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Live Nation says “pent-up demand for live events” creates great opportunities as COVID rules lift

By | Published on Wednesday 4 August 2021

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While COVID regulations are still fluctuating around the world and international travel restrictions remain in force – leading to more gig and festival cancellations in some markets – the live entertainment revival is now definitely underway. I mean, we knew that already, but Live Nation put some stats to that revival yesterday with its latest quarterly financial report, with the live music giant reporting 677% year-on-year revenue growth and talking up the opportunity that has been created by the “pent-up demand for live events”.

“As communities reopen”, Live nation boss Michael Rapino told his investors, “we’re seeing the pent-up demand for live events play out as artists and fans are eager to re-connect in person. In the US and the UK, we are seeing strong ticket sales and the restart of our concerts and festivals, highlighted over the past weekends by Lollapalooza and Rolling Loud in the US and Latitude in the UK hosting a combined three quarters of a million fans. With vaccine rollouts increasing throughout Canada and Europe, we expect additional markets to open more broadly in the coming months”.

Of course, the 677% revenue boost in Q2 this year follows a 98% decline in the live giant’s revenues in the same quarter in 2020 – ie the quarter when the COVID shutdown really hit – and in that context, Live Nation’s revenues are still being significantly hit by COVID. But then, throughout much of quarter two in much of the world, COVID regulations were still in place that limited either all shows or certainly full capacity shows. But that has obviously started to change in a number of markets.

And, Rapino added, now the revival is underway, things are rebuilding faster than anticipated, especially around ticket sales for shows taking place later this year. “The momentum for the return to live events has been building every month, with ticket sales and concert attendance pacing faster than expected, underscoring the strength and resiliency of the concert business and live events in general”, he went on.

“This progress, combined with our cost discipline, has enabled us to deliver positive adjusted operating income for the second quarter, well ahead of where we thought we would for this quarter. We expect to see further ramp-up accelerate through the rest of the year, with improving operating income and all segments returning to adjusted operating income profitability for the second half of the year, setting us up for a full-scale 2022”.

Using recent ticket sales stats as a justification for that optimism, Rapino added: “As we put more shows on-sale this year and next, ticket sales are the best early indicator for concerts and our overall business. To that end, June was Ticketmaster North America’s fourth best month in history for transacted ticket volume driven in part by our US concerts division putting the highest number of shows on sale ever during a single month – 50% more than the next highest month back in March 2019”.

“In concerts, our recovery this summer continues to be led by outdoor events at our festivals and amphitheaters”, he continued. “We expect to have over six million fans attend our festivals during the second half of the year, with about two-thirds of our festivals increasing their attendance compared to 2019. Most of our festivals sold out in record time while average ticket prices have been 10% higher than 2019. While still early, we have delivered a strong double digit increase in average per fan revenue and in on-site spending versus 2019 at our amphitheater shows over the past few weeks”.

And looking ahead, he went on: “Looking forward to 2022 and now also 2023, all our leading indicators continue to point to a roaring era for concerts and other live events. Starting with our concerts division, every major venue type – arenas, amphitheaters, and stadiums – have pipelines indicating double digit growth in show count and ticket sales relative to 2019 levels. In some cases our pipeline is so strong we are extending our planning into 2023 and even beginning to discuss tours that extend into 2024”.

Concluding with some nitty gritty about why Live Nation in particular is well place to capitalise on the post-COVID revival, he added: “As our revenue is rebounding, we continue to evolve our business to maximise opportunities from the global recovery and strengthen our flywheel. We have structurally reduced our cost basis by $200 million, making us more nimble and converting more of our revenue to operating income and adjusted operating income”.

“We have integrated our Ticketmaster team globally, enabling us to work toward a global product roadmap that will both reduce our costs and increase our flexibility and speed to deploy new client tools and improve our marketplace experience. Lastly, we continue to build our direct-to-consumer businesses, with initiatives ranging from streaming concerts to NFTs to artist merchandise, bringing more value to artists and deepening fan relationships”.

“These enhancements”, he concluded, “combined with the strongest supply and demand dynamics our industry has ever seen, are fuelling our core flywheel strategy and setting us up for multiple years of growth in attendance, revenue, operating income and adjusted operating income”.



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