NEW YORK (AdAge.com) -- The recession may have claimed domestic autos, apparel stores and luxury goods as its first victims, but what about the $100 concert ticket? As early sellouts for hot tours such as U2, the Jonas Brothers and Phish continue to prove, live music has yet to be cut out of consumers' discretionary income, nor have pricey "VIP packages" that run as high as $350.
According to grosses reported to Billboard Boxscore, global ticket sales were up almost 13% in 2008 over 2007, totaling just under a record $4 billion worldwide. Average North American box-office gross, however, was up 18% and average attendance was up 6.3%, a sign that hiked prices on top-grossing tours such as those of Bon Jovi, Madonna, and Bruce Springsteen and the E Street Band helped contribute to record revenues. Live Nation played a big part of that growth, with attendance up 12.2% to 52 million attendees, and revenue per attendee up 0.3% to $78.34, helping the company log a total of $916 million in concert revenue in 2008. And there are no signs of slowed momentum for blockbuster tours such as U2's, which sold more than 2.5 million tickets in Europe and North America in just a few days.
But Seth Matlins, 45, the first global CMO for Live Nation, wants music fans to view concerts as not just a seat at a show but as exclusive access to merchandise, community and, soon, the artists' albums.
Mr. Matlins came to Live Nation in February, a time of major transition for the global entertainment company. CEO Michael Rapino had just announced his intentions to merge Live Nation with Ticketmaster, the country's No. 1 ticket site, weeks after relaunching LiveNation.com as the exclusive ticket vendor for all Live Nation concerts. The company was also in the midst of signing up artists such as Shakira and Jay-Z for unique "360 deals," in which Live Nation will have exclusive ownership of the artists' ticketing, merchandising and music-distribution rights.
As Live Nation will act as both concert promoter and record label for some of the country's biggest superstar acts, Mr. Matlins will have dual responsibilities to both broadly market the value of the concert experience as well as the unique opportunities only Live Nation artists, venues and marketing partners can provide the music fan. It's a broad job description, but one markedly similar to Mr. Matlins' previous role as a brand agent at Creative Artists Agency, where he advised clients such as Coca-Cola and Motorola on ways to add live and filmed entertainment to their marketing plans.
But just as his target consumers are working with a newly limited income, Mr. Matlins will have to be similarly thrifty to promote an entire industry, working with an annual marketing budget worth $170 million, an amount the average movie studio shells out for its summer blockbuster slate alone. And that's often without much outside help. Live Nation creates and buys most of its media in-house, with an occasional collaboration with [email protected] on some of its digital creative.
Ad Age spoke with the new Live Nation CMO about the value of live music in a recession, the role his company will play in the future of music distribution and why the economy has changed the differentiation between "want" and "need."
Ad Age: As the box office receipts at the movies continue to prove, consumers are still investing in entertainment, and live music was no exception either in 2008. How do you plan to market that value as consumer spending continues to tighten heading into the summer concert season?
Mr. Matlins: Our objectives are to get more people to buy more tickets and more stuff more often -- to make them a part of the experience. And part of what we need to do is make "live" more differentiated and more top of mind. Chief among the things we can do are to make it both more special by enhancing the experience and the pre- and post-window in which we engage the fan in the artist experience and with the artist.
We want to make sure on Friday night, when more people are sitting around saying, "What should we do tonight? This is playing here, or we could Facebook that or 'Guitar Hero' this or 'Rock Band' that," we want them to ask, "What's at the Wiltern? What's at the Fillmore?"
Ad Age: In some ways, your marketing goals are similar to that of a movie studio's in terms of enticing consumers to buy tickets to an event at a certain time and place to drive revenue. How does your marketing model differ?
Mr. Matlins: The motion-picture marketing model typically has three stages, or three acts, much as the film itself, and it evolves over time. And they accomplish 95% to 100% awareness. We don't have those benefits because we don't have those resources. So we have to continue, as all marketers do, to be as precise as possible, efficient as possible and as aggressive as we can in demanding a return on investment for our allocated marketing resources.
Ad Age: Is branding Live Nation as a company a priority for you, given your venue ownership and exclusive relationships with artists like U2, Jonas Brothers, Nickelback and Madonna?
Mr. Matlins: It's on the near-term list of to-dos. Nobody goes to see a "Live Nation" show. We are defined by the shows we put on, and since we put on 22,000 shows a year, it's all about the musician and the music.
Ad Age: Because of your limited marketing budget and resources, how will you use fans and marketing partners to cut corners?
Mr. Matlins: What we will always do is continue to optimize the efficacy of our spend. In our business a lot of that's driven at the local level. We will continue to look for ways to reach and influence our artists' audience in ways that don't necessarily require a traditional media spend.
And what we've learned from the success of the Obama campaign is the bottom-up model. Our messaging will become more interactive, more illustrative, not just of the who, what, where but the why. One of the things we're working on is what we're calling an affiliate system where we provide access to the experience and the audience and the other marketers who work with us.
Ad Age: You seem to be marketing live music less as a product and more as a service. How do you differentiate the two?
Mr. Matlins: Most of us are in the service business. I began my career as the third person in the marketing department at Evian when it really was just a bicoastal brand in New York, Los Angeles and had a little bit of business in San Francisco. We were the fastest-growing brand in the supermarket, selling the world's most generic commodity at a super-premium price. And in that you learn you'd better not be selling the product; you learn about story and image and identity, and how identity is converted to a brand. So for us now and for me in particular, it's about brand association. The ticket is not a product, it is a service. It is a service to that fan's desire to connect, desire to escape, desire to party, desire to be part of a community. We are in the business of servicing that want.
Ad Age: Isn't "want" a risky emotion to market in today's economy?
Mr. Matlins: Emotion is more important than ever today, but that differentiation between want and need and where they diverge and converge is tremendously important. ... There are some discretionary categories we're seeing in this economy ... where a reassessment is occurring of what's important and what's needed. We're seeing it across demographic distinctions in our society. When it comes to escape, a good time, something that I will carry with me, "want" has only gotten more important.