A Walmart for Music-Brand Deals
Despite a well-publicized spat when Live Nation decided to take all its ticketing contracts in-house and away from Ticketmaster, the two camps appear to have kissed and made up. According to a story in last night's Wall Street Journal, the two companies are well on their way to merging into one mega "360" entertainment powerhouse.
There were so many interesting developments driven by Live Nation last year that, at one stage, we dubbed SFS "All things Live Nation." The concert promoter led the way with a number of ground-breaking "360 deals" that saw artists such as Madonna, Nickelback, Jay-Z, Shakira and U2 embrace totally new business models that incorporated touring, branding, sponsorships, recordings, publishing and merchandise all under one roof.
Looming rival Ticketmaster followed a similar strategy towards the end of the 2008 when it acquired "mega manager" Irving Azoff's Frontline Management, whose 80-strong executive management team controls the careers and revenue streams of some of the biggest names in the business -- i.e., The Eagles, AC/DC, Guns N' Roses, Christina Aguilera, Avril Lavigne and around 200 other acts -- in order to form Ticketmaster Entertainment with a similar objective of leveraging all artists' 360 revenue streams within the same company.
Aside from the obvious corporate intrigue and the massive personalities and egos of the management teams and their stars, the merger of these live music giants presents a potentially fascinating deal for brands. The combined company would put under one roof the ability to have a direct connection with fans through artists and multiple contact points such as ticketing, concerts and sponsorship activation, recordings and distribution of content, merchandising opportunities, celebrity endorsements and much much more. With the ticketing element now a key part, this partnership could take a whole new turn for brands, which will have access to vast amounts of data that can be mined for marketing purposes. Examples could include the profiles of who's buying tickets for particular acts and the relevance of that audience to the brand, what they feel about certain brands and products and their associations with music, what fans are spending on merchandise and associated products, regional skews and, in time, much more complex data mining that will take the whole accountability and effectiveness of brand partnerships to a new level.
As we've said before, the key for the newly combined entity would be for it to understand the brands' requirements, speak the brands' language and understand how the partnerships can help the brands as well as the artists. While I don't doubt that Live Nation/Ticketmaster will want to directly control as much of the interaction with brands as possible, there is a great opportunity here to partner with agencies and specialist entertainment companies who work with brands day in and day out and can help navigate and translate for both Live Nation/Ticketmaster as well as the brands themselves. If Live Nation/Ticketmaster gets these relationships and partnerships right, it could give more traditionally music-related media channels such as MTV, VH1 and Fuse a good run for their money. The new entity would also be a preferred one-stop-shop that's an awful lot better to deal with than going through traditional labels as the entry points to artists.