Live Nation Profiteering
COVID-19 for the most part crushed businesses and the economy. Alternatively, it has actually boosted some companies (so called stay-at-home winners) such as Netflix and Zoom.
While those companies cannot be blamed for the situation that has benefited them, there can be another darker side of the crisis with companies being opportunistic in poor taste. That is where Live Nation recently finds itself.
It is no surprise that the live event industry has been one of the hardest hit by the pandemic’s shutdowns. Live Nation like other companies in the industry was thrust into an unenviable position to claw out of. The quickly received flak for some of their responses starting with their handling of ticket refunds for postponed and cancelled events. Class action lawsuits have been filed over the matter.
Recently though Live Nation has shifted from annoying fans to receiving the ire of the artists they work with. First the company sent a memo to artists announcing 20% cuts to artist fees in 2021 due to the pandemic. Taking it a step further, they also are placing much of the penalty burden on artists for delays and cancellations.
Part of the reason Live Nation likely feels they can get away with this is due to their large position in the music and venue industry. While smaller independent venues continue to go out of business from the shutdown, Live Nation only gets stronger if it can weather the storm. It already dominates the venue market, and independent venues disappearing only improves their position.
Due to this, it is not hard to see Live Nation’s memo and new policies towards artists as an attempt to profit from the situation that is growing their leverage. Artist groups are appealing to Congress to investigate Live Nation’s monopolistic behaviors. They are also urging artists to seek out venues other than Live Nation ones, however that should have minimal effect since Live Nation’s dominance is the problem.
While the negative press for Live Nation due to these actions is undesirable for the company, it must have anticipated it happening. The fact that Live Nation nevertheless went ahead with policies that hurt both sides of their marketplace (the fans and artists) sheds an enormous light on the dire straights that the company is likely in due to the crisis. Things cannot be good when they are grasping for cash left and right.