With news of lower ticket sales made public two weeks ago, the weak numbers in Live Nation's earnings release Thursday came as no surprise. The company's second-quarter earnings revenue was $1.27 billion, down 9.7% from last year (when compared to combined revenue of Live Nation and Ticketmaster, which did not merge until the first quarter of 2010).

The quarterly results were in line with guidance the company issued at its July 15 investor presentation. On that day, Live Nation warned of lower ticket sales, especially for concerts, for the first half of the year. The news sent Live Nation's stock into a tailspin, losing 21% over two days. But it has regained some of those losses. Live Nation shares closed at $9.46 on Thursday, down 2.7% but well above the low of $8.44 that followed the investor presentation.

In the second quarter, concert revenue dropped 7.1% to $860 million based on lower attendance and lower revenue per ticket. Artist Nation fell 17.5% to $89 million because of the timing of artist tours (this will happen when some artists, like Kenny Chesney, aren't on the road this summer). Ticketing fell 14.3% to $264 million due primarily to a 16.8% drop in concert tickets unit sales. And e-commerce sank 10.4% to $19 million.

Ticket sales at North American amphitheaters were down 14% (down 12% for the half year). And concerts were down 16% and arts were down 21%.

Notes from the Q&A:

-- The drop in ticket sales is hitting all segments of the market, according to Live Nation CEO Michael Rapino. "The bottom line across all business, whether it's a club or an amphitheater, was fewer tickets per show. At the end of the day it's mostly driven along bigger shows. That has the bigger EBITDA effect. But as you can tell from Ticketmaster's industry number, for them to be down 15-16% across an industry, that would tell you it would have to hit all segments of the industry," he said.

-- As he did on July 15, Rapino warned that the second half to 2010 could be slow. "Show count is not the problem ... Where we're feeling the softness would be the quality of the show count. We don't have a sizable, big lineup this Q3 and Q4 of 'A' artists and arenas that really drive the AOI. So I'd say the whole in the marketplace now -- in Q4 more than Q3 -- is some superstars that are going on the road to help push it you the edge," he said.

-- But if the artist is not touring in Q3 or Q4, Live Nation says they will tour in 2011 and tickets will be better priced. "We're confident the line-up will be strong," Rapino said. The industry has "read the tea leaves," he added, and will be smarter in buying and pricing talent. "They're not going to stop touring," added executive chairman Irving Azoff. "They're going to tour smarter ... There are no artists who don't want to charge less for tickets."

-- Once fans are actually in a venue, they are spending about the same amount of money. Per-head North American ancillary revenue was $18.59 during Q2 compared to $18.46 last year.