People Are Hanging On To Concert Tickets
Earlier this year we wrote about Ticketmaster and events promoter Live Nation caving to pressure to refund customers who purchased tickets to events that were postponed due to the coronavirus.
At the time, Ticketmaster cancelled or postponed 30,000 events worth $2 billion in ticket sales. Customers were given 30 days to request a refund or get a credit for a future purchase.
Live Nation now says that 86% of customers who were offered refunds decided to keep their tickets for rescheduled shows. The company also said about two-thirds of ticket holders for festivals also decided to keep their tickets instead of getting a refund.
The bad news for Live Nation is revenue in the second quarter, which is the busiest part of the year for the industry, fell by 98% compared to the same period last year. Concert division revenue dropped by 95% year-over-year to $141.8 million from $2.6 billion.
As a result of the refunds, Live Nation posted a negative $86 million in sales for ticketing. During the same period last year, ticketing revenue was $371 million. Live Nation said it has already sold 19 million tickets to 4,000 festivals and concerts for 2021.
"Over the past three months, our top priority has been strengthening our financial position to ensure that we have the liquidity and flexibility to get through an extended period with no live events," CEO of Live Nation Michael Rapino said. "Our expectation is that live events will return at scale in the summer of 2021, with ticket sales ramping up in the quarters leading up to these shows."
Shares of Live Nation remain well above their lows from March but are still down more than 30% from their all-time high in February.
Although they don't generate the returns of concerts, Live Nation noted its virtual concerts saw 67 million views in the second quarter. Rapino noted virtual concerts are a promising platform over the long term.
The pandemic has hit the live music industry hard with Live Nation among a handful of companies such as its competitor AEG and major booking agencies that have announced furloughs or layoffs. The pandemic also led to the formation of the National Independent Venue Association which found that more than 1,000 independent venues could close within six months without financial assistance.
While its encouraging so many are opting to hang on to their tickets, it still remains to be determined when live concerts will return. Unfortunately, even if they do return in 2021 it may be too late for many in the industry.
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