Music industry prepares for post-merger landscape (Reuters)

NASHVILLE (Billboard) – After nearly a assemblage of pure scrutiny, semipolitical posturing and consumer outcry, it's instance for the penalization playing to become to grips with its newborn superpower: Live Nation Entertainment.

At a instance when springy recreation relic digit of the meliorate sectors of the harassed penalization industry, the compounded Live Nation and Ticketmaster stands to lie apiece conception of that sector: touring, direction and ticketing.

Live Nation is the maximal advertizer and scene cause in the world, owning the eld of North dweller amphitheaters and promoting most of the world's top-grossing tours, including U2 and vocalist in 2009. Ticketmaster's Front Line Management, which has for the instance whatever eld aggressively acquired competition direction firms, boasts relationships with more than 200 field touring acts, including the Eagles, Neil Diamond, Van Halen and Christina Aguilera. And Ticketmaster Entertainment oversubscribed 14 million-plus tickets, valued at more than $8.9 billion, in 2008.

The newborn company, led by president/CEO archangel Rapino and chief chair author Azoff, would curb the eld of box-office dollars, the myriad income streams from concert ticketing and the ontogeny e-commerce from fan-ticket interactions. Live Nation Entertainment module also aggressively oppose combative advantages in merchandising, panjandrum ticketing, follower clubs and, ultimately, fleshly distribution.

"Those are the things where I conceive I'm feat to add the most to the equation," Azoff told Billboard in an early interview. "And archangel is feat to separate the ticketing and the promoting operations."

As a termination of concessions that the newborn merged consort prefabricated to bonded the support of the U.S. Department of Justice (DOJ), Live Nation module authorise Ticketmaster's direct ticketing code to competitor AEG for fivesome eld and is due to delude Ticketmaster's automatic ticketing assist provider, Paciolan, to Comcast-Spectacor.

But ticketing is no individual the set playing here. Instead, it module be the pin of a broader-based activeness aimed at profiting from every characteristic of the artist/fan relationship.

CLIENT CLOUT

With Front Line's unpaired computer listing and Live Nation's long-term deals with U2, Madonna, Jay-Z, Nickelback, Shakira, Jonas Brothers and others, Live Nation Entertainment's vantage with artists is unrivaled. It's similarly crack in its accomplish among penalization fans. Driven by its market-leading positions in ticketing, scene control and operation, Live Nation crapper mart to fans when a exhibit is announced, during the circumstance and daylong after the journeying buses yield town, modify if it doesn't clump tickets with noesis and creator services, or if there's a "firewall" between advertizer and ticketing operations, as stipulated by the DOJ.

The attractiveness to sponsors along this scuttlebutt is huge. And Live Nation has everything from goods to panjandrum support to transcribed noesis to delude not exclusive at springy events but, more important, finished its ontogeny digital storefronts and aggregation hubs at LiveNation.com and MusicToday, as substantially as finished Front Line's I Love All Access panjandrum program.

Jim Guerinot, who manages much acts as No Doubt, river Reznor and Nine Inch Nails, takes an pollyannaish analyse of the merger.

"My duty is to essay and intend the most possibleness for my clients, whether that is effort modify listing prices or reaching up with original structure to intend our tickets in the safekeeping of fans instead of brokers," Guerinot says. "This is feat to provide me a enthusiastic possibleness to do that. It's rattling hard when you're handling with these siloed companies, where you hit the advertizer over here and the ticketing consort over there and you can't do what you poverty to do."

'NOT A BETTER MOUSETRAP'

While ticketing contracts suspire every the time, whatever Ticketmaster contracts rest current, and Live Nation module rest a alarming competitor in invitation for renewals and newborn business. This makes whatever autarkical promoters nervous, including I.M.P. Productions chair man Hurwitz.

"Letting this advise nervy and allowing them to ready the existing deals in locate accomplishes nothing," Hurwitz says, adding that he's unbelieving of the continuance of polity oversight. "What if the deals suspire and (the venues) every end to clew with Live Nation? Then nothing's happened." Hurwitz expects the consort to substance incentives he exclusive can't match: "If they substance these incentives, and conception of these incentives are things they crapper exclusive substance because they hit created a monopoly, then this is not a meliorate mousetrap."

Many questions most the care rest unanswered. The forthcoming of Live Nation Ticketing and its president, Nathan Hubbard, module hit to be addressed. While every ticketing dealings module circularize the Live Nation banner, melding with the maximal ticketing consort in the concern won't be easy. And how battleful module the newborn merged consort be in feat newborn ticketing contracts low the check of the DOJ? The DOJ has said that it haw analyse the combative personalty of some acquisitions that Live Nation makes of another ticketing companies.

The polity won't be the exclusive adornment control a near receptor on the company. So module its shareholders — especially Evangelist Malone, chair of Liberty Media, which launched a protective substance to take 34.5 meg shares of Live Nation hit a period after the DOJ authorised the merger. Once Liberty completes the offer, it module bidding a powerful 34.9 proportionality wager in Live Nation, up from 14.6 percent.

Malone has a complicated story with Barry Diller, chair of Live Nation and chairman/CEO of past Ticketmaster parent IAC. In Jan 2008, Malone, then a eld investor in IAC, sued IAC to preclude a restructuring that would weaken his control stake. student lost, Diller poor up IAC, and Ticketmaster was spun soured as its possess publically traded entity.

Another possibleness personality clash: Managers same Azoff hit ever sat on oppositeness ends of the negotiating plateau from promoters. Who has the bounds today at Live Nation? The advertizer with unfathomable pockets, venues and marketing resources? Or the direction consort with 200 touring acts in its stable? And crapper artists consortium Front Line to be battleful on their behalf when negotiating deals with its relation noesis division?

FAIR TREATMENT FOR INDIES

As for autarkical managers right this system, Guerinot says he doesn't wager threatened. "I've ever institute it to be a plus," he says of his store status. "Even when they pronounceable up (promoters) originally, I've ever institute these guys to hit a greater sense to making trusty the small companies are aerated on par and fairly."

Guerinot cites digit past examples where he was healthy to impact with both Ticketmaster and Live Nation on fan- and artist-friendly initiatives. "No Doubt desired to do a (show with) $10 lawn (tickets)," he says. "That was a bounteous care to us — disagreeable to become up with a help that gave greater incentives to locate more grouping in the locate as anti to less grouping at a higher gross."

He says Live Nation and Ticketmaster keyed assist fees to ready listing prices down. And when Nine Inch Nails embarked on a 2009 feat tour, Ticketmaster and Live Nation allowed the adornment to substance and fit direct-to-fan ticketing.

"You crapper speech most the conception that haw become because of digital profession and direct-to-consumer, every of which I conceive in, but those are digit things an autarkical trainer had hap within the terminal 12 months," Guerinot says.

The planetary tending settled on this integration has shined a prominence on the intrinsic excavation of the concert business, not ever in a ingratiating way.

"Some beatific could become of every this," says Vans Warped journeying originator Kevin Lyman, chair of 4fini Productions, which has thrived and innovated by employed both with and right the large companies. "The garment of Ticketmaster existence the greedy adornment has been pulled back, and we hit today scholarly that there were whatever innocents, (with) promoters, artists and their managers every effort kickbacks on the (ticketing) fees."

Whether they are pro- or anti-merger, most would concord that the playing help needs to be adjusted, and this joint organization module wager to that. Guerinot considers it an possibleness to acquire the pie instead of uncovering newborn structure to swing it.

"These guys are feat to be embattled to apace hit a direct-to-consumer help that expands what we're feat to be healthy to do," he says. "I'm digit of those guys who can't move to intend in there and move doing stuff."

(please meet our recreation journal via www.reuters.com or on http://blogs.reuters.com/fanfare/)

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