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The pullback in consumer spending hasn't yet hurt the concert business. Live Nation (NYSE:LYV) put on 17 percent more concerts in the past quarter and concert attendance rose 5.7 percent. Live Nation, the nation's largest concert promoter, reported strong earnings after the bell on Friday—its third quarter profit more than tripled to $139.9 million, on strong performance, the gain from selling its motor sports division and a tax benefit.

Looking just at continuing operations, earnings were $1.41 per share, up from 55 cents per share in the year-ago period. Revenue was up nine percent from the year ago period to $1.59 billion, but a bit less than analysts expected.

Still, Live Nation stock traded down in Friday's trading—finishing the day down more than 10 percent. Investors are clearly concerned that the downturn in consumer spending means the concert business will fall off a cliff. I had an exclusive interview with Live Nation CEO Michael Rapino who is more optimistic.

By Live Nation's estimates, the average concert-goer goes to about one and a half concerts a year. They are determined to see their favorite performers and they make it a special occasion, and a priority. Rapino cited Thursday night's Madonna concert in Los Angeles, which was packed, and Coldplay and AC/DC tickets selling out quickly.

The big test for Live Nation will come next year when it breaks off from Ticketmaster (TKTM), currently its partner, and becomes Ticketmaster's competitor, selling tickets itself and attempting to change the concert ticket landscape. Live Nation is slowly accumulating exclusive deals with different concert venues, including last month, the Roseland ballroom in New York. The real question is whether a vertical model for the music business makes sense—Live Nation has deals with big stars including Madonna, U-2 and Jay-Z to handle all their business from concert tours to recording. We'll see if this approach to the music industry can flourish despite the fact that traditional music sales have been tanking.