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Tuesday, May 12, 2009

Live Nations Response To Falling Attendance - Raise Prices

Did you ever notice what happens when fewer people are using a toll road because they're driving less? The income to the state goes down. Did you ever notice what the state does in response? It raises the tolls to make up for the shortfall! This is the automatic response from any city, state or federal government entity. Fewer people using the city parking lot - let's raise the price.

What most privately run businesses would do instead would be to give better service, provide added value or lower the price to get more people in the door (or as in our example, on the road or in the parking lot).

But here we have the giant concert promoter Live Nation respond to the 22% decrease in concert attendance by raising the prices!!???! These guys are so big they think they're the government.

According to CEO Michael Rapino during yesterday's earnings call, "With the reduced attendance expected throughout the year in North America, we knew driving more dollars from each fan was a key strategy. We believe we'll achieve this in two ways; first, through higher margins on food and beverage...that will be an outcome of our new concession deal with SMG Airmark which will increase profits by 10%."

"The second way we expect to drive per head is through a host of new onsite initiatives including reducing the items sold and focusing on the most popular, profitable increasing points of sale, portable hawking to sell food and beverages directly to the patrons in their seats, and finally increasing products and adding new products like souvenirs photos, early access passes and bundling to create incremental revenue," Rapino continued.

OK, so they want to raise the prices on the already over-inflated concessions (are we looking at the $12 beer?), and sell us more overpriced crap too?

Come on, people. Vote with your pocketbook. Just say no!! Stay at home and listen to your favorite artists on a CD, MP3 or DVD instead. Let them feel the pain the same way you're feeling it!

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