Live Nation (LYV) CEO Michael Rapino recently recognized his live-events company, which organizes 22,000 shows a year, had a problem: 50% of customers polled said they didn't know about a show until it was too late, adding that had they known, they would have bought a ticket.
Tackling this issue proved to be a dominating factor in boosting Live Nation's revenues this year.
In an AOL interview Rapino acknowledges "2010 was a tough year for the industry, and in 2011 we didn't think was going to have any wind at our back." However, Chairman Irving Azoff says that because of streaming services like Spotify, "there's more interest than ever in music… and that's going to bode well for the live side of the business."
Here's how Rapino and the rest of Live Nation battled their economic slump:
Social Media: To stimulate purchases and tackle the "we didn't know until it was too late" issues, Live Nation has tried to address the "fairly inefficient marketing system in the concert business." He says "this year we spent a lot of time with Facebook working on our social strategy, we launched a fairly integrated program that when you buy a ticket at ticket master it publishes to Facebook and every time you publish you're name along with "I'm going to the Van Halen show" we're creating five dollars of incremental sales, because your friends are seeing that and then buying a ticket." This is in addition to launching a concert calendar and becoming more active with Twitter.
Strategic Partners: Live Nation sold over 1 million tickets through Groupon this summer. "We think they were very targeted." Rough research is coming back that says somewhere between 60-70% were incremental sales meaning, those that wouldn't have gone or wouldn't have known about the show "We think flash seats in general are a smart strategy for our inventory which is worth zero at midnight."
Other partnerships include kiosks in 850 Walmart stores located near meaningful concert venues across the United States. "We just now have a national footprint," says Chairman Irving Azoff. "If you know Walmart, they have this captured 110 million people that come in their stores and they aren't necessarily the people that have traditionally come to concerts."
Mobile Apps: Now that you can buy a ticket on mobile phones, Live Nation rolled out with an app. "We sold a million tickets on mobile apps in the last six months."
Untapped Markets: "We do 22 thousand shows a year there are still about 150 thousand shows a year that we have zero market share in. So we're not in Australia, Asia, we're not in Latin American in any substantial way… So untapped markets we think is a great runway."
Ticket sales were up this year on Ticketmaster.com, which also helped to boost revenues. But the company still plans to build up additional means of distribution and find ways to reach out to others who say they didn't know about a concert until it was too late. Live Nation also hopes to create more strategic partnerships to get in touch with groups of casual ticket buyers.
Interested in following the progress of Live Nation (LYV)? Here are a few tools to kick off your analysis:
Start with Kapitall's Compar-O-Matic to compare changes in average analyst recommendation for LYV and its industry competitors.
Use Kapitall's Turbo Chart to view LYV's performance against the S&P500.
By Rebecca Lipman
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