The potential merger of Live Nation and Ticketmaster, first reported by the Wall Street Journal last night (Feb. 3), would create a company in control of the majority of box office dollars, the myriad revenues that can come from ticketing and the unlimited e-commerce potential the fan/ticket connection brings to live music.

The two strategies of Live Nation and Ticketmaster Entertainment have been quite similar: vertical integration, direct connection between fans and artist, bundling of content and tickets, and harnessing of the secondary market and the revenues produced therein.

The potential merger would leave the other players in the music business marginalized. While there is also talk that the second largest promoter, AEG Live, has been under the acquisitive eye of both Live Nation and Ticketmaster, independent promoters have to be worried that they will be on the outside looking in.

Agents should be concerned that their relevance with artists could be diminished when the keys to the vault are held by one powerful entity. With live music already the most reliable income stream for most artists, labels would have even less influence and would move more solidly into roles as distributors and, to a lesser extent, marketers.

A key point is the vast database that would be controlled by a combined Live Nation/Ticketmaster entity. The marketing efficiencies would be enormous, as would the value to sponsors.

Venues, on the other hand, could lose any leverage they might have gained when the landscape held two giants competing for their business. Secondary market sellers like StubHub also are likely feeling anxiety, as their days of dominating this golden goose of ticket price lift might be numbered with this merger. A dynamically-priced house could become the norm. The demise of service charges as add-ons is almost a given, and the traditional 10 a.m. public onsale is likely on its way out, regardless of what happens with this proposed merger.

Fans could win in some ways and lose in others, and, as fan message boards make clear, neither company currently holds an overly warm place in the hearts of many fans. Ticketmaster knows how to sell tickets better than anyone, and Live Nation has repeatedly taken a stance of fan friendliness. A Live Nation Ticketmaster could be a ticket-selling, fan-oriented machine; or it could be the only game in town and antitrust issues will arise.

Finally, who would be in charge, Tickemaster Entertainment chief Irving Azoff or Live Nation CEO Michael Rapino? Though Azoff's track record is longer, both he and Rapino have proven to be savvy strategists and visionary about where the music market is headed. And while the "clash of the titans" might be a moot point now, a culture clash to some degree might be inevitable.

It may well be that Ticketmaster would only oversee the ticketing end of the business. And with one company instead of two, the management end of Front Line might be less likely to pressure Live Nation for touring guarantees that make profit margins on ticket sales razor thin. With their combined efforts, ancillary revenues from ticketing lessen the importance of revenue from straight ticket sales.

The stock for both is headed up this morning; Ticketmaster nearly 15% to $7.08 and Live Nation more than 12% to $5.67.

Questions? Comments? Let us know: @billboardbiz

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