Live Nation's Second Quarter 2023 Earnings Call began with John, the conference operator, welcoming everyone to the call. Joe Berchtold, the President and CFO, then took over and discussed the changes to the earnings release, providing more comprehensive and data-driven numbers. Amy Yong reminded the participants of the forward-looking statements and non-GAAP measures that may be discussed during the call. Michael Rapino, the President and CEO, and Joe Berchtold will then take questions from the participants.

Joe Berchtold of Live Nation reported that the confirmed show count for the upcoming year is up from the same time last year, indicating that attendance should increase accordingly. He also noted that the company's formula for growth includes increasing attendance, per fan profitability, sponsorship, and ticketing.

Michael Rapino and Brandon are discussing the strong growth of the year, with a 46% fan growth in international markets and 8% in North America. They expect to see double-digit fan growth in Q3 and for the full year in North America. The pipe for next year is the most important thing for them.

Joe discussed how the live music industry is expected to experience a surge in growth over the next several years due to a combination of global artists, consumer demand, and acquisitions. He also discussed the potential impact of student loan payments on consumer spending, noting that some of the company's comps may be skewed toward this cohort. He concluded by expressing confidence that consumer spending will remain strong in the back half of the year and into next year.

Joe Berchtold explains that the tailwinds from experiences such as amphitheaters outweigh any potential headwinds from student loan payments. He adds that they are seeing high single-digit increases in attendance per show, and that the marginal fan is continuing to spend a lot when they show up. Stephen Laszczyk then asks about Concert segment margins, to which Joe explains that ALM margins were up year-over-year in the second quarter, despite the mix of the slate towards stadium and arena this year.

Joe Berchtold discusses the voluntary all-in pricing initiative, noting that the reception from fans, clients, and lawmakers has been overwhelmingly positive. He explains that the initiative is beneficial for consumers as it allows them to get an all-in price upfront. He also discusses the potential demand impact for shows at their venues and third-party venues, noting that it may optically appear as if prices are being raised.

Joe Berchtold explains that the $300 million growth CapEx is mostly concept-driven, with 75-80% of it going to the concert side. This includes tactical improvements across a broad set of venues, such as new bar designs and additional points of sale, as well as CapEx refreshes when renewing leases. This is expected to help generate higher APF levels and returns on the investment. International locations are also part of the Venue Nation pipeline.

Joe Berchtold states that the company is on track to reach $300 million in fee-bearing tickets this year, with 7% growth from the previous year. Ticket growth in the first half was 22% year-over-year. When discussing the ticketing margin, Berchtold reiterates that it will be in the high 30s for the full year, implying a mid-30% margin in the back half.

Joe Berchtold and Michael Rapino discuss the company's strategy on global business and how it has not changed over the years. They mention that artists have been unlocked globally and that consumers, thanks to social media, are driving global consumption. They also mention that the company has 100 offices in over 40 countries and that they have been on this march for a long time. Peter Supino then asks if the company can productively spend more money on technology to solve some of the issues with bots and scalpers, to which Michael Rapino does not give a direct answer.

Joe Berchtold discusses the opportunity for growth in international markets for artists, as well as the efforts to combat ticket bots. He also speaks to the digital ticketing process and the potential to harvest and drive better returns from the information gathered from it.

Digital ticketing is becoming increasingly more popular, with barcodes being replaced by "safe ticks" that cannot be counterfeited. Ticketmaster is using the data it receives to help clients price their shows, market their shows, and predict demand for tours. With respect to Platinum, artists are the ones who set the price, and there is no pressure to increase the cost.

Platinum allows artists to maximize the value of their tickets by pricing the front of the house closer to market value while also bringing down the price of the back of the house. This has become increasingly popular in North America and is starting to be adopted in international markets, although there is still a gap between the average secondary pricing and the pricing of Platinum tickets. This method of using Platinum tickets helps the artist reach their desired gross while also ensuring that every fan can afford to buy a ticket.

Ticketmaster's primary focus is selling primary tickets, with secondary ticketing making up a low to mid-teens portion of their GTV. To better serve fans, Ticketmaster has made sure to provide an option to buy legitimate secondary tickets when shows are sold out, as this ensures they are better off being served within the Ticketmaster ecosystem.

Joe Berchtold explains that the average ticket price for amphitheaters, theaters, and clubs is generally below $35, and this is due to artists wanting to make sure that all fans can get in to see their show. However, due to rising costs, some of the closer in parts of the house have increased ticket pricing, leading to an overall increase in Ticketmaster, GTV, and number of tickets sold.

Michael Rapino explains that there has been no slowdown in terms of sponsorship business and that 900 different sponsor brands have been evenly distributed. He states that brands have shifted some of their dollars from other categories to the event space in order to get direct consumer interaction. Rapino believes that this trend will continue as brands are trying to figure out how to connect with consumers in a digital world. He believes that there will be more growth in the category due to the opportunity to hit consumers at scale.

Michael Rapino discusses the global playbook of entering markets at a low cost and building up a flywheel of content, sponsorship and ticketing. Joe Berchtold explains that OCESA's outperformance is due to a strong set of regional shows, as well as their festival business doing well.

Michael Rapino explains that their partnership with OCESA in the Latin market has yielded an incredible return due to the combination of their expertise, the market dynamics, and the archaic ticketing platform being upgraded with the help of Ticketmaster. He also mentions that they are able to offer global sponsorships to brands, providing them with exposure in North America, Europe, Rio, Sao Paulo, Mexico City, and Milan.

Joe Berchtold addresses the issue of the November on-sale, which was caused by two vectors of attack. The first was a large number of bots attempting to crash the verified fan system, which slowed down the fan experience but did not crash the system. The second vector of attack caused the system to stop. Berchtold states that upgrades have been made to ensure the same situation does not occur again.

Live Nation fought off a cyber-attack in five hours and was able to sell 2 million tickets that day. Joe Berchtold explained that the acquisition of Clockenflap in Hong Kong was part of a broader strategy to expand Live Nation's presence in Asia, through local promoters and festivals, and to tie in with their sponsorship team.

Michael Rapino discussed the importance of the Pacific Rim region for Live Nation's global business, highlighting the success of their operations in Korea, which has been a foundation for their promotion of artists and venues around the world. Live Nation is looking to expand their presence in the Pacific Rim by adding more promoters and venues, and they plan to continue driving content in the region.

This summary was generated with AI and may contain some inaccuracies.