Is it time for Live Nation to Die?
It's High Time for artists to have a fair partnership in their live touring business...
Carl Hitchborn
September 09, 2023
When I was planning out the different posts for The Baker Say’s, one that I knew would create compelling reading was a discussion about the massive levels of exploitation by promoters, venues, and ticketing companies in the live music segment of the music business.
Some would say that the words 'promoters, venues and ticketing companies' could easily just be replaced with two words: Live Nation.
However, the truth is that this exploitation goes far beyond Live Nation as the biggest live music promoter in the world and is prevalent at all levels of the live music business.
I brought writing and publishing this post forward, to jump onto the bandwagon of noise created recently by The Senate Judiciary Committee hearing - the first of many that will be investigating the dark side of the live music business - which was brought about by a catalog of issues and problems seen with the recent sale of tickets to superstar Taylor Swift's Eras Tour.
Clyde Lawrence Reveals the Truth
The primary focus might have been on the Swift Eras Tour issues, but the sobering reality of just how exploitative Live Nation (and the wider live music business) is for artists came via the words of the only artist witness called to take questions from the Senate; Clyde Lawrence.
In his testimony (which you can see here), Lawrence spoke about the conflict of interest created by Live Nation being the venue owner, live promoter and ticketing company in one, and how costs could be and are inflated drastically as a mechanism to reduce the profits generated from the show itself.
The sentiment is that Live music is a fair partnership between the live music business and artists, however, Lawrence pointed out this is just not the reality:
"Since both our pay and theirs is a share of the show's profits, we should be true partners aligned in our incentives: keep costs low while ensuring the best fan experience.
But with Live Nation acting not only as the promoter but also as the owner and/or operator of the venue, it seriously complicates these incentives."
And he touched on some of the inflated costs charged by Live Nation:
"At the end of the show, costs will have eaten into most of the money made that evening and due to Live Nation's control across the industry, we have practically no leverage in negotiating. If they want to take 10 percent of the revenues and call it a 'facility fee,' they can—and have."
If they want to charge $30,000 for the 'house nut' [operating costs of a theater] they can—and have.
And if they want to charge us $250 for a stack of 10 clean towels, they can—and have.
Once these costs, some of which went to Live Nation's subsidiaries, are taken into account, the remainder is split between Live Nation and the band.
In a world where the promoter and the venue are not affiliated with each other, we can trust that the promoter can look to get the best deal from the venue."
However, in this case, the promoter and the venue are part of the same corporate entity so these line items are essentially Live Nation negotiating to pay itself. Does that seem fair?”
To add further to the next level of exploitation being exerted, Lawrence highlighted how Live Nation also profits at an excessive level via their wholly owned subsidiary Ticketmaster:
"The tickets were listed at $30 and our pay ended up shaking out to about $12 of each ticket. But in this hypothetical show, the fan did not pay $30 for that ticket.
The fan paid $42 because Ticketmaster tacked on a 40 percent fee and for the record, we've had them go as high as 82 percent."
For many independent live promoters out there, they'll be breathing a sigh of relief that Live Nation is taking all of the heat in this debate, but the unfortunate truth is that they are just as exploitative.
The Indie Promoters are ‘At It Too’
Back in 2015, I remember having a dinner meeting with a representative of one of the biggest independent live promoters in the UK - I was working with UK alt-rock artist Coasts at the time in the capacity of their manager.
At this meeting, I was told some secrets of the live music business and how this particular promoter received lofty ticket booking fees for every ticket sold, at a level so great, that even if a show lost money on paper (meaning the artist gets paid no profits), they as the promoter will still make a healthy profit.
The ticketing fees they received were so lucrative, that the fees themselves, covered the cost of the expensive London-based office, and the entire staff salaries and still left room for additional profits on top.
I went away from this meeting in utter disbelief and shock at what I heard, to the degree that I wanted to find a pathway towards removing the live promoter from the equation altogether by hiring the venues and taking control of ticketing ourselves so that we could redirect the money back into growing our artist's businesses, rather than lining the pockets of promoters.
There was always an argument, that the ticketing company's fees were justifiable due to the cost of developing the technology and associated ongoing running costs, however, having had this meeting, I knew differently.
By 2017, I had made the bold move to become the live promoter, taking control of both Coasts and alt rock band The Hunna's live shows.
Selling Tickets via Shopify
Through some genius systems architecture design and software engineering by my High Time CTO Brandon Stonebridge, in just a few months we had developed our own ticketing platform that had all of the same features the legacy ticketing platforms had, only we built this with a single team member and the robust foundation of Shopify to process the transactions themselves.
This Shopify-driven ticketing system allowed us to generate fees of more than $70,000 - fees we would otherwise never have seen.
These fees more than covered the marketing costs associated with selling the tour itself - costs traditionally taken out of the show costs, reducing the overall profitability of the show.
Furthermore, by taking control of running the shows, we were not subjected to the same inflated and imaginary costs that Clyde Lawrence discussed.
It's difficult for me to put into words just how huge it is to be in a situation where instead of the majority of the income that is coming in from every show, is going out again (to the promoter), rather, it's remaining in the artists business as a way to not only reward the artist with more income but even more so, to allow for considerably more reinvestment to happen.
This additional capital to invest allows for the possibility of unappreciated growth, growth that means the entire artist business becomes infinitely more stable, sustainable, and most importantly, creating a situation where longevity is a real possibility.
It's a topic for further posts, but, when you combine the removal of the promoter middlemen (and the associated gross commission-driven agents) along with doing the same across every income stream, the situation starts to look how it should - an amazing partnership between the artist and the entity charged with building their business for them.
It’s High Time for Change
The unfortunate reality is that the current situation makes it very difficult for artists to make touring viable and even with pioneering merchandise companies such as terrible* supporting their cause, it's hard to standby and simply do nothing when there is a full understanding of how it could be done differently.
There is a strong belief by people who work in the music business, that it isn't possible to create a pathway and navigate a way through toward great success as an artist, without having to get into bed with the traditional live music business players such as Live Nation.
I truly believe this is not the reality and through rebooting High Time, part of my vision is to build and create a network of independent venues on a global scale, that can provide a real alternative platform for artists.
These venues will not only allow for a truly fair partnership to be forged but through many of them being non-traditional music venues, also create new and exciting experiences that fans will embrace and love to be a part of.
There are already some pioneers in the experiential entertainment space such as Secret Cinema founder Fabien Riggall, starting to talk about tackling this issue head-on and I believe that through coming together, the independent creative community has the power to bring about the change that simply must come to fruition ahead.
Missed my first and most important article? here’s the link to it:
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