This Summer, Titans Will Merge

Pending final approval of a federal judge, the U.S. Justice Department has approved the merging of Ticketmaster Entertainment and Live Nation. The new company, to be called Live Nation Entertainment, represents a sort of live entertainment Voltron with a hand in virtually every segment of the business, from the operation of venues and ticketing to promotion and even merchandise.

There are some conditions to the merger, as Bloomberg BusinessWeek laid out yesterday. To even the playing field, Ticketmaster must license its ticketing engine to AEG Live, its largest customer and the second largest concert promoter after Live Nation. Ticketmaster also has to sell Paciolan, a ticketing company that it owns; Paciolan will likely go to Comcast-Spectacor.

Restrictions will be placed on the new company, designed to prevent anticompetitive bundling of ticketing services and concert promotions. These restrictions come with a prohibition on retaliation against venue owners that choose to go elsewhere for ticketing or promotional services. However, it is currently unclear whether these conditions will nullify- or except- existing long-term exclusivity agreements Ticketmaster holds with many major U.S. venues. These contracts were a large bone of contention when Pearl Jam went to Washington in the mid 1990s, yet ultimately no action was taken against them.

That concern notwithstanding, we find ourselves as skeptical of the consumer advocacy groups crying that the sky is falling as we are of Live Nation’s Michael Rapino’s claim that the playing field will be “broader,” or of Ticketmaster’s Irving Azoff’s claim that the Justice Department’s resolution is a “great win” for fans. Back in March of 2009, as rumors of the merger first began to spread, we talked about it with Nic Adler, the proprietor of our favorite independent local venue, The Roxy. Adler shrugged off the gloom and the doom; This new looming competition is not really competition at all to him, when he can give fans a show and two beers for $20 versus a $40 or $50 Ticketmaster ticket. Of course, this is in Los Angeles, and we’ll just have to wait and see how things will shake out in smaller markets with only one or two venues in the game.

Something every player in the music industry- from CEOs right down to the fans- should know by now is that the future comes whether you’re ready or not. One may cry about having to compete with free MP3s while another cries about having to compete with an invincible mega-corporation. These are two sides of the same coin, and as one of our heroes has sung, you can’t stop progress.

One thing that’s certain is that the major labels are, for the moment, out in the cold with their dicks swinging in the wind. While the Swedes were stealing their clothes, Irving Azoff was putting their cars up on cinder blocks. Venerable pundit Bob Lefsetz has said as much a few times over the past year, as the merger trudged along, most recently three weeks ago, when he asserted: “[Now you've] got a manager, with relationships with the tour promoter, you can license your music yourself, do you need a major label? The same labels who insist on a piece of 360 degrees of revenue, taking so much money for doing so little poorly?”

In our interview, Nic Adler suggested that perhaps an Interscope will team up with AEG to compete, and something along these lines has been effectively mandated by the Justice Department, if not by economics. Competitors will arise. Especially if ticket prices don’t go down as promised. The bottom line, and the reason we’re not jumping on TicketDisaster’s complain train is that it’s only convenience that hangs in the balance for us fans. For the labels, it’s the last frayed thread of a business model that may finally be truly obsolete.