Live nation
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The full Senate Judiciary Committee has opened its hearing on competition within the ticketing industry this morning and a number of witnesses have already set high stakes for the congressional probe, calling for drastic action in the ticketing space.
Moments after Live Nation president Joe Berchtold shared lengthy remarks on the causes of the Taylor Swift ticket crash, SeatGeek CEO Jack Groetzinger, one of Ticketmaster’s main competitors told Congress, “Live Nation controls most popular entertainers, routs most of the tours, tickets most of the concerts and owns many of the venues,” noting “this power allows Live Nation to maintain its monopolistic influence over the primary ticketing market.”
The 2010 consent decree governing the merger of Live Nation and Ticketmaster created “has not worked at all and violated the consent decree since its inception,” Groetzinger said.
“The only effective remedy is a structural one – the disillusion of the common ownership of Ticketmaster and Live Nation,” he testified.
Amy Edwards and Parker Harrison demonstrate against the live entertainment ticket industry outside the U.S. Capitol January 24, 2023 in Washington, DC.
Drew Angerer/GI
Jerry Mickelson, longtime promoter with Jam Concerts in Chicago who spoke out against the merger during Congressional hearing in 2010, called the deal “a vertical integration on steroids” and said its arena promotion business has decreased 90 percent since the merger.
Berchtold argued that the company’s marketshare of the concert market is close to 50 to 60 percent, not 80 percent as many have claimed. He also denied allegations that the company used its market size to punish competitors.
“It is absolutely our policy to not pressure, threaten or retaliate against venues by using content as part of the ticketing discussion.
Sen. Richard Blumenthal (D-Conn.) encouraged critics of the company and people who are fed up with the system that exists right now to “continue your criticism” as the Department of Justice takes a third look at Live Nation following a 2019 inquiry into the company.
“If the Department of Justice establishes violations of the consent decree, unwinding the merger ought to be on the table,” Blumenthal testified. “If the Department of Justice establishes facts that involved monopolistic and predatory abuses, there ought to be structural remedies that include breaking up the company.
Before taking his turn asking questions to witnesses, outspoken Sen. John Kennedy (R-La.) told Berchtold: “I’m not against big, but I am against dumb and the way your company handled Ms. Swift’s tickets was a debacle. Whoever at your company was in charge of that should be fired.”
This is a developing story — check back for updates.
Don’t expect Live Nation’s Joe Berchtold to be quoting Taylor Swift’s “Anti-Hero” during the Senate Judiciary Committee hearing on ticketing Tuesday. Unlike the pop star’s “I’m the problem it’s me” chorus-turned-meme, the company’s president and CFO plans to take aim at who he says are the real culprits behind Swift’s disastrous Nov. 15 presale — scalpers.
While the Live Nation-owned Ticketmaster was villianized for weeks following the presale for Swift’s upcoming The Eras tour that both broke single-day sales records and threw fans into a fury over service issues, according to a prepared opening statement reviewed by Billboard, Berchtold plans to lay much of the blame on scalpers who used illegal bots to attack the online sale. The statement, to be delivered Tuesday in Washington, D.C., to the committee led by ranking member Dick Durbin (D-Ilinois), details Ticketmaster’s ongoing “arms race” against scalpers illegally using autonomous software to disrupt and attack high profile ticket sales. Country music legend Garth Brooks is lending his support to Berchtold’s testimony as well, with a letter defending Ticketmaster and attacking ticket scalpers who use illegal methods to buy up tickets.
“We knew bots would attack [Swift’s] onsale, and planned accordingly,” reads Berchtold’s planned statement. “We were then hit with three times the amount of bot traffic than we had ever experienced, and for the first time in 400 Verified Fan onsales they came after our Verified Fan access code servers. While the bots failed to penetrate our systems or acquire any tickets, the attack required us to slow down and even pause our sales. This is what led to a terrible consumer experience that we deeply regret.”
Following the Nov. 15 presale, Ticketmaster eventually canceled its general onsale for the remaining 170,000 tickets to Swift’s tour. In December, the company announced a new strategy to sell the passes over the course of four weeks and recently concluded that effort. At the time, the company said “historically unprecedented demand” caused the failure, but blamed bots then, too — saying, 14 million fans and more than 3 billion bots hit the site. That excuse did little to satisfy the more than 100,000 fans who kicked out of line during the bot attack, and even the singer spoke out blaming the company. With many fans calling for Ticketmaster’s punishment, Berchtold also plans to apologize directly to Swift and her followers.
“As we said after the onsale, and I reiterate today, we apologize to the many disappointed fans as well as to Ms. Swift,” his statement reads.
While Berchtold notes Ticketmaster “accepts its responsibility to be the first line of defense against bots in this ever- escalating arms race,” he intends to shift the hearing’s focus to policy changes that could tamp down on scalpers.
“In this forum where we are here to discuss public policy, we also need to recognize how industrial scalpers breaking the law using bots and cyberattacks to try to unfairly gain tickets contributes to an awful consumer experience,” his statement reads. “We are doing everything we can to fight the people who attack our onsales and steal tickets meant for real fans, but we need help passing real reforms to stop this arms race.”
Brooks, in his statement, supports this notion.
“The crush of bots during an on-sale is a huge reason for program failure NO MATTER WHO THE TICKET SELLING COMPANY is,” writes the country icon in his letter addressed to Congress. “And the one who ALWAYS pays for this atrocity is the customer, the LAST one on whom that burden should fall.”
Brooks notes in his letter that he forced Dallas Cowboys owner Jerry Jones to allow him to use Ticketmaster to sell tickets to his April concert at AT&T Stadium, instead of SeatGeek which held the exclusive contract to ticket the stadium.
“I had grown to love and trust the people at Ticketmaster so much,” he explained in his letter, noting, “this was not because of Ticketmaster, but a choice I made.”
Berchtold will be joined on the witness stand by SeatGeek chief executive Jack Groetzinger and longtime Chicago promoter Jerry Mickelson with JAM Productions, along with recording artist Clyde Lawrence and representatives from the James Madison Institute and American Antitrust Institute.
Ticketmaster officials are expecting a pile on, both from Congress and the other testifying witnesses. SeatGeek has filed a number of complaints against Ticketmaster with the Department of Justice for alleged anti-trust violations, and Mickelson testified before Congress in 2010, condemning the merger between Live Nation and Ticketmaster. While company officials aren’t expecting any standing ovations, Berchtold’s testimony will be an important preview of the company’s framing of the challenges facing the business over the next couple of years and promises to be the most detailed defense of Live Nation by an executive in its 18-year history.
Sen. Amy Klobuchar (D-Minnesota) originally called for this hearing in response to public anger over the technical failures of the Taylor Swift Eras ticket sale. But the witness list and the name of the hearing, “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” released Monday (Jan. 23) suggest that the hearing is more likely to focus on long-simmering dissatisfaction over the 2010 consent decree governing the merger of Ticketmaster and Live Nation. That consent decree has had mixed success creating a level playing field for competition in the ticketing business, and critics consider it a failure because it didn’t prevent Ticketmaster from becoming the dominant ticketing company it is today.
“We hear people say that ticketing markets are less competitive today than they were at the time of the Live Nation-Ticketmaster merger. That is simply not true,” reads Berchtold’s statements, claiming Ticketmaster’s market share has decreased since the DOJ estimated it held 80% of the market in 2009.
At the time, Ticketmaster “did not face the level of competition we face today from new competitors including SeatGeek, AEG’s AXS, and Eventbrite, along with established competitors including Tickets.com and Paciolan,” Berchtold continues. “Today, there is intense competition for every ticketing contract that goes out to bid — far more than there was in 2010. Ticketmaster has lost, not gained, market share, and every year competitive bidding results in ticketing companies getting less of the economic value in a ticketing contract while venues and teams get more. The bottom line is that U.S. ticketing markets have never been more competitive than they are today, and we read about new potential entrants all the time.”
Berchtold plans to present the threat posed by bad actors and malicious software as an issue both the government and the private sector must address together. The strategy shifts part of the criticism for the Taylor Swift ticket debacle onto the Senate — which unanimously voted to pass the BOTS act in 2016, effectively outlawing automated ticket-buying technology. Since its passage, the law has only been enforced twice by the FBI and the Federal Trade Commission, despite pleas from Ticketmaster officials that bot attacks on high profile ticket sales are increasing in frequency and complexity, sources tell Billboard. Berchtold also plans to detail how the company has spent more than $1 billion developing technology to prevent bot attacks on the company’s ticket sales using software like Verified Fan and digital ticketing.
A ‘blame the bots’ strategy is not likely to satisfy the members of the Senate Judiciary committee, which include such conservative and liberal firebrands such as Ted Cruz (R-Texas), Josh Hawley (R-Missouri), John Kennedy (R-Louisiana), Diane Fienstein (D-California), Corey Booker (D-New Jersey) and Richard Blumenthal (D-New Jersey). Anti-Ticketmaster sentiment and criticism of the 2010 merger between Ticketmaster and Live Nation is one of the few issues of bipartisan agreement on Capitol Hill.
Berchtold will end his testimony laying out calls to action he believes Congress can take to combat bad actors in the ticketing industry: First, is empowering private parties like Ticketmaster to bring civil actions against ticket sellers who knowingly sell tickets obtained by bots. Second, Berchtold believes Congress should act to outlaw deceptive sales practices like speculative ticket sales “offering for sale tickets you don’t own or have an existing right to obtain,” or deceptive sites that mislabel themselves as “the official” ticket seller for shows they aren’t contracted to work with.
The Senate Judiciary Committee’s “That’s the Ticket: Promoting Competition and Protecting Consumers in Live Entertainment” begins at 10 a.m. EST on Tuesday. Click here to watch the hearing live.
The Senate Judiciary Committee will hold a hearing on Jan. 24 at 10 a.m. EST examining the ticketing industry and Ticketmaster’s handling of the Taylor Swift ticket sale, Senator Amy Klobuchar‘s (D-MN) office announced.
Titled “That’s The Ticket: Promoting Competition and Protecting Consumers in Live Entertainment,” the hearing will look at accusations of anti-competitive behavior in the ticketing space and examine the history of the 2010 Department of Justice consent decree governing the merger of Live Nation and Ticketmaster.
The merger has long been criticized by members of both parties with Klobuchar recently identifying the Swift crash as an example of how “Ticketmaster’s power in the primary ticket market insulates it from the competitive pressures that typically push companies to innovate and improve their services.”
The Nov. 15 sale crash, which affected both Ticketmaster and its competitor SeakGeek, was the result of massive demand from Taylor Swift fans and an illegal bot attack, Ticketmaster wrote in a Nov. 15 blog post.
Klobuchar, who chairs the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, will be joined at the hearing by ranking member Mike Lee (R-UT) for the hearing before the full Senate Judiciary Committee with Chair Dick Durbin (D-IL) and incoming ranking member Lindsey Graham (R-SC).
“The issues within America’s ticketing industry were made painfully obvious when Ticketmaster’s website failed hundreds of thousands of fans hoping to purchase tickets for Taylor Swift’s new tour, but these problems are not new. For too long, consumers have faced high fees, long waits, and website failures, and Ticketmaster’s dominant market position means the company faces inadequate pressure to innovate and improve,” Klobuchar said in a statement. “At next week’s hearing, we will examine how consolidation in the live entertainment and ticketing industries harms customers and artists alike. Without competition to incentivize better services and fair prices, we all suffer the consequences.”
“American consumers deserve the benefit of competition in every market, from grocery chains to concert venues,” Lee added. “I look forward to exercising our subcommittee’s oversight authority to ensure that anticompetitive mergers and exclusionary conduct are not crippling an entertainment industry already struggling to recover from pandemic lockdowns.”
“It’s been more than a decade since Ticketmaster merged with Live Nation, and competition in the ticketing and live entertainment industries has only gotten worse. Too often, consumers are the ones who pay the price for this market failure,” said Durbin. “I look forward to this hearing to explore what led to this environment, as well as steps we can take to bring competition back to these industries in a way that puts fans and artists first.”
“I’m glad to see the committee will look into the Ticketmaster debacle,” said Graham. “I look forward to hearing more about how we got here, and identifying solutions.”
A witness list has not been released for the Jan. 24 hearing. A spokesperson for Ticketmaster did not comment when asked about the upcoming hearing.
Madonna is planning a massive 40th anniversary tour later this year with her longtime concert promotion partner and producer Live Nation and music manager Guy Oseary, sources tell Billboard.
The 64-year-old pop icon will perform music from her entire catalogue, dating back to her 1983 self-titled debut album through her most recent studio album, 2019’s Madame X. The world tour will be Madonna’s first ever career retrospective, featuring a compilation of her biggest hits across four decades of music and will reportedly include a multi-night run at the O2 in London.
“It’s going to be the biggest tour she’s ever done,” one executive familiar with her plans tells Billboard. The tour will include both stadium and arena dates, the source says, and include over-the-top production that delivers both “Material Girl” kitsch and occasionally outrageous sex appeal with plenty of show-stopping moments made for social media.
Billboard has also learned that Oseary will continue to serve on Madonna’s management team, despite stepping down from his role at mega-management collective Maverick in 2020 and splitting with longtime clients U2 in 2022.
The tour buzz comes just months after the “Hey You” singer released her career-spanning compilation album Finally Enough Love: 50 Number Ones, spanning her entire dance club career, featuring remixes by top producers including 20 rare recordings officially released for the first time. In 2021, Madonna signed a deal with Warner Music Group for an “extensive, multi-year series of catalog releases that will revisit the groundbreaking music that made her an international icon.”
Madonna last toured in 2019 and early 2020 on her Madame X tour, a theater run that was struggled through production delays and Madonna’s recurring hip and knee injuries. While the Madame X tour earned strong critical reviews in the press, its habitually late start time often angered ticket holders and prompted two class actions lawsuits from fans.
When it comes to choosing her nightly set list for this new tour, Madonna will have no shortage of songs to choose from with 57 titles charting on the Billboard Hot 100, 38 top 10 hits and 12 No. 1s, including 1990’s “Vogue,” and 2000’s “Music,” released a decade apart and each spending 24 weeks on the Hot 100. Madonna’s “Borderline” from 1984 spent 30 weeks on the Hot 100. She followed that impressive feat a decade later with the ballad “Take a Bow,” which held the No. 1 spot on the Hot 100 for seven weeks.
Madonna’s 2008-2009 Sticky and Sweet Tour is the highest grossing tour by a female artist ever, according to Billboard Boxscore, netting $407 million. Her most recent Madame X theater run grossed $36.4 million with 124,655 ticket sold.
Reps for Madonna could not be reached for comment at time of publishing.
Less than three weeks after two dozen Taylor Swift fans sued Live Nation over Ticketmaster’s disastrous presale of tickets to her Eras Tour in November, another similar lawsuit has been filed against the concert giant in California federal court.
Filed Tuesday (Dec. 20), the class-action lawsuit, brought by Swift fan Michelle Sterioff, accuses Live Nation and subsidiary Ticketmaster of violating federal antitrust and unfair competition laws and “intentionally and purposefully” misleading “millions of fans into believing” Ticketmaster would prevent bots and scalpers from participating in presales for the tour.
Similar to the lawsuit filed earlier this month, Tuesday’s lawsuit alleges that Live Nation and Ticketmaster, which merged in 2010, represent a monopoly in both the primary and secondary ticketing markets and have used that alleged monopoly power “in a predatory, exclusionary, and anticompetitive manner.” According to the complaint, this monopoly is used to charge “supracompetitive” ticketing fees that can increase the price of tickets “by 20-80%” over their face value.
“Ticketmaster…has violated the policy, spirit, and letter of [antitrust] laws by imposing agreements and policies at the retail and wholesale level that have prevented effective price competition across a wide swath of online ticket sales,” the complaint reads, adding that the company “is only interested in taking every dollar it can from a captive public.”
Sterioff claims that she registered for the Eras Tour presale on Nov. 1, 2022, and “relied” on Ticketmaster’s claim that its Verified Fan program “would ‘level the playing field’” so that more tickets would go to real fans over bots. However, she claims she was unable to secure a ticket during the presale on Nov. 15 or Nov. 16, forcing her to purchase tickets “through an alternate secondary ticketing service provider” after Ticketmaster canceled the general public sale, citing widespread service delays and website crashes as millions of fans tried -– and many failed –- to buy tickets.
Additionally, Sterioff says the amount she paid for her ticket on the secondary market was subject to Ticketmaster’s “monopolistic prices” due to the company’s dominance in the secondary ticketing market as well. She cites a Ticketmaster technology that limits ticket purchasers from transferring tickets unless they’re resold through the company’s secondary ticketing platform — essentially making it all but impossible to purchase a Swift ticket outside the Ticketmaster ecosystem. That allows the company “to charge monopolistic ticketing fees every time a single ticket is resold,” the complaint adds.
There are a total of eight counts listed in Sterioff’s complaint, including violation of California’s Consumers Legal Remedies Act; intentional misrepresentation; common law fraud; fraudulent inducement; antitrust violations; violation of California’s Unfair Competition Law; violation of California’s False Advertising Law, and quasi-contract/restitution/unjust enrichment.
Sterioff is asking the court for injunctive relief, statutory damages, punitive or exemplary damages, costs of bringing the lawsuit and more.
Reps for Live Nation and Ticketmaster did not immediately return a request for comment.
In the wake of the Swift ticketing controversy, Ticketmaster apologized to fans and pinned the blame on a “staggering number of bot attacks” and “unprecedented traffic.” But that explanation has seemingly not been enough for many of the company’s critics, who have resurfaced longstanding complaints about the outsized power Ticketmaster and Live Nation have wielded in the market for live music since they merged.
In November, Sen. Amy Klobuchar (D-MN) and her counterpart on the Senate Judiciary Subcommittee, Sen. Mike Lee (R-UT), jointly announced they would be holding a hearing to examine the effects of consolidation on the ticketing industry. Live Nation and Ticketmaster are also reportedly under investigation by the Justice Department over whether the companies represent an illegal monopoly, though that probe is said to have predated the Swift incident.
After massive technical problems marred the Nov 15. pre-sale for Taylor Swift’s Eras tour, forcing some fans to queue for several hours to buy tickets or fail to buy them entirely, Ticketmaster is changing tactics to sell the remaining 170,000 seats for the artist’s 52 shows. The company, hoping to avoid long fan wait times and site crushing web traffic from bots and Swifties, is going back to an older technology: The 20-year-old Ticketstoday platform, modeled after The Grateful Dead’s own fan club system and still used by jam bands like Phish and Ween. The system has been updated in recent years and even deployed for artists like Ed Sheeran and Madonna, although it’s never handled 170,000 tickets for a single sale.
The move, coupled with Ticketmaster’s agreement to not participate in secondary ticket sales for the Eras tour, shows how eager ticketing companies are to work with a mega earner like Swift while avoiding the crush of traffic that disastrously caused widespread disruptions to her Nov. 15 presale. The record-breaking sale is now the subject of multiple congressional inquires around the Live Nation-owned company. These include a request from Sen. Amy Klobuchar (D-Minn.) to Attorney General Merrick Garland to investigate the crash and a call from her counterpart on the Senate Judiciary Subcommittee on Competition Policy, Antitrust and Consumer Rights, Sen. Mike Lee (R-Utah), to hold a hearing on the “lack of competition in ticketing markets.”
The decision to use Ticketstoday — originally built for Dave Mathews Band’s fanclub platform MusicToday by manager and Red Light Management founder Coran Capshaw in the early 2000s and sold to Live Nation in 2008 — would significantly reduce fan wait times and the potential for another site crash by gating off the most vulnerable parts of the ticketing platform to uninvited fans and bot attacks thought to be responsible for the disruption issues. Instead of making fans queue up again to order their tickets, this will essentially assign tickets to them based on their preferences.
Despite receiving an unprecedented level of negative publicity, Billboard estimates Swift’s Nov. 15 presale generated approximately $554 million in sales for Ticketmaster (which ticketed 47 dates on the Eras tour) and Seat Geek (which ticketed five dates as the primary ticketing company for the Arizona Cardinals and Dallas Cowboys).
The 170,000 remaining tickets not sold during the presale have a cumulative face value worth $37 million, Billboard estimates. Once Swift completes the sale of her remaining tickets for the Eras Tour, Billboard estimates that she will have generated $591 million in the U.S. alone. Based on projection, Taylor would easily capture the title of Billboard Boxscore’s highest-grossing female touring artist of all time, topping the current title holder Madonna who’s Sticky & Sweet Tour (2008-09) currently holds the No. 1 slot grossing $407 million, and the number four slot on the all-times tour chart, currently topped by Ed Sheeran, whose Divide tour from 2017-2019 grossed $776.2 million.
Typically, Ticketstoday helps artists sell a small portion of their available tickets – usually about 8% per show — directly to their most loyal fans, much like a lottery system. Fans receive an email about a limited number of VIP or high demand tickets available for sale for an upcoming show, and then those who want to buy the tickets select a pricing option and provide their credit card information in advance. If there are more fans wanting tickets than tickets available, a digital lottery is held and the fans selected have their credit cards automatically charged.
While Ticketmaster stayed online during the attack and sold a record 2.2 million tickets in 12 hours, the site could barely handle the traffic created by 14 million fans and billions of bots the company claimed hit the site. This system using Ticketstoday will pace out the sales, and they will be processed away from the public, avoiding any similar potential issues. To determine which fans would get to participate in the upcoming sale, Ticketmaster used its Verified Fan platform . Fans who bought tickets to the 2020 Lover Festival, canceled due to the COVID-19 pandemic, have been prioritized, as well as those who bought select Taylor Swift merchandise, like a “F— the Patriachy” keychain that went on sale in August. Participating fans will be sent an email requesting their credit card number and choice of tour seating options representing various price ranges and seat locations. Ticketmaster will then work to match fans with their purchase request and charge their card on file. The entire process will take about four weeks and is expected to be completed by Dec. 23.
As 2022 comes to a close, the music business can look back on another hectic year: turnover at the top levels of several big companies; record-breaking successes in several sectors of the industry; and some major headlines coming from sometimes unexpected places, all of which captured the attention of the music business over the past nearly 12 months. Here are 10 big stories and trends that helped define the year in the industry.
The Executive Turntable
The end of the year is always time for turnover, and the final stretch of 2022 has seen more of that than usual. The biggest story of all, however, is a change atop the Warner Music Group, with Stephen Cooper exiting after a successful 11-year run that saw the major double its revenue and boost its market share while taking the company public once again. He’ll be replaced by YouTube’s Robert Kyncl in February, in a move that has been widely seen as a nod toward the tech-based present and future of the music biz, particularly at WMG. Though changes atop the major groups are relatively rare, that was far from the only transition this year: Def Jam, Island and Capitol all welcomed new chairmen/CEOs, with Tunji Balogun, the duo of Justin Eshak and Imran Majid and Michelle Jubelirer taking over the trio of UMG companies, respectively. John Esposito also is transitioning into a new chairman emeritus role at Warner Music Nashville, handing the day-to-day reins to his longtime heirs apparent Ben Kline and Cris Lacy, who will take over in January. Warner also integrated 300 Entertainment into the 300 Elektra Entertainment Group, with Kevin Liles in charge, then placed it under the umbrella of the newly-formed Atlantic Music Group, with Julie Greenwald at the helm. And just recently, Motown chairman/CEO Ethiopia Habtemariam surprised many in the industry by announcing her intention to step down, at a time when the label is in its best shape in years, with a successor yet to be named. The C-Suites have been spinning much more than usual this year.
The Ticketmaster-Taylor Swift Meltdown
Cross Taylor Swift, and her fans, at your peril. The biggest artist in the world, whose latest album Midnights easily cleared the biggest streaming week globally of 2022, had set a presale for her first tour in five years, with tickets slated to become available on Nov. 15 through Ticketmaster. But the company badly, and somewhat inexplicably, misjudged the level of demand that existed for Swift’s tour. Long wait times, astronomical prices and service outages tanked the pre-sale, with billions of bots, according to the company, flooding the site and resulting in 3.5 billion requests to access it — four times the previous high water mark. That resulted in millions of frustrated, ticket-less fans. Which would have been bad enough, if it didn’t spark a firestorm that has yet to abate and is showing no signs of doing so. (As Billboard’s Glenn Peoples wrote, “Ticketmaster is one of the few non-partisan issues in America in 2022.”) There is now a Justice Department investigation into whether Live Nation has abused its market share in the live business (which was said to pre-date the Taylor tour, though it came to light in the wake of the problem) and a Senate antitrust panel hearing on the docket, as well as several state-level probes, and a lawsuit from more than two dozen fans accusing the company of fraud and “anticompetitive conduct.” It’s unclear if changes are on the horizon, but it has proven a headache of massive proportions.
Top-Level Touring Success
The headlines have never been rosier: Live Nation and Ticketmaster reported record-breaking quarters. Bad Bunny’s World’s Hottest Tour became the first ever to average a $10 million gross per show. Elton John’s Farewell Yellow Brick Road Tour closed in on the record for highest-grossing tour of all time. In short, it was a great year to be in the live music business — if you’re one of the biggest artists or promoters in the world. For a lot of others, the outlook was much less rosy: a “nightmare” of supply chain issues, COVID-related cancellations and postponements, rising costs and routing difficulties all combined to make it much more difficult for a lot of artists to get back out on the road this year. It is, and will continue to be, a process to get back to normal.
Synchs On Fire
A well-placed synch has always been a big revenue driver, particularly for legacy acts, but this past year the combination of prestige television and the TikTok algorithm combined to super-charge some of the biggest synchs to not just big bucks, but new chart highs, too. This past year, the biggest story on this front was Kate Bush’s 1985 track “Running Up That Hill,” which received a high-profile synch in Stranger Things and simply took off, surging into the top five of the Hot 100, becoming the oldest song to reach No. 1 on the Streaming Songs chart and returning to the top 10 of the Alternative Airplay chart after a record 28-year absence, while doubling its label revenue in the first two weeks after the series aired. And that wasn’t even the only Stranger Things-related synch to blow up: Metallica’s “Master of Puppets” ballooned 400% in streams in the days after its synch in the season finale. Songs featured in Euphoria, The Batman and Thor exploded in value, while the RIAA’s midyear report saw synch revenue growing faster than ever. Most recently, The Cramps’ “Goo Goo Muck,” with a placement in Netflix’s Wednesday, saw its revenue grow more than 8,000% in a single week.
Ebbs and Flows of Catalog Market
The red-hot catalog market has been the talk of the business for almost half a decade at this point, but over the past year things started to change in some unexpected ways due to rising interest rates, the dwindling number of truly elite catalogs available and the faltering of some of the sector’s most prominent players. And still there were big wins, including Sting’s deal with UMPG that Billboard estimated could be worth well north of $300 million, Stephen Stills’ sale of a controlling interest in over 1,000 songs to Irving Azoff’s Iconic Artists Group and UMG’s purchase of Frank Zappa’s catalog in the region of $30 million. Meanwhile, Brookfield dropped $2 billion into Primary Wave, which promptly acquired the catalogs of Joey Ramone ($10 million) and Huey Lewis & the News ($20 million). Concord swung a package deal for the Genesis catalog as well as those of its individual members for somewhere around $350 million, and new players like Litmus Music came into the market with $500 million to spread around (some of which just went towards Keith Urban’s master recordings). So despite a “challenging environment” and an end to the catalog “feeding frenzy,” there’s still a lot of juice left in those old songs (and a big Pink Floyd-sized catalog potentially in the offing).
The Rush Toward Services
While one sector of the business is running with arms wide open toward catalog ownership, another sector is running just as firmly in the opposite direction: toward services, or partnering with artists and labels to provide a backbone of support to help them achieve their goals without giving up ownership through distribution, marketing, publicity, promotions, royalty claiming and other services. The independent distribution space has generally been a viable business model for decades, but the rush into services ramped up in the past year. Companies like SoundCloud, TikTok, Tencent and Downtown embraced the shift with realigned business models, joining relatively new entrants to the space like UnitedMasters, Stem and Utopia. Many of the major labels (Interscope, Republic, 300) also launched their own distro subsidiaries in an attempt to grow their market share in an increasingly indie world. For some, however, the shift was less of a slam dunk than they may have envisioned, with a tough business model that relies on scale colliding with the increasingly-murky corners of the digital music industry –resulting in fraud, financial challenges and lukewarm responses from the market.
The Onset of Crypto Winter
Early in the year, Web3 projects exploded in what seemed like every sector of the music business, including all three major labels along with companies like Spotify, Coachella, Ticketmaster, Gibson, the Grammys and Death Row Records — not to mention artists like Snoop Dogg, Steve Aoki, Pharrell and Keith Richards. Universal launched an NFT band, Warner partnered with a slew of web3 companies, Snoop promised to buy Death Row and make it into an NFT record label; the possibilities seemed endless. But the seas proved to be much choppier than many had expected, and a series of selloffs and financial failures (as well as recession and inflation fears) brought in what many called the Crypto Winter, with sales and enthusiasm beginning to ebb as the year went on. By the time the second-biggest crypto exchange, FTX, spectacularly failed in November, there had been a 70%-80% cool-off in the market, to the point where the once-ubiquitous format seemed ready for another hibernation while the industry tries to figure out how best to take advantage of the new-ish technology. Expect the ebbs and flows to continue until we’re all in an acronym haze.
BTS Break Rattles Biz — And HYBE Stock
By just about any metric, BTS has been one of the biggest and most formidable acts of any genre in the past several years, racking up No. 1 hits, big-name collaborations, massive box office grosses and accounting for nearly one-third of the entire K-pop market in the U.S. since 2021, according to Luminate. So the group’s decision to take some time off for solo projects was a blow to the group’s management company, label and agency HYBE, which saw its stock, already down 45% for the year at that point, sink 27% in the week after the announcement. (Shares recovered a bit after closing at 145,000 won following the announcement, hitting a low of 107,000 on Oct. 13 and rebounding to 157,000 as of Dec. 12.) With the group members facing the prospect of mandatory service in the South Korean military, HYBE is facing an uncertain outlook for 2023, despite third-quarter growth and the possibility of positive returns from BTS members’ solo projects. For K-pop fans, however, there is room for other companies to step in: JYP Entertainment has had chart success with TWICE and Stray Kids multiple times this year, SM Entertainment’s BLACKPINK scored a No. 1 album in October and Big Hit Entertainment has generated success with Tomorrow X Together. While there’s plenty of opportunity in the K-pop market, the road ahead is uncertain for HYBE, a company that not too long again was a slam dunk.
Despite Complications, the Business is Thriving
It’s been a complicated year for the business overall, as the return from COVID has been trickier than expected, breaking new artists has become harder than ever and overarching financial issues like inflation and the possibility of a recession have cooled what had been a white-hot market. But despite those challenges, the music business has been growing on almost all fronts for another year. The touring business has already been covered here, but the U.S. recorded music business also saw on-demand audio streams surpass 1 trillion for the first time ever — representing a 611% increase from 2015, according to Luminate. Despite supply chain issues that continue to bedevil labels and manufacturers, vinyl sales passed $1 billion in revenue for the first time since the mid-1980s. At the midyear mark, they were up more than 22% — well before Taylor Swift’s Midnights set the record for largest vinyl sales week since Luminate began tracking data in 1991. Overall consumption is up another 9.2% year over year so far in 2022, with no signs of slowing down and with record companies increasing their guidance for investors in 2023. Amid cutbacks and hiring freezes in tech and media, the music business stil appears to be on strong footing.
It’s Still a TikTok World
Love it, hate it, rue its influence or spend hours scrolling it, the industry was as obsessed with TikTok in 2022 as it’s ever been, and the ByteDance-owned social streaming behemoth has leaned further than ever into its connections to the music biz — for better or worse, depending on whom you ask. The service has been behind the massive success of hits both old (Kate Bush’s “Running Up that Hill,” Frank Ocean’s “Lost”) and new (Lizzo’s “About Damn Time,” Bebe Rexha and David Guetta’s “I’m Good”) while helping break new artists like Em Beihold and Cafuné. But the labels’ love affair with TikTok has, over the past year, cooled down, as breaking a hit has become more complicated and the marketing pluses that it offered have fizzled. A distribution play from the platform called SoundOn was met with a lukewarm response, while a ByteDance streaming service, Resso, has rolled out in select markets, with rumors that it could come to the U.S. soon — if TikTok can ease the concerns of U.S. officials. And that comes as the frustration over low payouts and song leaks have some executives warning of a repeat of the early days of MTV and YouTube, when music content was regularly used to promote a fledgling service without commensurate compensation. Still, the biggest song on the platform in 2022 — a nine-year-old track from Swedish sad boy Yung Lean — grew its stream count by over 1,000%, and TikTok is still the single biggest proving ground for singles in the current digital climate. What to make of TikTok in 2022? How about…everything?
Music companies’ quarterly results in October and November were a bright spot amid a mostly bleak earnings season. High inflation, rising interest rates and the chance of a recession presented a triple-whammy to most sectors — particularly tech and retail — but in the music industry, those macroeconomic threats weren’t enough to dampen consumer demand and investors’ confidence.
“While the broader economy is facing challenges, the music industry as a whole remains healthy,” says Golnar Khosrowshahi, founder and CEO of Reservoir Media, which raised its full-fiscal-year forecast by 11% for both revenue and adjusted earnings before interest, tax, depreciation and amortization (EBITDA).
So what worked in music companies’ favor? In short, more people are going to concerts and buying streaming subscriptions, and revenues from those sectors helped bolster quarterly results for nearly every publicly listed music company.
Diversifiction = Fortification
The major labels, which have a piece of the market in nearly every segment of the music industry, all reported quarterly revenue gains over the third quarter last year, ranging from 16% at Warner Music Group to 6% at Sony Music Entertainment. On Universal Music Group’s third-quarter call, chairman/CEO Lucian Grainge attributed the company’s 13.3% third-quarter revenue gains to UMG’s diversification strategy. While ad-supported streaming revenue slowed significantly, only growing 5.2% (from last year’s 15.6% growth), licensing and other revenues rose by 30% due to an $84.2 million increase in touring revenue from Latin American, European and Asian markets where UMG is in that business. Merchandising and other revenue related to those tours grew by over 100% to almost $199 million. “We are better positioned to navigate the inevitable ebbs and flows of revenue of any particular business, as well as to weather any macroeconomic headwinds,” said Grainge.
Live’s Alive Again
Live Nation Entertainment had its biggest summer concert season ever, reporting that more than 44 million fans attended 11,000 events in the third quarter, as attendance for stadium shows tripled to nearly 9 million. Companywide, Live Nation reported $6.2 billion in quarterly revenue, up nearly 67% from the last-comparable quarter, which for it was the third quarter of 2019.
Streaming’s Still Strong
On a call with investors, an analyst asked Sony deputy president/CFO Hiroki Totoki what risks Sony Music Entertainment faces. His reply: “Streaming is very successful, and we don’t really have that much of a concern.” Spotify’s third-quarter results confirm that. Revenue rose 12% to roughly $3.2 billion at a constant currency, on a 13% uptick in subscription revenue from more than 195 million subscribers — 1 million more than the company targeted.
French streaming company Deezer also reported double-digit revenue growth, although it attributed the increase in part to a one-euro price hike the company instituted in France earlier this year. Deezer’s revenues rose nearly 14% to $112.5 million at the Sept. 30, 2022, exchange rate.
Price hikes, coming at a time consumers’ costs are rising across the spectrum, are the final thing working for music industry companies. After Apple said it would raise its standard individual streaming plan price by $1 to $10.99 in the U.S. and Spotify signaled it was also considering a price increase, major labels and other streaming company executives all said they expect trickle-down benefits.
It’s also worth noting that although Totoki said on the call that Sony is “taking steps to prepare for further deterioration… in each of our businesses,” the company raised its revenue and operating income targets for the full fiscal year by $9.8 billion and $1.9 billion, respectively (at Sony’s assumed exchange rate for the second half of the fiscal year).
This story is part of Billboard‘s The Year in Touring package — read more stories about the top acts, tours and venues of 2022 here.
The touring industry’s comeback from the pandemic brought record revenues and ticket sales for the world’s largest promoter, Live Nation, No. 1 on Billboard’s year-end Top Promoters ranking.
Driven by mega tours by Bad Bunny (who had the highest grossing tour of the year), the Red Hot Chili Peppers and The Weeknd, Live Nation grossed $4.19 billion and sold 42.3 million tickets from 4,789 in the 2022 tracking period, according to figures reported to Billboard Boxscore covering a Nov. 1, 2021 – Oct. 31, 2022, collection period.
Live Nation’s reported gross was more than the combined $3.9 billion reported by the promoters ranked from Nos. 2-10.
While Live Nation benefitted from strong demand for arena shows, Cowen and Company analyst Stephen Glagola says Live Nation’s global distribution scale, customizable platform for event managers and its ability to finance artists add to their competitive edge.
“The $9 billion in artists’ fees paid this year is one of their biggest advantages,” Glagola tells Billboard, referencing money Live Nation collects through ticketing and other business areas that it returns to the artist.
As a promoter, Live Nation also gives artists financial guarantees as much as 10 months in advance of events. While that makes Live Nation vulnerable to sharp declines in attendance due to sudden events like a COVID-19 outbreak, it is also a persuasive tool to lock in the biggest artists’ tours.
Live Nation had three of the top 10-highest grossing tours of 2022: Bad Bunny was No. 1, grossing $373.5 million; Red Hot Chili Peppers were No. 6, grossing $177 million; and The Weeknd was No. 10, with $131.1 million.
While promotion is considered a low-margin business for Live Nation, Glagola says, it “drives the flywheel” of the company’s overall economics.
“By getting more artists to promote and tour, it drives some of their higher margin, ancillary revenue, such as food and beverage and hospitality within their owned and operated venues, and the expansion of ticketing,” says Glagola.
On the company’s most recent earnings call, Live Nation executives said the busy 2023 touring season is fueling high demand for live music, despite ongoing questions about the potential impact high inflation and tighter consumer budgets may have on ticket sales.
So far, the company is seeing surging demand.
“Ticket sales for shows in 2023 are pacing even stronger than they were heading into 2022, up double-digits year-over-year, excluding sales from rescheduled shows,” said Rapino. Through the third quarter, Ticketmaster sold over 115 million tickets, up 37% from the same period in 2019. (Live Nation uses 2019 as the most recent year comparable to just its current business.)
Contrary to many industries, supply fuels demand, analysts at Cowen said.
“It has to do with the fact that Taylor Swift only comes on tour every few years,” Glagola says. “When she comes through your hometown you want to see her.”
However, popularity has its pitfalls. Live Nation faces lawsuits and a U.S. Senate hearing next year related to the Nov. 15 Ticketmaster pre-sale for Swift’s 2023 Eras Tour, which saw widespread service delays and website crashes as hundreds of thousands of fans tried — and many failed — to buy tickets.
More than a year into litigation over the deadly Astroworld music festival, attorneys for the event’s organizers say that nearly 1,000 fans who sued over their alleged injuries have ignored deadlines and failed to hand over “critical evidence.”
In a filing last week, attorneys for the defendants in the case — Live Nation, Travis Scott, Apple and many others involved in the festival — alerted Judge Kristen Brauchle Hawkins that 956 alleged victims had “not provided any response whatsoever” to basic requests for information.
“There is no excuse for the non-responsive plaintiffs’ complete disregard of their discovery obligations,” the lawyers for the organizers wrote in the Nov. 23 filing. “They should be compelled to comply immediately.”
Some lawyers for victims quickly pushed back, though. In responses on Monday (Nov. 28), attorneys repping dozens of purported non-responders said many of their clients had in fact filed the necessary papers — or had been dropped from the case entirely. Others said their clients had “experienced serious trauma” and that lawyers were “working diligently with them to complete their discovery response.”
The dueling filings came in sprawling litigation over Astroworld, in which a crowd crush during Scott’s Nov. 5, 2021 performance left 10 dead and hundreds physically injured. Thousands of alleged victims are seeking billions in total damages, claiming the organizers were legally negligent in how they planned and conducted the event.
As of May, court filings said that more than 4,900 alleged victims had filed claims in the case. But the latest filings this week suggest that number has now been winnowed down to around 2,500.
The two sides are currently in the midst of what is known as discovery, the legal process in which each side hands over evidence to their opponents. Earlier this year, Live Nation, Scott and other defendants had sought a variety of information about each plaintiff, including details about their particular injury, documentary evidence that they attended the festival and any messages or other digital records related to the festival.
In the filing last week, attorneys for the Astroworld organizers said a huge number of alleged victims had “wholly failed to respond,” despite the fact that the questions had been heavily negotiated with the legal team for the concertgoers.
“It has now been more than six months since defendants served their original discovery requests and more than a month since all extensions have expired,” the Astroworld lawyers wrote. “Yet approximately 38% of the Plaintiffs … have provided absolutely zero response.”
Failing to hand over this “critical evidence” soon could hamper the litigation in ways that cannot be undone, the organizers warned.
“The longer the non-responsive plaintiffs delay, the higher the risk that critical evidence or information in their possession will be lost, destroyed, or forgotten,” they wrote. “Cell phones get lost or destroyed, and the photographs and videos on them get deleted.”