came up once again in recent weeks, when would-be ticket buyers to Oasis’ UK tour next year found themselves without tickets, or facing sudden price spikes due to “dynamic pricing,” i.e., adjustments to ticket prices that happen in real time in response to demand.

That practice has now resulted in an investigation of Live Nation by the UK’s competition regulator.

Online ticket sales, coupled with growing demand for events, have highlighted the scarcity issue in the ticketing business, Rapino explained.

“[Ticket sellers] might not have known before when [customers] waited in lines. But today, [with] the Internet, you quickly know when you’re trying to serve 500,000 tickets to 10 million people. You’re waking up with 9.5 million [people] that don’t like you instantly.”

Michael Rapino, Live Nation

“In today’s world, consumers are never happy when they can’t get a ticket,” he said.

“‘[Ticket sellers] might not have known before when [customers] waited in lines. But today, [with] the Internet, you quickly know when you’re trying to serve 500,000 tickets to 10 million people. You’re waking up with 9.5 million [people] that don’t like you instantly.”

At another point during his Q&A, Rapino admitted that Live Nation has “never been able to figure out this PR struggle.”

Here are three other things we learned from Rapino’s appearance at the Goldman Sachs conference:

Artists have become ‘mini-corporations’

Rapino spent a considerable amount of time talking about the major changes that have taken place in the music industry in recent years and decades, such as the shift to digital music consumption that triggered a major globalization of artists and genres, and the fact that touring is becoming an ever larger part of artists’ revenues.

In fact, Rapino said that the largest artists in the business have become “mini-corporations” in and of themselves.

(In some instances, those corporations may not even be so “mini,” as can be seen by the economic impact of a Taylor Swift tour coming to town.)

Thanks to social media, artists are “all consumer-direct brands now,” Rapino said. “They’ve all got – on the low end – 10 million, [up] to 200 million, 300 million followers…. They know where their fans are.”

“The [concert] game [has been] elevated from a mom-and-pop shop to a global business, and that artist now wants… a global promoter with great local and global resources to help them.”

Michael Rapino, Live nation

Rapino gave the example of Adele’s recent 10-night residency in Munich, an event that included the construction of a temporary custom concert venue and reportedly boosted Munich’s economy by some €500 million.

“The idea that… you’re going to take a bet that you’re going to sell 700,000 tickets in one city… spend $100 million building this incredible temporary stadium… with the largest video screen in history… You don’t make those bets [with] no fan data,” Rapino said.

“So the artist knows where her fans are. Adele would know how many fans she has in Europe, how many in Munich, how many follow her, how big of a potential radius. So the artists now are much smarter around their data. They’re mini corporations. They’re looking for partners that understand data, understand globalization, understand pricing, monetization.”

Rapino added: “In the last 10 years, the [concert] game [has been] elevated from a mom-and-pop shop to a global business, and that artist now wants – much like they want a global record label that can think globally – they want a global promoter with great local and global resources to help them.”

The return on capital is ‘incredible’ when you own your own venues, and the greatest opportunities are outside US

Over the past several years, Live Nation has been busy building out its Venue Nation division, the part of the business that has been building concert venues around the world.

During the Q&A, Rapino explained why this is such a priority for the company. Simply put, it’s more profitable than putting on shows in venues owned by third parties or leased by Live Nation.

“We realized… instead of paying that incredible huge lease for 20 years, what if we built it? What if we then managed it and could finance it?” Rapino said.

“We started to kind of compare when we put a show in a non-Live Nation venue, when we put a show in a leased venue, or put a show in a venue we own. Your return on capital is incredible on the third option, when done right.”

“We started to kind of compare when we put a show in a non-Live Nation venue, when we put a show in a leased venue, or put a show in a venue we own. Your return on capital is incredible on the third option, when done right.”

Michael Rapino, Live Nation

Rapino said Live Nation is focused on building venues in “white space” markets – those markets that lack venues of a certain size, or where the existing venues may be old and under-serviced.

“Outside of America, most [markets] don’t have much infrastructure [for concerts] because soccer or football dominates the rest of the world. There is no NBA, no NHL. There’s no brand-new Chase Center in Singapore or Sao Paulo or Mexico City.

“So we look globally… We realize that the great white space in the arena business outside of America, that’s our greatest opportunity. So we now have some arenas in Europe, and we think there’s a great runway there. Everywhere, from Sao Paulo to Rio, we think they’re all under-serviced, and we think we can build them effectively.”

2025 stadium year will be a bigger stadium concert year than 2023

Last year was a gigantic one for stadium concert tours – think Taylor Swift or Bruce Springsteen. By comparison, 2024 is proving to be somewhat weaker on the stadium side, although Live Nation says it’s making up for that with a strong year in smaller venues like amphitheaters.

All the same, Live Nation’s revenue growth has slowed this year into the single digits – a result not just of fewer major stadium acts, but also because the previous few years’ numbers were comparing the Covid lockdown years, which makes for an easy comparison (and huge percentage growth numbers).

However, looking ahead at the major tours lining up for next year, Rapino predicts that 2025 will be an even bigger year for stadium concerts than 2023 was.

“Next year looks really strong,” he said, adding that, despite the relative weakness in stadiums, 2024 was still a strong year for arenas, and that’s likely to continue into 2025.

“We think it’s probably the best of everything next year, a strong pipe on the top end and consistent on the amphitheater end.”Music Business Worldwide