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Live Nation chief says live sector should rethink pricing

By | Published on Monday 14 March 2016

Live Nation

We’ve noted before that Live Nation sits in an interesting position with regard to the secondary ticketing debate. The company houses promoters and managers, at least some of which are privately down on rampant online ticket touting, but then the live giant’s Ticketmaster division has a significant secondary ticketing business and has become a key player in that market.

According to the Financial Times, Live Nation chief Michael Rapino has now said that he thinks there is no “simple answer” to the ticket resale debate, and “no right and wrong” in the different responses different promoters and managers have employed to the rise of the secondary ticketing market, ie those who try to restrict the resale of their tickets versus those who sell their own tickets on the resale platforms themselves.

But, says Rapino, the success of the secondary market possibly shows that the live sector hasn’t got the pricing of its shows right, in that promoters may be putting tickets on the market at too low a price. “We have to start pricing the house to match the market”, the Live Nation boss says. “[Because] we’re only scratching the surface of the opportunity for the artist”.

Though, of course, plenty of bigger name artists, while recognising that they could possibly hike up their ticket prices, don’t want to, either because they worry about alienating dedicated fans on a tight budget, or because they think it will just hit other revenue streams, or because they fear they might price themselves out of the market and play to half empty theatres or arenas. Or a combination of all three.

The solution, reckons Rapino, is more dynamic ticket pricing. Though, while he says the live sector could learn some things from the travel industry when it comes to pricing, he’s not necessarily suggesting the kind of dynamic pricing airlines use where tickets start cheap, then go up in price, but may then come down again at the last minute to sell off unsold spaces.

Some promoters did actually experiment with that method a few years back, but in music there is a PR challenge with last minute bargains, it basically being an admission by an artist that they haven’t managed to sell out all their seats. And, continues Rapino: “We want to make sure that the fan never gets penalised for buying early – we don’t want to start dropping prices along the way”.

The solution? Having many more pricing levels, Rapino reckons, maybe up to a dozen options with a price range that may stretch as far as $20-$4000. Because, he reckons, “catching the top end allows you to subsidise the bottom end”.

He’s probably right that the live sector, especially at the upper end of the market, should be adopting more sophisticated pricing methods. Though that’s unlikely to stop those opposed to secondary ticketing being ever more vocal about it, and the assistance Live Nation provides the touts.