When the gods battle above, mortals tremble below.  That about sums up what’s taking place in the upper reaches of the concert touring industry at the moment, as Zeus (a.k.a.  Live Nation) mixes it up with Jupiter (a.k.a.  AEG Presents, formerly AEG Live).  As of earlier this year, the U.S. Department of Justice is looking into a range of serious accusations leveled against Live Nation, the world’s largest concert and events promoter, by AEG Live, the globe’s second-largest presenter of live music and entertainment events. 

The dust-up reads like a story arc from The Sopranos: AEG alleges that Live Nation retaliated against venues that chose not to contract with Ticketmaster, the ticketing service that Live Nation acquired in 2010, by routing the tours they promote away from those venues, an allegation that Live Nation denies.  Live Nation, according to The New York Times, “has used its control over concert tours to pressure venues into contracting with its subsidiary, Ticketmaster.”  The AEG venues in question include those in Atlanta, Salt Lake City, Oakland, Minneapolis, Louisville and Las Vegas, which could lose desirable concerts and other touring shows as a result of the re-routings. (“ Nice arena you got here.  Be a shame if something were to happen to it…”) If true, that would be a possible violation of antitrust law, as well as of the DOJ consent decree signed by Live Nation in 2010 as a contingency of the Ticket Master merger that expressly forbids Live Nation from forcing a client to purchase both talent and ticketing. 

The Times article noted one specific incident that alleges that Matchbox Twenty’s 2013 tour did not stage a show in AEG’s Gwinnett Center in Atlanta because the venue was using a ticketing service controlled by AEG. ( AEG has its own ticketing subsidiary, AXS.) 

 Big Money Gets Involved

These are highly capitalized companies — Live Nation’s market cap was a smidgen over $8 billion in April after brushing $10 billion earlier in the year, with its stock price near an all-time high of over $48; privately held AEG Presents doesn’t disclose its core numbers, but is estimated to be roughly in the same ballpark as Live Nation.  The big differences between them is Live Nation’s diversity of music industry-centric revenue sources, including artist management — it reps 500 artists, including U2 and Miley Cyrus — as well as concert production, whereas AEG Presents is more deeply invested in ownership of venues and related real estate.  For instance, the company’s stake in the under-development Nashville Yards project includes a 4,000-capacity music venue, a 240-room boutique hotel, a flagship Regal Cinemas luxury theater and a 700-capacity live entertainment club. 

Nonetheless, both companies’ executive suites are heavily populated by veterans of the legacy music industry, from both the recording and the live sides, and they trade players like aggressive sports teams — just this year, Rob Hallett, former president of international touring for AEG Presents, joined Live Nation, where he’ll likely work in a similar capacity.  It’s still the tightly interconnected business it was in the industry’s golden age 40 years ago, and as streaming continues to move recorded music into a virtual environment, expect live music to become an even more intense battleground. 

 What’s Next? 

This particular skirmish between the two biggest forces in live touring will likely be just one more of many, as both companies grow in reach and inevitably jostle each other in the process.  The collateral effects on the trenches of touring may be relatively minimal — a tour’s choice of SR provider and related decisions are still mostly in the hands of the artists and their teams — but the continued growth of the concert business is inflating both companies’ assertiveness.  This is reflected in the increased scale and complexity of the productions they underwrite and otherwise support.  For instance, Beyoncé’s performance at this year’s Coachella festival (which is owned by AEG) was compared to a Super Bowl halftime spectacle, with an estimated 100 dancers, singers and musicians onstage with her. 

For now, this is nothing but business as usual for sound and other tour-service vendors.  That is, until one or the other or both of them decide that owning more of the infrastructure of touring makes financial sense.  It would not be surprising to see Live Nation or AEG Presents target a leading SR provider, or a lighting or video company, for that matter.  Sure, for now, artists are in charge of the decisions around staging, but they used to have a deciding vote on other aspects of touring that are now made for them.  If that were to happen, it could be in part because of live sound technology’s own success: every brand has the technology and sonic wrinkles it feels it needs to set itself apart, but the reality is that, overall, the major brands are all at a very, very high level of sonic quality and performance.  Most people — even professionals — would be hard pressed to tell one touring system from another, either from the stage of from row WW of the upper balcony.  The same goes for FOH consoles, though perhaps to a somewhat lesser extent, in a category where sonic nuance is a bit more detectable.  But the bottom line is, vertically integrating touring technology into either of these behemoths’ business models would be a major change, but it wouldn’t be a major challenge. 

It would, however, be a considerable challenge for the SR business and its cousins in lighting and projection.  It would immediately put the two largest concert producers in competition with systems providers, and likely hasten the consolidation process between those vendors.  We’ve been seeing just that happen on the installed AV side for several years, as large-format systems manufacturers and retailers, such as Panasonic and Sweetwater, have been acquiring AV integrators.  The live-event industry and the vendor community that surrounds and supports it are at a high point of activity even as more pro audio brands enter the market, roiling competition and an increasing price pressures.  It’s fertile ground for disruption. 

We’re in an environment in which Walmart (where you buy lawnmowers, T-shirts and tires) may also become one of the country’s largest healthcare and insurance providers by year’s end, if its acquisition of Humana goes through.  That’s about the same time that Disney may end up owning television and film giant Fox.  So the idea of Live Nation or AEG Presents owning a sound, lighting or video company may be a scenario that the live-sound business may have to confront sooner rather than later.