Facing nearly eight months of no live music now, ticketing and promotion giant Live Nation Entertainment reported a 95% drop in revenue in its third quarter compared to the same time last year, the company said in its earnings report on Thursday. The stark figure, though somewhat expected, signals yet another tough period as Live Nation batters the ongoing Covid-19 pandemic.
Third-quarter revenue was about $154 million in 2020 compared to over $3 billion in 2019, with the company — which operates both Live Nation and Ticketmaster — reporting a $173 million loss for its concert business and a $142 million loss for ticketing. Live Nation lost about $319 million in the third quarter. But it repeatedly touted its cost-reduction and cost-management programs, the former of which Live Nation said will cut company costs by $900 million for the year.
Live Nation says it has $1.9 billion in liquidity, enough to carry the company until it hopes concerts can return at full scale outdoors in summer 2021.
Refund rates remain low, Live Nation said, with 83% of customers electing to keep their tickets for rescheduled show dates rather than get their money back. That would indicate sizable fan desire to return to shows once they’re an option again — but while Live Nation remains confident in a summer 2021 return, several live music insiders haven’t been as confident. Former William Morris Endeavor music head Marc Geiger, who recently launched an initiative to buy majority stakes in struggling venues, told industry observer Bob Lefsetz that he doubted concerts would come back until as late as 2022. While some have speculated that major promoters like AEG and Live Nation would try to buy some struggling venues, on the earnings call, Live Nation CEO Michael Rapino said he didn’t see those acquisitions to be particularly promising for the company’s business.
“Any great live club isn’t throwing anyone the keys cheaply, if you own the Troubadour, a legendary business, you’re not selling to Marc Geiger or anyone else for one or two times’ multiple,” Rapino said. We don’t think there’s a huge opportunity that there’s a fire sale at that level. Clubs on their own are a tough business. We like them as part of our overall ecosystem, but we don’t believe that clubs, whether you own 10 or 20 of them on their own provide much global or U.S. synergy to leverage off of.”
In a release accompanying Live Nation’s earnings report, the company also detailed some of its plan for a return to live shows, saying Live Nation is currently developing its protocols for shows. It also developed its SmartEvent technology, which helped create a tool for socially distancing its seat options. Live Nation product SafeTix can be used to help with contact tracing, the company said.
With concerts shuttered, Live Nation and several independent venues have been pivoting to drive-in concerts and makeshift outdoor shows. While those gigs have been giving artists a chance to play in front of fans and helped venues pay some bills or keep some of their workers on the payroll, they aren’t nearly as lucrative as a traditional full-capacity gig. And as much of the U.S. enters the colder winter months, even those will have to stop.
Venues say that government assistance is the only thing that will stop permanent closures for much of the industry and have been advocating for funding through the National Independent Venue Association and its Save Our Stages legislature. Live Nation meanwhile, along with rival AEG and several major talent agencies, launched the separate #SaveLiveEventsNow coalition to advocate for similar but broader legislation to support the live music business.
Live Nation, along with many venues and individual artists, has further been delving into substantial pay-per-view livestreaming opportunities since the pandemic began and livestreaming has emerged as a prominent burgeoning revenue stream. Live Nation has held streamed concerts for the likes of Lil Uzi Vert, Megan Thee Stallion and Scarypoolparty. Rapino hinted that livestreaming could be a continued supplement to the concert business after the pandemic subsides.
“It’s a great compliment to the core business, there’s always going to be the Beyoncés, BTS’s, Billie Eilishes who can do the old school pay-per-view and can drive significant dollars,” Rapino said. “But generally this business is a compliment and promotion to the core concert. We think going into 2021 and 2022, we’ll be streaming a lot more of our concerts to fans that can’t show up to the event, or some that may want to stream on our app when they’re at the event because of some added value of digital backrooms or camera angles.”