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Case Study

Published on December 2016 | Categories: Documents | Downloads: 38 | Comments: 0
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The case study of Live Nation

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It has been a decade since piracy and the arrival of iTunes – which destroyed the notion of an album in favour of single, downloadable tracks – but the music business has found nothing to repair lost CD sales. The music industry has roughly halved in size since the last days of the CD-fuelled peak, when boy band *NSync's No Strings Attached album could sell more than 10m copies in 2000 – but the hope was that one day, digital sales would pick up the growth as CD sales – or "physical" sales, as the industry likes to call them – levelled off. However, in the US, from where all music business trends start, download sales growth has all but stalled, posting just 1% growth throughout all of 2012. Live nation is one of the few names among the music companies that has been doing well its business, it has been successful in promotions and has surpassed its rivals by par. It’s now the largest organiser of the events and live concerts. When companies were struggling for their existence Live Nation did well by changing the strategy and manipulated the situation in a far better way. They held concerts which people attended with fervour and enthusiasm; each year more than 49 million people attended their concerts and the events they conducted were 22000 in number much more than the rivals in the competitions in 2012. They believe that they are the largest live entertainment company in the world, connecting more than 250 million fans across all of our platforms to over 180,000 events in approximately 47 countries in 2012 Live Nation is providing its services all over the world with help of more than 6,000 full time employees and around 13,000 part time employees. The company has incurred $5.38 billion revenue in year 2011. Live Nation is promoting live entertainment through ecommerce. All ticketing and organisation of concerts worldwide is the main objective of Live Nation. Live Nation offers live entertainment through digital media and by e-ticketing facility. Michael Rapino the CEO of Live Nation clearly had other ideas of concerting, he roped in catchy singers and artists for his company made them to concert and achieved the success he is still reeling in. Madonna was the first to be signed for the company in October 2007. Signing U2 and Madonna to overpriced deals somehow beat the other concert promoters and it totally over shadowed. Madonna signed it for $120 million to let Live Nation handle every part of her business except publishing. Then

the company roped in Shakira, Nickel back and Jay-Z to similar sizable deals. The best thing about the company’s success is that Madonna, U2 and other leads are touring and concerting 2014 or 2015 with the 2007-08 or the year they have been signed. So this is one thing were their strategy is different from others. Furthermore they are planning to add few more superstars to their company to strengthen their roster and be overly- competitive in the market. Strategy The main strategy is to leverage our leadership position in live entertainment and our relationships with fans, venues, artists and advertisers to sell more tickets and grow our revenue, earnings and cash flow. They pay artists, venues and teams to secure content and tickets; they invest in the technology to advance our ticketing, ecommerce and mobile platforms; and are paid by sponsors and advertisers that aspire to connect their brands with our passionate fan base. They also continue to strengthen their core operations, further expanding into additional global markets and optimizing their cost structure. Their strategy is to grow and innovate through the initiatives listed below. • Expand Platform to sell more Tickets. Live Nation will build their fan base and sell more tickets by continuing to build our portfolio of global festivals, expanding our electronic dance music (EDM) festival and show base, selectively growing into additional top global music markets and further building our market share in established markets. • Drive Conversion of Ticket Sales through Social and Mobile Channels . Live Nation is focused on selling tickets through a wide set of sales channels, including social media and mobile, and leveraging extensive database they have built through www.livenation.com and www.ticketmaster.com to better reach consumers. • Grow Sponsorship and Advertising. Their goal is to continue to drive growth in this area and capture a larger share of the music sponsorship market. Live Nation will focus on expanding and developing new relationships with corporate sponsors to provide them with targeted strategic programs through their unique relationship with fans and artists, their distribution network of venues and their extensive ticketing operations and online presence. Michael Rapino accesses the market and works accordingly, he caters his company according to the best of the interests it can have. Recently he devised a plan to have food in all the amphitheatres within 100m of the venue so that the foodies enjoy the concerts as well as the food served; the serve is called the 360 meals furthermore he strengthened this market by overhauling the concessions in the humanely food. This change costs the company an extra $1 million a year but concertgoers won’t see that reflected in food or ticket prices. He believes the good that will be generated by serving better food and supporting local farms will be compensation enough.”That’s good for business in the long run and good for the environment and the animals in the short run”, he says Additionally, the company has brought on celebrity chef Hugh Acheson as a consultant to help guide the changes. Acheson, an outspoken proponent of local and sustainable agriculture, is best known for appearances on Bravo’s top chef and “Top chef Masters”. He says he is fascinated by the challenge of providing ethically sourced food on such a large scale. So these strategies have really been swanking Live Nation and getting in the concertgoers at regular bases. Maintaining this constant and ever- loving fans of live concerts is what Live Nation thrives to do and so far it has been successful in doing so. Discussion Questions 1. What growth strategy does Live Nation appear to be using? What competitive advantage do you think Live Nation has? Answer: - Live Nation has been successful in roping in some of the lead celebrities in the market; Madonna was signed in for $120 million in 2007 and now when she will be performing in 2014 the company will pay her according to the contract of 2007. So this has been a boon for the company. Inflation has risen by several heaps but paying the price of 2007 is something inevitable. Also the catchy systems as in food, salad and other cuisines being available to

concertgoers at a low rate also maintains the rate of people coming. Besides there are mainly few companies in music which are so far good, rest have had severe losses and shut down. Also CEO Michael Rapino suggests of having some other celebrities to a already list of five or so. These strategies help the company to be overly-competitive in the market. 2. How SWOT analysis is useful to Michael Rapino?

Answer: - SWOT analysis can be beneficial to Michael Rapino in overhauling the over-all structure of the company, and raise it from highs to the highest. It does have pronouncing effect on any company, and here too it can prove decisive among different companies. The strengths, opportunities, threats and the weaknesses the company is undergoing prove incisive in shaping the future of a company. Live Nation has one of the best e-commerce websites of entertainment; it also thrives on audience oriented moves as in the 360 deals has been a recent success generating huge revenue from the concerts. But the company’s success wholly depends on the success of the live concerts; one failing can give them tremendous losses. Piracy has inculcated in the society for so long so the artists are compelled to concert so Live Nation can rope them in to their enhance their already self applauding character. Also there are emerging markets as in China and India which are yet to be explored by the live concerts of Warner entertainment and Live Nation, so exploring these markets will definitely be in the goodbooks of the companies. Live Nation is the merger of different brands, so the process whether legal or legitimate slows down unless the permission is granted by all the signatory authorities, this can pose threat to Live Nation. As in if any of the mergers can leak the internal affairs of companies as they are independent in conditions like that. 3. Find Live Nation’s annual current annual report. What goals is the company pursuing? What strategies is it using? Do its strategies appear to be helping it reach these goals? Answer:- Live Nation is the largest live entertainment company in the world, connecting more than 250 million fans across all of our platforms to over 180,000 events in approximately 47 countries in 2012. They believe they are the largest producer of live music concerts in the world, based on total attendance at Live Nation events as compared to events of other promoters, connecting nearly 49 million fans to 22,000 events for over 2,300 artists in 2012. Globally, Live Nation owns, operates, has booking rights for and/or has an equity interest in 139 venues, including House of Blues ® music venues and prestigious locations such as The Fillmore in San Francisco, the Hollywood Palladium, the Ziggo Dome in Amsterdam and the O2 Dublin. Their reportable segments are Concerts, Ticketing, Artist Nation and Sponsorship & Advertising. Prior to 2012, they reported an ecommerce segment, which is now included in our Ticketing and Sponsorship & Advertising segments. 4. What do you think of Rapino’s strategic direction for Live Nation? Answer:- • Expand Platform to sell more Tickets. Live Nation will build their fan base and sell more tickets by continuing to build our portfolio of global festivals, expanding our electronic dance music (EDM) festival and show base, selectively growing into additional top global music markets and further building our market share in established markets. • Drive Conversion of Ticket Sales through Social and Mobile Channels . Live Nation is focused on selling tickets through a wide set of sales channels, including social media and mobile, and leveraging extensive database they have built through www.livenation.com and www.ticketmaster.com to better reach consumers.

• Grow Sponsorship and Advertising. Their goal is to continue to drive growth in this area and capture a larger share of the music sponsorship market. Live Nation will focus on expanding and developing new relationships with corporate sponsors to provide them with targeted strategic programs through their unique relationship with fans and artists, their distribution network of venues and their extensive ticketing operations and online presence. Michael Rapino accesses the market and works accordingly, he caters his company according to the best of the interests it can have. Recently he devised a plan to have food in all the amphitheatres within 100m of the venue so that the foodies enjoy the concerts as well as the food served; the serve is called the 360 meals furthermore he strengthened this market by overhauling the concessions in the humanely food.

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