National reopening plans, pent-up customer demand and digitalisation will all contribute to the revival of the live events sector, according to Joe Berchtold, President of Live Entertainment.
The head of the world leading event promoter cited the UK government’s announcement of a roadmap to lifting lockdown in England as a great enabler to reopening the events business.
“The UK is the leading example of what’s working well. They got out fast with the vaccines. They came out with a plan last week,” he told Morgan Stanley’s Technology, Media & Telecom Conference on 4th March.
Subject to the progress of the virus and vaccination, the UK aims to remove all lockdown restrictions in England in a phased approach by 21 June. “Because we have those dates, we can make an informed decision. It has a big impact on consumer side.”
The announcement of the roadmap created a rapid surge in sales of festivals, with Live Nation selling 170,000 tickets in three days, including Creamfields and Reading and Leeds which sold out rapidly.
“We needed a 90-day plan that gives the ecosystem the ability to plan.
“We’re waiting for that in the US, or if not on a state-by-state basis,” he said. “It looks like the south is moving fast. And there are more aggressive plans from some of the big states like California and New York; others are more conservative."
Fortunately outdoor events, which reopen soonest due to the lower risk of transmission, serve the promoter’s biggest customer base. “The benefit for us is the large volume of fans. our most valuable customers are our fans in amphitheatres and our festivals. That’s the best way for us to economically get moving.”
With pressure building on both the supply and demand side, Live Nation’s post-pandemic strategy is to drive more fans into its ecosystem and monetise more effectively.
“We are looking at an elevated supply and demand as we come out of this. We have a very large pent up supply issue,” he said, highlighting a roster of big name artists who have been unable to tour during the pandemic.
“You have latent demand of people wanting to see artists. 95% of fans want to go as soon as they can – so we’re going to have an accelerated supply and demand dynamic.”
Although Live Nation’s revenues were hit dramatically in 2020, their cost base has also reduced.
“We’ve took $950 million out of our cost base last year, and we’re putting $750 million back in. So that’s making us nimbler and more effective.
The promoter is also looking for new revenue streams.
“We’re looking into streaming. There are fans out there that are not going to be able to go to the show, if it’s not in their city or if it’s sold out, who will buy a stream. We can very efficiently provide our thousands of artists with the option of adding a stream to a show or a tour.
“Most people want to go to the show rather than stream, which reinforces the value of the live proposition. But there are a lot of people who just can’t make it. so it opens the scale of distribution on a global basis. For most artists it will be integrated into touring – an additional element of their live show.”
The pandemic is also accelerating the deployment of digital ticketing. “People will go into the venue on a ticketless basis. This will improve the fan experience and reduce friction. If you reduce friction, you’ll sell more food and beverage and merchandise. That will have direct benefits for the fan, for the venue, it helps us to know and understand our fans, to add value to the sponsors – so the whole system starts to work better.
“Across the whole business, we’re finding ways to do it better.”
Future growth will also be driven beyond the UK and the US. “We’re doing this on a global basis in 40 countries. We have teams in all the markets, taking a market by market approach.
“We are excited about new markets and how they come out of this.”
These comments were made in conversation with Ben Swinburne, Head of U.S. Media Research at Morgan Stanley
