Artwork by Sophia Huang & Victor Lee

Pre-Pandemic Momentum

2019 represented Live Nation Entertainment’s ninth consecutive year of growth. Its core business of concert attendance reached a high of 98 million fans globally, highlighting a 19% increase in operating income. Live Nation, whose vision is “to maximize the live concert experience,” has built a global empire that rests on live music and events. It directly manages over 40,000 concerts per year which drive 82% of their revenue and are the core of their flywheel business model. Live Nation’s market presence was strengthened by vertical integration, notably through ticketing platform Ticketmaster, an artist management label called Artist Nation, and a growing sponsorship and advertisement presence. 

As the company headed into 2020, the signs of continued success were evident as of mid-February: it saw a 10% year-over-year increase in tickets sold and the confirmed number of concerts was up 30%. Its stock price, under the ticker (NYSE: LYV), was trading at an all-time high as it was on its way to bolstering its position as the global leader of entertainment. 

Live Nation's Digital Evolution

Being amongst the first industries to close and last to open as a result of COVID-19, Live Nation has worked tirelessly to consolidate resources and maintain strong cash disciplines. It implemented a $600 million cost reduction effort which resulted in furloughing over 20% of staff as it planned for the return of live events.

To ensure the continuance of live events, Live Nation has pivoted towards streaming, underscored by their acquisition of Veeps, a ticketed live stream platform. Noted by CEO Michael Rapino as “a great complement to their core business,” live streaming has ensured that fans remain connected and engaged with their favourite artists throughout the pandemic. Live streaming gives Live Nation a unique opportunity to promote concerts that effectively have no capacity limit. In June 2020, a Bangtan Boys (BTS) live stream saw over 756,000 concurrent viewers, allowing Live Nation to instantly access fan insights and interactions more easily. However, monetizing these events has been difficult as consumers have struggled to justify paying for content that was previously available for free. 

Beyond that, the revenue model of streaming distinctly hurts Live Nation. For example, Tim Mcgraw grosses approximately $916,000 per concert when he goes on tour, according to Pollstar. Touring consistently within North America for four months offers fans the opportunity to experience one of 60 unique concerts. Each new region on the tour brings an opportunity for the artist and Live Nation to engage new subsets of fans who are bounded by location. As the tour finishes, Tim Mcgraw grosses over $50 million in total. Live Nation then takes their piece for their respective duties including ticketing, marketing, and production. Comparatively, in the digital realm, Tim Mcgraw grosses approximately $405,000 for a large ticketed live stream. But, fans are no longer geographically restricted and can tune in from anywhere, meaning there is no value in producing 60 different live streams. Thus, Live Nation’s revenue generation opportunities diminish in this scenario as the myriad events that need ticketing, marketing and production are superseded.

For the majority of these events, Live Nation has filled this ticketing revenue gap with sponsorship revenue. Within Canada, several Live Nation produced streams and broadcasts now have a major sponsorship presence like Jim Beam presents Live from Inside, Open Mike’s Comedy series, and Budweiser Stage at Home. However, in a Covid era world, its core business will never be able to drive the pre-pandemic volume of shows, revenue, or consumer satisfaction as the emotional connection of an artist and their fans are not replaceable in a digital realm. In 2018, Live Nation released a study that showed fans experienced an emotional intensity that was 2.8 times stronger at live concerts than while listening to recorded music.


Together Again: Unfaltering Fan Demand

As months pass without live shows, fans are increasingly anxious to see their favourite artists live. With 86% of fans holding onto their tickets for rescheduled shows instead of opting for a refund and 90% of fans confident in the return of live music, Live Nation will surely have a large opportunity at their feet when the pandemic subsides. These statistics, paired with the fact that live music growth outpaced streamed music before the pandemic, further highlights the raging demand for live entertainment. It is no surprise that Wall Street is once again touting Live Nation for a large return as the company is currently trading at new all-time highs.


Live Nation’s New Reality

However, the resolution of COVID-19 does not immediately imply a return to pre-pandemic times for Live Nation. Fan attention will likely be divided between the return of other live events, most notably sports. Sports teams, who are heavily reliant on broadcasting deals as a source of revenue, have not been nearly as affected by missing fans as Live Nation has. Secondly, Live Nation will have opportunistic industry competitors as well. Within North America, Live Nation does hold the dominant market share; however, its largest direct competitor, AEG, still entertains over 100 million guests a year. Similar to Live Nation, AEG will be eyeing the return of large-scale live events and looking to capitalize. Finally, Live Nation will be under financial pressure come event season. At the end of February 2020, Live Nation had $643 million of free cash of which $417 million was debt raised in early January. This capital was projected to hold them until Summer 2021 when live events will supposedly return to some scale. If global mass assembly is delayed because of further hurdles, Live Nation could likely find itself in deeper financial peril. As a result, Live Nation must capture the majority of the re-emerging live event market share when the opportunity comes, alongside optimizing the return on each event they hold. 


The Show Goes On: Paving a Data-Driven Way Forward

The rise of Artificial Intelligence (AI), and more specifically machine learning, has been seen across numerous disparate industries. Organizations can employ algorithms to mine past data to discover, understand, and quantify powerful—yet inconspicuous—trends with respect to business goals. Once the machine has been trained to understand how a specific combination of variables leads to a certain outcome, they can leverage these insights to optimize their proactive decision-making with data-proven foresight.

Live Nation has promoted approximately 575,000 shows since its inception in 1996. As a result, the company possesses a vast amount of data, with its data collection rate only increasing with the advancement of the digital age. Live Nation is sitting on a mine of data that with the help of machine learning could build a predictive ticketing tool that takes into account the multi-dimensional variables that affect their operations, namely ticket sales. Live Nation’s position as the global leader of entertainment naturally offers it an abundance of high-quality training data that would make its model stronger than any replica potentially built by a competitor. In turn, this will further entrench their position as the global leader. 

Coming out of the pandemic, this is an effective way that Live Nation can aggressively retake market share and regain scale, while also being more defensively aware of opportunity risk. A deeper understanding of the variables that affect ticket sales like staggering ticket sale releases, the expenses needed for a marketing campaign, or the time a consumer takes between their first click and actual purchase of a ticket could be optimized, empowering them to iterate and reach future strategies.




These variables are complex in their own right—they are considerations that Live Nation faces with every show they promote: their chosen promoter strategy, consumer demographics, and digital channels all affect ticket sales. Additionally, the advent of new social media such as Tiktok and the acceleration of the streaming industry with the likes of Apple Music and Spotify has brought forth another nuance to the world of live events: artists now have new outlets to find exposure and advance their careers. These variables are then paired with artist-specific considerations that must be taken into account. For Live Nation, optimizing the relationship between these variables to maximize engagement, accessibility, and return would provide them with more control and a new competitive advantage over the industry. 

When constructing the model, data privacy and security concerns are inevitable. Since the model would predominantly use past data that Live Nation already possesses, fears of third party usage are mitigated. The largest issue would likely be accessing the digital data that is proprietary to large technology companies that host streaming platforms like Spotify or social media platforms like TikTok. However, the fact that this tool doesn’t granularly target consumers in a one-to-one manner and instead combs this data for one-to-many insights should similarly mitigate concerns.


Fly Me to the Moon: A Cross-Industry Case Study

The concert industry and the airline industry have interesting parallels that further demonstrate AI’s potential power for Live Nation. Both industries focus on bringing people together in a confined space with the purchase of tickets, the management of that subsequent experience, and repeating that operation on different scales. Within the airline industry, data scientists leverage AI and machine learning to define destinations, adjust prices for specific markets and manage seat inventory. Live Nation and an artists’ decision on where to tour and subsequent ticketing strategy is not dissimilar. The airline industry can offer Live Nation a potential roadmap on how to effectively introduce and integrate AI and machine learning into their work, bolstering not only the feasibility of the endeavour but also providing a wealth of prior expertise to build upon.


Ticket Sales & Beyond

Upon successful execution, Live Nation will be able to better control and harness the changing music industry by effectively managing the entire consumer decision journey. For Live Nation, the most rapidly evolving variables that they must consider are associated with digital platforms. This tool will help them determine how a stream or view translates to a ticket sale, allowing them to book burgeoning artists on new platforms like TikTok more strategically. Ultimately, this empowers Live Nation to fine-tune its deals and regain scale more efficiently.  

Additionally, should they identify previously unknown factors that lead to ticket sales, the predictive analytics tool would allow Live Nation to recognize and leverage them accordingly to better promote their event. For example, if they saw that the timing of ticket sales for a country show was linked to how suburban fans aged 14-18 interacted with one another via Tiktok, Live Nation could better position and target their on-sale times, the channels they used for marketing, and even the pricing of their shows. 

Finally, by having a powerful predictive tool to project ticket sales and engagement, Live Nation situates itself in a better position for long-term strategic decision-making. For potential venue acquisitions or festival expansions, this is a huge asset. Since Live Nation will be able to better project where their fans are willing to spend—enabling them to better maximize dollar extraction—they will be able to manifest strategic agility throughout their business. 


Let the Good Times Roll

The zeal of concertgoers is fueled by the visceral experience of live events—the performers, the production, and the emotion of the audience all contribute to lasting memories; fans’ hunger to experience live events has only deepened throughout the pandemic. If anything, the pandemic has shown us that Live Nation thrives at the intersection of fans, technology and music, but more than anything rests on being live. The impending explosion of live events presents a huge opportunity for Live Nation. Harnessing the power of artificial intelligence to build a predictive, multi-dimensional ticketing tool will enable them to overcome its competition, erase its financial insecurity, and once again become the undisputed global leader of live entertainment.