Q2 was a lousy time to be in the live events business, as Live Nation's recent earnings report demonstrates. Worldwide stay-at-home orders pretty much closed the doors on concerts, raves, festivals, sporting events and any other large public gathering, and Live Nation saw its revenues drop by an astonishing 98 percent year over year.
That’s a big blow at a tough time of year: Q2 is historically prime sales time for Live Nation, as artists gear up for summer tours and festival and concert season starts spinning up in the Northern Hemisphere. The company only brought in $141.8 million in Q2 compared to $2.6 billion a year earlier.
To make matters worse, Live Nation also posted a negative $86 million in revenue for ticketing, created by the scores of refunds it had to issue to concertgoers whose events were canceled. By contrast, ticketing revenue clocked in at $371 million at this time last year.
Despite the hurricane-force headwinds, Live Nation did say the quarter contained a few bright spots. For example, 86 percent of ticket buyers elected to hold onto their tickets for rescheduled shows rather than requesting immediate refunds.
Moreover, the firm reported that it has already sold 19 million tickets across 4,000 festivals and concerts for 2021, proving that consumer enthusiasm for live events hasn’t fully been killed off by COVID-19.
“Our expectation is that live events will return at scale in the summer of 2021, with ticket sales ramping up in the quarters leading up to these shows,” Live Nation President and CEO Michael Rapino said on the company’s earnings call with analysts. “And partly, we remain confident that fans will return to live events when it is safe to do so. Our strongest indicator of demand is that fans are holding onto their tickets even when given the option of a refund.”
Rapino also cited Live Nation’s efforts to make a digital pivot and adapt live events to “virtual” ones. He said virtual concerts took off on the platform during Q2, with 67 million fans streaming some 18,000 concerts and festivals globally.
Given the tremendous success of events like the recent virtual Lollapalooza festival, Rapino affirmed that Live Nation is now seeing the potential for live streaming to become a “long-term component of our concert business, allowing fans in other cities or those who can’t attend to enjoy the concert as well.”
But staggering headwinds aside, Rapino said he believes fans will eventually return to live events.
PYMNTS’ consumer survey data is on his side. Some 54.2 percent said they missed attending leisure events like concerts. That trailed only seeing friends and family and eating out in restaurants as the top activities that Americans miss.
But our surveys also show that consumers remain nervous about the health consequences of getting back to the physical world. A notable share is uninterested in giving up their digitized lifestyles in favor of getting back to their physical ones any time soon. They also show that a COVID vaccine is the silver bullet that it will take to get consumers out and about again.
Still, Live Nation says it’s ready to ride out 2020’s quiet period in anticipation of a better 2021.
“We are well-positioned to weather this crisis and we will get through this,” Rapino said.