As the recession seeps into all sectors of the U.S. economy, some are starting to predict a downturn in the live entertainment industry. With such expectations, Ticketmaster CEO Sean Moriarty is hinting at lower ticket prices over the next year. “You would expect there to be some adjustment of pricing for an economy where people have less money in their pocket,” Moriarty shared with Adam Satariano of Bloomberg. “The conditions that I would expect in 2009 are going to feel like the conditions in the back half of 2008.”
Ticketmaster is not the only one noticing the trend. Major promoters like Anschutz Corp-owned AEG Live and Live Nation are voicing the same concerns. “At some point, this rampant unemployment is going to hit the concert industry,” Anschutz chief executive Randy Phillips told the Wall Street Journal. With such gloomy statements, analysts are getting the message and lowering expectations for the stock market. In Wednesday trading, Live Nation (LYV) dropped 4.08 percent to $5.41 while Ticketmaster (TKTM) shed 1.84 percent to $6.93.
Despite the recession, 2008 figures show revenue gains in the live entertainment industry. Pollstar reported North American receipts for 2008 at $4.2 billion, an increase of 7.8 percent over 2007. The revenue growth was not due to increased unit sales, though. Instead, the growth came from higher ticket prices. The declining unit sales act as a potential indicator of slowing demand in 2009.
While lower ticket prices may be necessary, analysts do not see prices dropping across the board. Live Nation chief executive Michael Rapino told the Wall Street Journal, “I’m not sure the net ticket price will change, but bands are making sure they have more tickets in their inventory priced lower,” indicating a new look at tier ticket pricing to meet the current demand.
No one would debate the move to lower ticket prices during a recession, but the live entertainment industry must do more to weather this unprecedented storm. Without greater efficiency and cost savings, lower prices may not be enough to offset declining demand. ArtistForce can protect the industry through the downpour. The web-based business solutions and innovative marketplace save time and reduce friction in the booking process. Venues, promoters, and buyers can easily connect with managers and artists. Offers, negotiations, and contracts are tracked in one place for simple settlement. The streamlined process can clearly save time and reduce costs, making the same old revenue increase net profit. Under the umbrella of ArtistForce, the live entertainment will soon see clearer skies ahead.
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