Live Nation cuts service fees for June
Dave Matthews Band, Jonas Bros., Kings of Leon includedNASHVILLE -- Live Nation will roll out a massive price promotion this week, No Service Fee June, which will eliminate service fees on nearly eight million tickets, more than 700 shows and 110 artists.
"Every show, every ticket, every artist, every amphitheater we own will have no service fees in June," Jason Garner, CEO of Live Nation's concert division tells Billboard.biz. Among the artists included are Dave Matthews Band, Jonas Brothers, Jimmy Buffett, Kiss, Kings Of Leon, Ozzfest, Phish, Rush, Tim McGraw, Tom Petty & the Heartbreakers and many others.
The June promotion follows last summer's heavy discounting, including No Service Fee Wednesdays, which ran for 10 weeks. Garner says last summer's promotional efforts moved 800,000 incremental tickets, addressing an industry-wide problem of unsold inventory.
"You start from the premise that 80% of shows don't sell out and 40% of all tickets go unsold," Garner says. "[Live Nation CEO] Michael [Rapino] has been challenging us, and we've been challenging ourselves, on how do we sell more tickets? How do we really fulfill our promise to artists of 'let us promote your shows, choose us to connect you to your fans, and we'll sell more tickets for you than anyone else.'"
Despite last year's economic downturn, average per-show gross and attendance in North America were up 7.6% and 8%, respectively, according to Billboard Boxscore. That was the first time average attendance has outpaced gross in more than a decade.
"Last year, with No Service Fee Wednesday we achieved how to get incremental fans into the venues," says Garner, who adds that internal customer research indicates that fans "overwhelmingly" preferred the no service fee promotion to other discounts.
Garner says overall the promotion will save fans about 20% for reserved seating and about 25% for lawn seating, about $12-$13 off the average ticket price. Given that service fees are a significant revenue stream for Live Nation as venue operator and promoter, the promotion begs the question: Will ancillary revenues from increased ticket sales will offset the lost revenue from eliminating fees?
"The goal is to fill every seat this summer. We know if we do that, we win, the industry wins, the artists win and the fan wins," Garner says.
Last year Live Nation's critics said such promotions encouraged fans to wait for discounts, among other criticisms. Garner expects that this year's campaign will have its critics, as well.
"When somebody does come up with something like we did last year, waiving our own money to make sure that we could get more fans in the door, then all of a sudden all the naysayers came out," Garner says. "While I'm sure there will be [some] negative voices in the industry who will have something to say about this, I guarantee not one fan will say 'oh, darn, I wish I could have paid a service fee in the month of June.'"
Despite rampant industry talk that ticket sales are slumping this year and the cancellation of several tours and shows, Garner says the sales pattern this year is similar to other summers. He says no one is panicking at Live Nation and a major promotion was always planned for this summer, rather than a short-term reaction to current sales.
Garner says that Live Nation research indicated that 52% of fans that bought on No Service Fee Wednesday last year said they weren't coming to the show without that discount. "Once you have that fact in your head, it's hard to say 'I'm not going to figure out something else to do to help encourage more fans to come,'" he says. "When you have unsold inventory your job is to figure out how to sell that inventory and price is one of the ways you do that."
Tickets for No Service Fee June are available only at LiveNation.com begins today will remain in effect until 11:59 p.m. ET on Wednesday, June 30.