Consumers are being squeezed by everything from high food prices to high rents and mortgage costs — but they're not giving up on live music.
Two years after the concert industry rebounded in the wake of the COVID pandemic, Live Nation had another record second quarter. Revenue rose 7% to more than $6 billion, while adjusted operating income (AOI) rose 21% to $716 million. North America was particularly strong, with fan attendance up 17% and theater attendance up nearly 40%.
This followed a record first quarter in which Live Nation had revenue of $3.8 billion, up 21%, and AOI of $367 million. A notable hiccup during the second quarter was an antitrust lawsuit brought by the US Department of Justice in May, although that did not affect business and will take years to go through the courts.
During Tuesday's earnings call, CEO Michael Rapinoe and president/CFO Joe Berchtold gave analysts and investors their thoughts on recent tour cancellations, expectations for the second half of 2024 and beyond, and Live Nation's long-term growth rate.
Cancellations are “in line” with historical trends
Some recent high-profile tour cancellations and weaker-than-expected festival sales have some wondering if the live music business has bitten off more than it can chew. Coachella ticket sales were slower than usual, as were those for JazzFest, Beach Life, Welcome to Rockville and Governors Ball. Live Nation has had two high-profile tour cancellations in recent months: The Black Keys and Jennifer Lopez.
But Live Nation, the world's largest promoter, sees nothing out of the ordinary, Berchtold said. Cancellation rates “historically run around 4%-5% of shows [and] about one and a half percent of fans,” he said, and this year's cancellations are “[a]completely in line with historical trends. I think most of the reports we've seen have been attempts to get one or two data points from a very large number of tours and shows, and we just don't see anything out of the ordinary there.”
“Continuous growth” in the second half of 2024 and 2025
Berchtold said Live Nation expects to see “continued growth” in fan attendance in the second half of the year. Year-to-date ticket sales for 2024 concerts are 118 million, according to Tuesday's earnings call, higher than in 2023. Sales for arenas, auditoriums, theaters and clubs are in double digits.
As for 2025, Live Nation expects more stadium shows than two years ago. This year, a slowdown in stadium performances was caused in part by the Paris Olympics, which shut down “most of France” for a month, Rapinoe said. Amphitheater shows provide better margins and high spend per fan, but more stadium shows means more ticket sales in late 2024 than tour sales and higher gross transaction values. “A stadium show is three times the number of bands and three times the average ticket price of an amphitheater show,” Berchtold said.
Driving 10% growth over the long term
After a bump in 2022 and 2023 from pent-up post-pandemic demand, Live Nation is settling into a steady, long-term growth rate of 9%-10% per year. The necessary trends are there, Rapino said: market globalization, artist supply, consumer demand, fan experience and favorable economic factors. Just don't expect growth to continue after the pandemic. “We never predicted that the industry would grow at 30% per year in the future,” said Rapino.
