Blockbuster / Live Nation Ticket Deal: Win-Win

Blockbuster (BBI) wants to be your entertainment superstore. They’ll sell you electronics, rent you a movie or now, even get you into a concert.

Tuesday, Blockbuster and Live Nation (LVY) announced a three year deal to make Blockbuster the brick & mortar retail outlet for Live Nation’s soon to be launched concert ticket service. 500 stores in cities home to Live Nation-operated venues will take on the new sales task.

Live Nation is the world’s largest concert promoter, putting on more than 16k shows in a given year. With a vertically integrated business like none other in the sector, the company bills itself as “the future of the music business.” Ticket sales are that ambitious boast’s foundation. CEO Michael Rapino has called the concert ticket the company’s “most important asset.”

In September, Live Nation fortified future inventories with the signing of rival Ticketmaster’s (TKTM) second biggest venue partner, SMG, to a ticket sales deal (Live Nation has been Ticketmaster’s top partner). The one thing Live Nation hasn’t had a solid grasp on was a brick and mortar retail ticket footprint to expand consumer access. The new partnership with Blockbuster will provide that.

The deal may serve Blockbuster equally well. CEO Jim Keyes has said the company’s future success depends on making the company a “destination for entertainment.” To that end, he’s steered it down a path toward hybrid outlets that marry broader retail offerings with the entertainment products they’ve historically rented and sold.

Last spring, Keyes believed in the approach so much, he was ready to hitch the company’s hopes to a questionable buyout of Circuit City. Luckily, the ill-fated marriage was ditched before it was consummated.

If you buy into Keyes' strategy, Live Nation is a much better partner. They offer a product that is far more exclusive, something that will drive traffic to Blockbuster in a way being just another electronics retailer never could.

Keyes says the agreement could drive “hundreds of thousands of customers to [Blockbuster] stores."

The fees added to ticket prices once the Live Nation service begins haven’t been disclosed but are expected to be more modest than the per ticket tariffs Ticketmaster adds on.

Live Nation tickets will begin selling in January.

Comments

[soundoffwit...:]

The ticket fees have not been more modest than Ticketmaster, as suspected in this article. I've broken it all down. See my full analysis here...

soundoffwithdave.com/2.../

Jan 17 08:59 PM