Today I went inside the belly of the beast. I’m going to tell you what I learned.

A. BIGCHAMPAGNE

"All the innovation’s taking place on the edges."

Eric Garland

At least Live Nation knows this. Unlike the labels. That’s what is killing the latter, they’re just trying to hang on to what they’ve got, believing their history and deep pockets will allow them to maintain their dominance. Unfortunately, they’re going to be pecked to death by ducks. Having lost their distribution monopoly, the labels are being victimized by people they cannot see, who are stealing their business and will continue to do so. In other words, anybody can record a track and distribute it, and they see no reason to go into business with a major label unless they’re going to get Top Forty airplay, which is a narrow sphere which excludes most music makers. Furthermore, the majors are only interested in that which can get on the radio, and they’re blind to developing acts, which see no reason to give up so much action in a bad 360 deal wherein they get very little in return.

It’s different in the concert promotion world. Renting a hall, promoting a concert, that requires huge cash outlays most people can’t lay their hands on. And established acts don’t want to risk playing with newbies who might stiff them.

Eric Garland is a good twenty years younger than anybody running a major label. And those twenty years make all the difference. Garland grew up with computers, Doug Morris, Lucian Grainge and Lyor Cohen did not. Garland knows it’s hard to control the market, the goal is just to get in the way and try to gain some revenue.

There are a ton of innovators in the tech sphere. Unfortunately, most of them took VC money and have to generate a huge return. They’re run by techies as opposed to savvy music people. If you think Live Nation or AEG is just gonna cough up a ton of data to Songkick and the rest of the newbie players, you’re dreaming. Either those third parties have to come under the umbrella at a fair price, or they will eventually be marginalized.

B. The Mission

Garland/BigChampagne’s mission is to beef up livenation.com, to turn it into a destination unto itself. And the way they’re planning to do this is by creating a timeline of concerts, aggregating all the data in one site, tweets, youtube videos… Not only will you be able to talk with others about the upcoming show, you’ll be able to see clips of the show and what people are saying about it in real time.

The ultimate goal is to sell more advertising, turns out advertisers are champing at the bit.

There’s one iTunes, one Amazon, one Facebook. Can Live Nation create the definitive music site?

Someone will.

As per above, Eric Garland knows this. He has to worry less about the labels and AEG than unknown competitors. Which he must buy at a fair price or imitate, assuming they don’t have too much of a head start.

One thing you’ve got to know about Steve Jobs is he was not nice. Can Garland and his team be cutthroat enough, employ a scorched earth policy and own the sphere?

We’ll see.

TICKETMASTER

It’s all about the bots. TM is doubling down. It’s hired an expert to fight them. They know that it’s a war, but tests have shown a 95% effectiveness at keeping the bots out. No one else is investing here.

You can’t win in court. You can’t win with legislation. You’ve got to fight fire with fire.

Ticketmaster is all about the data. They repriced the season of one of America’s foremost baseball teams utilizing their models. They raised prices for football games, sold extras along with tickets. Consulting is a new area of revenue for TM. No one else is scaled at this level. This is how they’re planning on keeping clients, not by cutting fees, but by showing customers how they can make them more money via data.

As for the concept of soft on-sale dates/authorization… Nathan Hubbard said data shows people don’t want to guarantee payment unless you can show them exactly what ticket they’re buying, where they’re gonna sit.

In other words, the future is fighting the bots.

As for the game itself…

The Channel 4 documentary and the arrest of Vaccaro only helped Live Nation. Sure, Live Nation may not be completely innocent, but the more light shed on scalping and resale, the greater the chance for change, for acts to decide to go to paperless, like John Mayer, Kid Rock and Bruce Springsteen.

ELECTRONIC

How long does it last? That’s the question. Is electronic music the sound of 2011, with a cleanup year in 2012, and then it’s done? Or is it here to stay?

Perry Lavoisne says the deejays now want touring deals. Worldwide in many cases. They’re jumping from tents to arenas.

Furthermore, the deejays are investing in production when their competitors, the live acts, the bands, are pulling back. In other words, you get more bang for your buck with electronic.

Don’t be mesmerized by the media trumpeting "The Voice". That’s the mainstream stroking the mainstream. Electronic burgeoned without any mainstream attention whatsoever. It’s gonna happen in rock… All those bands outside the major label system will gain traction and succeed. But they won’t be the shoegazing fortysomethings, but the young ‘uns, the twentysomethings. (This last paragraph is my editorialization, as for LN, they’re bullish on electronic, all the building owners want in, they went on a road show and convinced them.)

AMPHITHEATERS

They said no in 2011, and it worked for them.

They’ve created an app, that models the gig. Based on history, similar acts, day of the week and more. There are multiple price points. More acts are paying attention, they want a full house.

The problem is too many old school agents and managers are focused on the bottom line, needing 450k on a weekday, not seeing that they can’t sell out and that it ultimately hurts the act.

We’re seeing the death of the old model and the birth of the new. Promoters are not to be trusted, but the adversarial relationship did not work.

ARENAS

The theory is you can make much more money if you own the building. This is true. But with so many buildings out there, they’re vying with each other, desperate for gigs. As a result, rebates are huge. Live Nation can make as much in many cases as if they owned the building.

MICHAEL RAPINO

Spoke less and made more sense than ever.

He says Wall Street plays by the quarter, everybody in the live sphere knows it’s about the year. And he likes the numbers, and they’re all public.

The growth is overseas. You can make money in Latin America now. Festivals are huge in Europe. Ticketmaster was not developed internationally, now that’s a goal. As well as updating the software thereof.

CONCLUSION ONE

Okay, now you’re sitting there believing I’ve been snowed. What about this? What about that?

Well, AEG is first and foremost a real estate play, with an emphasis on sports. Live Nation is in neither of those spheres. Live Nation believes that’s a winning strategy, as for what you believe…

The team… Assuming everybody will pay the same amount, it’s the extras that are closing clients, the sheer number of people working at Live Nation in the sponsorship and marketing departments, et al. This is the advantage the labels used to have, which they still have but is fading…scale.

Ticketing… You might be able to cut a better deal with a competitor, but can it do more than get the tickets sold on Saturday morning?

Discounting… To a great degree, this is act driven. Acts will not own their worth and Live Nation is forced to resort to deals, which hurts everybody.

CONCLUSION TWO

The acts have a right to be here, and nobody else does. That’s what Eric Garland said. Which is why your old buddy the radio promotion man is crying in his beer and there are many more people who used to work in music than do now. The acts generate the heat, they sell the tickets, Live Nation is further down the river, the company must innovate and adjust in order to maintain its advantage.

Which is why if you want to have a career in this business, be an act, or a techie. You’ve got to create. Intimidation is not what it once was. Nor are relationships. Show me how you can make me more money. Show me how you can help me. Give me more than a check, give me tools.

Live Nation is not indomitable.

But right now no one is in their game.

Live Nation is not resting on its laurels. It needs to play to win every damn day.

But the dirty little secret is concert promotion is a river of nickels as the "Wall Street Journal" so eloquently put it. Right now, I cannot see the big bang, the big breakthrough that generates a ton of cash. There’s no iPod/iPad/iPhone in the pipeline.

Maybe Eric Garland will come up with one.

But Rapino believes he’s righted the ship, increased profits, and since they’re the only public company in the game, they get all the heat.

Maybe concert promotion is not like tech, maybe it’s a steady business, albeit one with decent returns.

Then again, it’s kind of like music. There’s a limited amount of good stuff. Always has been, always will be. But if music becomes the new Facebook, the new iPad, if acts worry less about clothing and corporate endorsement and more about message…anything is possible.