Live Nation May Need a New Strategy, Even After Its Big Summer Season

Live Nation Entertainment’s financial results midway through 2024 reported record-breaking amounts of money, but a deeper dig into the numbers revealed that such growth was increasingly fueled by rising ticket prices rather than selling more tickets. Despite having its “most active summer concert season ever,” LNE’s Q3 2024 results saw the first dip in revenue since the pandemic, suggesting that a change in strategy is needed.

A year after a summer season ruled by Taylor Swift and Beyoncé, LNE saw a 6% decline in revenue for Q3 2024, reaching $7.7 billion compared with $8.2 billion in Q3 2023. Looking at individual streams shows concert revenue down by 6% ($6.6 billion vs. $7 billion), while ticketing revenue dipped further by 17% ($694 million vs. $838 million).

Total adjusted operating income fared better at $910 million, making for a 4% increase from Q3 2023 — and “record profitability,” according to the report. This number was fueled mainly by a 39% YoY jump from concerts ($474 million) and a 10% increase in sponsorship and advertising ($275 million). Those gains were slightly offset by ticket AOI, which decreased by 33% from $352 million in Q3 2023 to $236 million this Q3.

The estimated number of concerts held and tickets sold for the quarter weren’t released this time around, but LNE estimates 144 million tickets for Live Nation concerts were sold worldwide between January and October, a 3% increase from the same period in 2023. Similarly, global fan attendance in Q3 also grew by 3%, to 112 million, which LNE credited to “double-digit growth” in arena and amphitheater attendance.

That growth was slightly hindered by stadium show tallies, which declined by 30% since last Q3. LNE doesn’t typically publish the breakdown between venue types, but this dip in top-capacity venues seems to continue both the “reduced stadium activity” and “double-digit growth” for lower-capacity venues noted in the midyear report.

As covered last quarter, growth of tickets and attendance has slowed to single-digit percentages following the post-pandemic spike, but LNE expected that. Outside of the report, LNE acknowledged in an investor presentation last week that 95% of shows currently don’t sell out, leaving around 35 million tickets on the table globally. A more pressing concern is likely that the money, while far from being in the red, is now slowing as well (with total revenue and AOI for 2024 to date growing by 3% and 13%, respectively).

All of these results and stats suggest LNE’s strategy of inflating ticket prices to bring up its bottom line and counterbalance slowing attendance is losing its effectiveness. While lowering ticket prices may certainly be a possibility as a result, another plausible route for a colossus like LNE is simply to buy and build up low- and medium-capacity rooms to meet the audience shift from stadiums to smaller stages. VIP+ has reached out to Live Nation for further comment.

The latter seems already to be in play thanks to Venue Nation, LNE’s venue operations branch. Several promising signs are coming from that corner of the business: On-site spending at Venue Nation spaces is up by double digits, and these places are on track to host around 60 million fans by the end of the year, up 8% from 2023.

These numbers align nicely with Luminate’s recent “U.S. Music 360” survey data, which found Gen Z surpassing Millennials in both concert spending and attendance for the first time this year.

In other words, the demand for live music is not only still there, it’s growing, as Gen Z gains more buying power. But with tickets prices rising, fans are putting their money toward arena and amphitheater shows rather than stadium shows and festivals. LNE said in its investor presentation it has 80 new venues planned for the coming years and over $3 billion set aside for acquisitions, so the company seems keen on adapting to the shifting demand.

Of course, LNE placing greater focus on smaller venues is set to put further pressure on independent venues, which are already struggling as expenses rise and profit margins narrow. While there isn’t a definitive report or data on indie music venues in the U.S., the recently released Nashville Independent Venue Study, led by the Nashville Metro Planning Department, offers a glimpse into arguably the most live music-friendly cities in the country, with six times more music venues per capita than New York City.

The report found that out of the city’s 252 dedicated live music spaces, only 24 are independently owned and operated. Some 48 are classified as “quasi-independent,” meaning they partner with a corporate name such as Live Nation or Ticketmaster for booking and promotion. The rest — around 71% — are nonindependent and run by the likes of Venue Nation.

The current landscape of “Music City” is indicative of the live music industry in general, which is set to be further dominated by LNE-owned and affiliated spaces. And with the recent election in the rearview, LNE probably won’t have to worry about further scrutiny and roadblocks from the Justice Department as it seeks to grow even bigger in 2025.

“As we look toward an even bigger 2025, we have a larger lineup of stadium, arena and amphitheater shows for fans to enjoy,” LNE CEO Michael Rapino said in the company’s Q3 report. “Momentum continues to build, as we expand the industry’s infrastructure with music-focused venues to support artists and reach untapped fan demand across the globe.”