Okay, this may be one of the least surprising headlines you’ll read this week: the world’s biggest live entertainment company is hardly going to be pessimistic about its business coming back to life. But Live Nation’s latest financial results offer useful insight into how the company is thinking about live music’s return in 2021, as Covid-19 vaccines continue to roll out.
There’s obviously some bad news to cover too. In 2020, Live Nation’s revenues fell by 84% to $1.86bn, including an 84% drop in concert revenues to $1.47bn, and an 88% decline in ticketing revenues to $188.4m. The company moved from a $324.8m operating profit in 2019 to a $1.65bn operating loss in 2020 as the impact of Covid-19 and its lockdowns hit hard.
But positivity. In its financials announcement, Live Nation president and CEO Michael Rapino suggested that 2020 was a chance for Live Nation’s businesses to rethink and reorganise, ready to be more nimble – and with an even bigger focus on technology and digital ticketing – as live events return.
“The supply-demand fundamentals of the concerts business remain strong, with artists ready to get back on the road and fans eager to reconnect at events. All our data continues to show that there is substantial pent-up demand for concerts on the consumer demand side,” wrote Rapino in his note to investors.
“Given the limited touring activity in 2020 and 2021, the pipeline for 2022 is much stronger than usual, with almost twice as many major touring artists on cycle in 2022 than a typical year – about 45 artists versus the usual 25. And there remains plenty of scheduling availability at arenas, amphitheaters and stadiums to accommodate these additional tours, with over two-thirds of these venues’ nights unused by sporting events or major concerts in a typical year.”
In the company’s earnings call, Rapino had some interesting things to say about how Live Nation views livestreams too. “We’re still not sure if this is a business or a feature,” he told analysts, adding that the company was exploring livestreaming on YouTube and other platforms well before the pandemic. He said that Live Nation’s recent investment in Veeps opens up more opportunities.
“We think it’s kind of like a T-shirt and merchandise in a VIP platform. It’s another incremental revenue stream to the current physical show,” he said. “So when we’re putting those on sale, just like today, we try to sell you an upgrade, VIP package or a T-shirt. For those that can’t come to the show, but possibly even if you come to the show and you want to look at some other camera angles on your phone, we think it’s a good complement or an add-on to our physical show.”
Rapino also warned that watching entire concert livestreams may yet prove to be a niche, however. “Most people don’t want to watch two hours of their favourite band: they want to find that one great shot on TikTok,” he said. But with a number of large music companies making their moves to explore it – see also what Universal Music and Big Hit are doing with VenewLive – and independent players like Driift growing fast, there will be no shortage of resources devoted to finding out just how lucrative that niche could be.
Image by Olga Visavi / Shutterstock .com
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