For those that know me,  you know I have worked in the digital marketing arms of both Live Nation (Ultrastar Entertainment/MusicToday) and Ticketmaster (echomusic, then echo, then… helloecho?).  In fact, leaving echo to begin working at live nation caused a bit of a stir, as technically I was headed to straight to the competition.

Having seen the landscape from both sides of the fence, I can tell you these two don’t play nice.  From the first day of the Ticketmaster/echo merger not one kind word was spoken about MusicToday or Live Nation. In my seven months working for Live Nation, not one kind word was spoken about Ticketmaster.  In fact, more times than not, it was how much more ROBUST the Live Nation (see MusicToday) ticketing engine would be when launched.  As seen earlier this week, Phish fans aren’t impressed with the new engine.  These two giants have been trying to one-up and out do one another for as long as they’ve been frienemies.  Hoping to one day break free from ones the reliance on the other, and finally just a month ago, there was complete and total separation.

So now we reach a crossroad.  Maybe these rivals depend on each other more than they ever thought.  Live Nation masters in promoting their tours, they own some of the largest venues in the world, and can basically make an international tour happen… but their ticketing engine is apparently bullocks.   Ticketmaster sells tickets (and adds a lovely surcharge to the fans delight), and they’re good at it… but what venues are they going to sell tickets in if they miss out on all the sheds and major tours?

So great, merge, stop trying to destroy one another… but does a Live Nation / Ticketmaster merger give fans any option?

The beauty of the Live Nation ticketing platform was to go head to head with Ticketmaster and beat them where they are most weak the public perception on those *bleepin* service charges….. So what happens next?  A merger?  One option for the fan, a near monopoly on tickets, touring, venues, and promotion?  Not to mention the resurgence of those damn “360 deals”, and dozens of “reunion tours” (and next to no new tours featuring new artists).

How does this scenario benefit the fan? A merger of these two companies completely rules out the idea of competition

Looks like we should get used to seeing the Rolling Stones on stage, with this model they’ll be playing sold out venues well into their 90′s.  But don’t expect any new music sensations, a Live Nation Ticketmaster would only cater to the megatours, with a mega margin already built in for the taking.

This is a MAJOR win for Live Nation as they have now stolen Ticketmaster’s #2 client. Earlier this year, Live Nation announced they would be ending their OWN client relationship with TM, taking all of that inventory of out TM’s system as well. However, to truly appreciate the game changing nature of this move, you have to consider what TM has become.

When a company is allowed to exist as a near-monopoly for so many years, they become lazy, uninspired and reliant on a singular revenue stream. Ticketmaster clearly fits the bill on all 3. What’s worse for TM is that the “consumer at large” absolutely hates them. Faced with no clear alternative in the market for so many years, concert fans begrudgingly paid the service fees to get their ticket. TM’s internal mgt team not only hasn’t cared, but doesn’t even consider the ticket buyer as their customer! To TM the venue and artist manager are customer and the ticket buyer be damned. Case in point – TM will bend to the will of any manager who wants to pad their net revenue per ticket, but by RAISING the service fee. TM will then provide that money as a kickback to the mgr.

Contrast that model to Live Nation, who’s main source of revenue is NOT service fees, but a blend of multiple revenue sources. These are revenue sources where the fan actively participates and appreciates the business entities involved. Coupled with exclusive ticketing rights for big name artists, LN has set a solid base from which to operate and actually REACT to consumer sentiment or changing trends. They have also existed outside of a corporate umbrella, an uncomfortable situation for Ticketmaster who now finds itself spun off from Barry Diller’s IAC.

Predictably, there will be those within the TM ecosystem who will tell you today’s announcement doesn’t hurt TM in the long run – that TM’s business is much bigger than just one client. However, TM CEO Sean Moriarty was quick with his retort, “SMG lacks authority to make a deal on behalf of the municipally owned venues it runs because it is generally required to award services based on competitive bids. We will continue to compete on an individual basis for all venues seeking ticketing services.” Note to readers: Moriarty’s shotgun press releases always come from a place of panic. Read between the lines and you see just how upset he is.

And so the great “Ticket Wars” wage on. As we near the start of 2009, the world will be watching to see if and when Live Nation’s own ticketing platform takes off. Until then, give LN their moment. Today was the day the mighty Death Star was weakened.

Wall Street Journal Article: http://online.wsj.com/article/SB122108892557921303.html