Can the ticket price of the show rise again in the future?

"Tickets to the show are far underestimated."

The person who said this was Michael Rapino, CEO of global ticketing giant Live Nation. After the epidemic, the overseas performance market, like in China, has repeatedly seen controversy over soaring performance ticket prices, causing dissatisfaction among the majority of music fans. However, Live Nation, which is at the center of public opinion, has been quite determined to say on many occasions that the ticket price of the show can rise again. Can't help but make fans shout, "It's really torture!" ”

Even though it has been taken to court by fans many times, and even triggered an antitrust investigation by the US government, Live Nation does not seem to be worried about this, and many people in the industry support some of the measures proposed by Live Nation.

So, are the tickets for the show really low now? Is it really reasonable to raise the price again?

Can the ticket price of the show go up again?

"Compared to the market demand, I think our ticket prices are far from high enough."

On May 4, during Live Nation's earnings call, CEO Michael Ratino made this statement.

In the interview, Michael Rapino offered several reasons why he thinks fares can go up again.

The first is the rise in comprehensive costs. He pointed out that due to inflation, the cost of cars, labor, lighting and transportation increased by 19% compared to 2019, and the cost of performances naturally increased.

Secondly, from the perspective of the secondary market, there is still a lot of room for the price increase of performance tickets. Joe Berchtold, president and chief financial officer of Live Nation, mentioned on the earnings call that "the average price of secondary market tickets is still close to twice that of primary market tickets, indicating that music performances and other live events are still priced below market prices." ”

In Michael Rapino's view, good performances are like platinum bags, and many big-name stars only have a big concert once in a few years, and these performances are extremely high quality and rare. And fans have a strong emotional connection to these singers, they always play their songs on a loop, regard the idol's performance as "a truly special moment in their lives", and will willingly pay a high price for it.

Take Taylor Swift's 2022 Era's Tour tour, for example.

The tour was handled by Live Nation's ticketing platform Ticketmaster, but even as the world's leading ticketing platform, Ticketmaster couldn't hold the enthusiasm of fans. With visits by more than 14 million users, including bots, and pre-order applications from more than 3.5 million verified followers, the Ticketmaster website crashed and even had to cancel subsequent regular sales, leaving many fans so worried that they couldn't buy tickets that they sued Ticketmaster for fraud and antitrust violations.

Such a huge demand for fans is clearly beyond what Taylor Swift can meet in the short term. Ticketmaster said more than 900 stadium-level shows would be needed if Taylor Swift was to meet the needs of those fans. In other words, if Taylor Swift performs every night for 2.5 years, it will be possible for all fans to have no regrets.

With demand outstripping supply, although Taylor Swift tickets range from $49 to $899, they have been speculated to a maximum of $21,000 in the secondary market, with an average price of $600. As it turned out, the average price wasn't inflated, with BuzzFeed reporters interviewing 30 attendees after the show and paying an average of more than $690.

In addition to short supply, the reason why fares can rise is because of the upgrade of the experience. Michael Rapino believes that compared with sports performances, music performances have many upgrades in the experience, such as more and more gorgeous venues, more high-end VIP services, and the price can naturally go up. At the end of April, Live Nation set up a new performance experience company, Vibee, to meet the needs of fans through a full range of services, such as exclusive shows in intimate venues, cruise ships and hotel receptions.

Overall, both the demand reflected in the secondary market and the difference in experience and price between major sporting events and current music performances lead Michael Rapino to believe that the price of performances is now far below the market level.

The scalper's money is earned by the artist, why are the fans still unhappy?

In order to expand the upside of tickets, Live Nation continues to focus on pricing strategies in other markets and launched dynamic pricing as early as 8 years ago. This mechanism is to make the performance tickets like plane tickets and hotel rooms, the price will change in real time according to supply and demand throughout the ticket sales process, and the higher the demand, the higher the price.

According to Live Nation, dynamic pricing is designed to allow artists and organizers to price tickets closer to their true market value, and to allow fans to get tickets more fairly and safely without scalpers. But in the eyes of fans, Live Nation is just trying to get a piece of the scalper. After all, if the person who bought the ticket does not like the price of this flight and can change the flight, the show will not work.

This is because large U.S. show organizers often partner exclusively with one platform in order to get more benefits from ticketing platforms, so that fans can only choose between the Live Nation ticketing platform and the secondary market. One fan who gave up on tickets because of staggering dynamic ticket prices said, "Music and musical gigs shouldn't be a luxury that bankrupts you. ”

Due to the economic pressure brought about by the epidemic, Live Nation and more co-artists began to implement dynamic pricing, in which the seat ticket relying on dynamic pricing is called "platinum ticket", but the seat represented by the platinum ticket is not necessarily in the front row, which alone is enough to make fans angry.

In March, there were also Canadian fans of Drake who filed a class-action lawsuit against Ticketmaster. After a fan bought two platinum tickets for $789, the platform announced the next day that Drake was performing a second show at the same venue, but the same seat was priced at less than $350.

"Ticketmaster unilaterally decides which tickets to advertise and sell as 'Official Platinum' based on a given event," the legal document says, and "the result is that most of the tickets advertised and sold as 'Official Platinum' are neither 'premium tickets' nor 'some of the best seats inside,' in fact, just general admission tickets Ticketmaster maliciously inflating the premium."

There are also many fans who are angered by dynamic pricing. Big-name singers such as Taylor Swift, Bruce Sprinsteen and Justin Bieber have all been caught up in controversy over the use of dynamic pricing, which even BTS fans Army.

At the recently announced BTS concert in the United States Dynamic, BTS-owned HYBE and Live Nation adopted dynamic pricing, and announced that all its artists will adopt this model. This also made many fans feel dissatisfied, some fans accused HYBE of inconsistent words and deeds, saying that "the driving force that brought BTS to where it is today is the fans", but now they treat fans as leeks, only so that rich people can listen.

One fan shared that the original $225 ticket went up to $750 because of dynamic pricing, and asked HYBE, "Do you really believe in music?" "A large number of Army tweets #NoDynamicPricing have been searched around the world, as well as in South Korea and the United States. There was also a collective boycott of HYBE's periphery in protest.

Dynamic pricing, though, did make Live Nation a success.

The February 2022 earnings call showed that the average ticket price in 2021 increased by 20% compared to 2019, mainly due to the "platinum ticket". Live Nation's CFO also sees this as a huge potential space. So, even in the face of many controversies, Live Nation is determined to stick to dynamic pricing to the end.

Thanks to the recovery of the performance market, Live Nation also achieved record-breaking growth this year. First-quarter earnings showed that revenue from all segments worldwide increased 73% year-over-year to $3.1 billion. Among them, the quarterly revenue of ticketing platform Ticketmaster itself rose 43% year-on-year to $677.7 million, selling 145 million tickets, and "all events reached record levels".

But while Live Nation was having fun, fan-hating scalpers weren't kicked off the game for platform strategy. The Cure, for example, deliberately controlled ticket prices when they toured the U.S., some as low as $20 and refused to participate in dynamic pricing, then found their tickets flowing into the secondary market and being inflated.

In December 2022, Live Nation also cancelled hundreds of tickets for the Bad Bunny show, citing a large number of fake tickets, resulting in many valid ticket holders being denied admission. The aforementioned Taylor Swift show also canceled the subsequent normal sales due to excessive pre-sale demand, resulting in fan prosecution and the U.S. Senate launched an investigation.

Talking about the reasons why scalpers are difficult to contain, on the one hand, there is a necessity for the secondary market, whether for the platform or fans. Fans can have a variety of unexpected needs to resell tickets, and platforms also need secondary markets to facilitate ticket circulation and reflect the market value of tickets.

On the other hand, although Live Nation already represents the world's leading ticketing technology, Micheal Ratino believes that this is not something that technology can solve, but requires the efforts of the entire market. Michael Rapin called on the government to regulate the secondary market and better enforce The BOTS Act, which prohibits scalpers from selling tickets purchased with robots on the secondary market. And, let the entertainers and event organizers decide the rules for reselling tickets, not the ticket holder.

In the absence of solving the scalper problem, the dynamic pricing of the ticketing platform is more like joining the scalper's team, not only making itself the object of fan dissatisfaction, but also making fans feel cold about idols who agree with this pricing strategy.

Although there is still huge room for ticket growth, to eat this cake, platforms need to have both determination to clean up scalpers and empathy to deal with fans' psychological expectations.

How do you balance high and low fares?

In the face of controversy, Michael Rapino said Live Nation is still learning "what is a platinum ticket and dynamic pricing." To resolve the dynamic pricing controversy, he mentioned that the first thing the team learned was that dynamic pricing only works for performances where demand exceeds supply, and if the show itself is not in sufficient audience demand, dynamic pricing is meaningless.

The second is to only dynamically price high-end seats and services, so that fans feel that the high price is also worth the money, reducing the psychological gap. Meanwhile, Michael Rapino is also considering keeping the price of the Platinum ticket under $1,000. Other ticketing platforms have tried promising that some of the dynamically priced ticket revenue will go to public good, but fans don't seem to be happy with this rhetoric.

In order to calm the anger, but also to stabilize the low-price market and expand revenue, Live Nation has also launched a series of low-priced performance events, such as the recently launched Live Nation music festival single-day pass pass, which only costs $99 to unlock the largest music festival in Europe and the United States in 2023; Live Nation also launched a summer concert week, with tickets for nearly 4,000 shows priced at just $25.

But there are still business opportunities for these shows, and "the low-priced tickets are just the starting point for our revenue," says Michael Rapino, "and when fans attend the show, they continue to spend money to enhance the experience." ”

It can be seen that Live Nation has also noticed the public opinion reaction of the market while making money, and has maintained its public image by actively accepting interviews, increasing low-priced performances, etc., and further reflecting and adjusting its pricing strategy on the basis of adhering to core judgments, understanding consumer psychology, and achieving long-term benefit expansion.

As British singer and actress Carrie Hope Fletcher puts it, "There's something unique about live performance. Live is good, but sitting on the spot and getting together with a group of strangers to experience that electric current is different from live broadcasting. ”

Due to the unique humanistic charm and sense of experience of live performance, performance business is by no means a business that can be completed by commercial logic alone. How to understand the voice of music fans and make music fans willingly pay more money is probably a problem that the performance industry has always faced.

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