Live Nation hopes to sell higher-priced tickets

CEO Michael Rapino reportedly admits Live Nation is hoping to convince artists to charge more money for good concert seats, rather than letting scalpers take the difference.

Matt Rosoff
Matt Rosoff is an analyst with Directions on Microsoft, where he covers Microsoft's consumer products and corporate news. He's written about the technology industry since 1995, and reviewed the first Rio MP3 player for CNET.com in 1998. He is a member of the CNET Blog Network. Disclosure. You can follow Matt on Twitter @mattrosoff.
Matt Rosoff
3 min read

When I first heard about the proposed merger of music promoter and venue-owner Live Nation and ticket broker Ticketmaster, I predicted that ticket prices for big-name musical acts would rise. Now that the merger's completed and ticket revenues are down for the first part of 2010, Live Nation is admitting that it's hoping to charge higher prices for desirable concert seats.

Scalpers who purchased Roger Waters tickets through the fan club presale might have a hard time selling them. Roger Waters

The reason? Simple economics. As long as customers are willing to spend $500 or $1,000 on front-row seats, why sell those seats for $150 and let a scalper or broker make all that extra money? In the past, Ticketmaster tried to address this disparity by creating its own secondhand broker, TicketsNow, which would sell tickets at a markup. But as the Los Angeles Times reports, Live Nation Entertainment CEO Michael Rapino admitted during an earnings call on Monday that TicketsNow's business has declined in the wake of complaints from fans and scrutiny from lawmakers. So the company's dropping the pretense--no more fake secondhand tickets. Instead, it will try to convince artists to charge higher prices for tickets from the get-go. If Live Nation has its way, $400 for front row seats will become the new standard.

Clever music fans might think "no big deal, I'll just wait a few days before the show and buy a ticket from a fan on Craigslist." I've used that trick myself--there are always a few unfortunate ticketholders whose plans change. As show time approaches, sellers tend to get more desperate, which leads to some real bargains.

But the concert industry is exploring ways to close that loophole as well. This fall, Pink Floyd songwriter Roger Waters will be doing a 30th anniversary tour of Pink Floyd's "The Wall," complete with spectacular (and presumably expensive) production values--giant inflatable animals, projections, a massive wall built across the stage, and so on. To get the best seats, fans were encouraged to join the Roger Waters fan club--at least he didn't charge for the privilege like The Police and Rolling Stones--and then enter a drawing. Winners got the right to pay about $500 for one pair of seats on the floor. But here's the trick: winners must pick up their tickets at the venue on the night of the show, and must present a credit card and (perhaps) ID to get them. Good luck scalping those! (Waters isn't the first artist to do this: Nine Inch Nails and No Doubt, among others, have employed similar tactics in the past.)

A few old-timers who remember scoring $15 front row seats to the original Wall tour complained, but apparently Waters and Live Nation, which is promoting this tour, judged demand quite well. Ticket sales are so strong, they've just added another 12 dates.

As I've said before, if you object to high prices for big-name concerts, there are dozens of smaller acts and local bands who would love your presence at their shows. It might take a little more work to discover music from these acts that matches your taste, but you'll get the thrill of seeing young and hungry musicians giving it their all, and you won't have to sacrifice multiple paychecks to do it.