Last week both the House and Senate committees grilled panelists including Ticketmaster CEO Irving Azoff and Live Nation CEO Michael Rapino about the impending merger. Bill Wyman (@hitsville), myself (@ticketbiscuit) and a handful of others covered the events via twitter. You can check out the live stream here and here.
The Senate session was brutal. Seth Hurwitz of IMP Productions and Jerry Mickleson of JAM laid into the behemoth companies like cold assassins, and both Azoff and Rapino stayed on the defensive most of the time. The overwhelming feeling coming out of this session was that the merger would be very bad for independent promoters.
My favorite part of this session was when one audience member said to a panelist (probably Hurwitz) – ‘Dude, you were under oath!” After the cameras had quit rolling but the mics were still on. One telling moment was when Mickelson approached Azoff after the hearings in a sort of détente manner, assuming him that the testimony was not a personal attack. It is clear where the power is currently, and the consequences of upsetting the forces that be (see Pearl Jam).
Then came the House session, and it looked like Rapino had taken a crash course from Dale Carnegie. He was much more polished and convincing, helped somewhat by the undereducated committee and their softball inquiries. Robert W. Doyle, a partner with Doyle, Barlow & Mazard in DC had some excellent sound bytes, but despite his eloquent words and pointed delivery, I came out of this session pretty convinced that the merger will pass muster and Live Nation Entertainment will be born.
- Ticketmaster will jettison TicketsNow. I think they will have to for approval. And I think Azoff is cool with the idea. Joe Lewi (@eventpromoter) posted to his blog that he expects this as well.
- Live Nation Entertainment will try to do some cool things with the “Amazon” storefront concept- that you can buy tickets, songs, merchandise, etc. through one portal. Rapino mentioned this in his testimony. This will be convenient, but customers should also expect to pay for this convenience. Charging for convenience is how these guys make money. Since this whole move is about control, LNE will try to build / buy a competitor in the music distribution space. They will not even approach Apple’s market share because the interface will suck.
- Rapino seemed to gain some support in the house hearing when he said that the new company would hire people, instead of laying folks off. The committee didn’t ask him if the new jobs would be American jobs. In fact, a source of mine, a former Ticketmaster employee, shared that Rapino’s claim was unequivocally false. According to the source, Ticketmaster has been outsourcing both development and QA activities to their Shenzen office, which opened in January of 2008 – and the new development jobs will likely be in China instead of the US, since the Chinese only demand about 30% of the salary of their US counterpart.
- The market will striate – with LNE owning the “top end” arenas and amphitheatres, and the middle market pursued aggressively by viable ticketing competitors such as ourselves. LNE will soon look to expand its footprint in the middle market as growth on the top end stagnates, and fears will resurface regarding their abuse of leverage.
- Ticket prices will not come down. This merger never was about what is good for the fans. It is about control and profit, plain and simple. Convenience fees will probably go away, but ticket prices will increase to compensate for the lost revenue.
A question I get often is: what does this mean for us (TicketBiscuit)? From a business perspective, the news of this merger has had positive effects. Venues and promoters are looking for options. They see that this much centralization of power is not good for the overall ecosystem. With our Music Liberation Fund, we’re removing the risk of switching away from Ticketmaster. And, we’re the only ticketing company continuing to invest, daily, in tools that help our clients sell more tickets. It’s always been our position to compete well, execute flawlessly, and do the right thing for our clients. And we’ll do that, merger or not.
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March 3, 2009 at 8:21 pm
mkp
AIG, GM, CITI, WALMART, CHASE where are the Anti trust folks? These huge corporations drive out all the smaller businesses then they are deemed to big to fail. Then the great Socialist States of America can bail them out. I can see it now, the great LNE bail out fund payed for by all the smal businesses that they set out to destroy. What next, China will force LNE to book all Chinese acts since they will own most of the USA anyway.