2023-09-27 17:00:50
The world’s largest live entertainment company, Live Nation, has announced that it will pay smaller musicians who play in the company’s clubs $1,500 per performance in the USA – in addition to the agreed fees. As the company announced on Tuesday, up-and-coming artists – headliners and support bands on a tour – should be supported with the amount for gas and travel costs in view of the increased costs for tours. In addition, the so-called “merch cuts” will no longer be available in the participating clubs in the future, so musicians will no longer have to give up a share of their income from the sale of fan items.
As part of the “On The Road Again” program, which was launched together with US musician Willie Nelson, crew members of the bands and locations are also to be supported. The amount of this support was not disclosed. How long the program will run is currently unknown.
According to the website set up, 77 venues are part of the program. Overall, it is expected that the program will raise “tens of millions of dollars” to “club artists” and crews by the end of the year, Live Nation said.
Live Nation will make $16.7 billion in sales in 2022
Since the touring business started up again, artists have been faced with drastically increased costs, for example for fuel, vehicle rentals and equipment. At the same time, ticket demand is sometimes rather subdued, especially among smaller and medium-sized musicians, while superstar concerts in particular are generally going well, even in view of the continued rise in ticket prices.
Live Nation acts – like the comparatively smaller M-Dax group CTS Eventim in Europe – as a tour organizer, venue operator and has a large ticketing platform with Ticketmaster. The portfolio also includes numerous arenas and larger venues that are not part of the announced program.
The group recently reported record income again. Sales of $5.6 billion were recorded for the second quarter of this year. Last year, Live Nation totaled $16.7 billion – a figure that is expected to be exceeded this year. Most recently, stars such as Bruce Springsteen, Harry Styles, The Weeknd and Beyonce were or are on tour with Live Nation as a tour organizer.
Criticism of market power
The group is repeatedly criticized because of its market power, not least because of the fees that Ticketmaster also receives for non-group events. Recently there was trouble in the USA during advance sales for the current Taylor Swift tour. When pre-sales started, the Ticketmaster site crashed. Fans spent hours in queues, flew out and came back in, and ultimately sales had to be interrupted.
Ticketmaster said the reason for the problems was that more fans than ever before had registered for pre-sales and that there had been inquiries from other interested parties on top of that. There have also been countless bot attacks. Nevertheless, a new record was set with the sale of more than two million tickets in one day. Swift’s tour organizer – a company of the Anschutz Entertainment Group (AEG) – in turn referred to exclusive agreements on the part of “the vast majority of venues on the tour”, which provided for ticket sales via Ticketmaster. You simply had no other choice.
The US Department of Justice had reportedly launched an antitrust investigation before the Swift presale. In December last year, some fans filed a class action lawsuit against Live Nation, accusing the company of abusing its market power. A Senate hearing followed at the beginning of the year.
Ticketmaster’s system, called “dynamic pricing,” is also criticized, with which ticket prices rise or fall depending on demand. However, this will only be used if artists and their team request it. Most recently, as part of an initiative by US President Joe Biden, Live Nation committed to displaying the entire ticket price, including any fees, in the first step of the purchase process for its shows sold via Ticketmaster from the beginning of September.
Does the program harm independent clubs?
The so-called “merch cuts” have been criticized by artists for some time. They are not a Live Nation idea, but rather a common practice in many places. There are also individual venues in Germany that require a share of merchandising revenue. The amount varies; in the USA and Great Britain, artists report fee models that provide between 10 and 25 percent. Sometimes the value increases to up to 30 percent.
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Selling fan items is a very important source of income on tour for many artists, especially small and medium-sized ones. In this respect, this step by Live Nation should generally be well received. However, criticism comes from the US association of smaller independent venues (National Independent Venue Association).
The Live Nation program appears to be a “calculated attempt to use the vast resources of a listed conglomerate to lure artists away from independent venues and further consolidate control of the live sector,” it said in a statement to Rolling Stone.” Such an approach endangers small and medium-sized venues with a capacity of less than 3,000 fans, many of which are already struggling to “keep their doors open”.
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