The Music Man: A Q&A with Live Nation CEO Michael Rapino

Last year's acquisition of Musictoday was part of a larger transformation within Live Nation, the biggest concert promoter in the business. Here, Rapino discusses how the company has been changing its tune -- and the concert experience -- since spinning off from radio giant Clear Channel in late 2005.

How has Live Nation changed its focus?

Our mission is no longer limited to the two-hour concert. It's about taking that two-hour experience and turning it into a 12-month relationship. There's so much around the show itself that we realized we should be selling: a photo at the show, song downloads, the concert poster. We realized we should be selling this stuff not just to the people who went to the show but also to fans who didn't make it there. We need a portfolio of businesses to offer these products and services around the concert ticket.

That's where Musictoday comes in?

Exactly. Before, when I was chasing artists and tours, it drove me crazy that I was putting up money to get tours only to have artists say, "We're going to use Musictoday to run our fan club and do our Web strategy and do the ticket presale on our site." I thought, Geez, we're taking the risk on the tour, We'd like to sell those new products. Now we have the conversation with someone's agent or manager and say, "And of course we'll use Musictoday for this." There isn't a manager or agent of substance who doesn't know the company.

How does offering those new products and services affect the way you think about your place in the industry?

For 20 or 30 years, every promoter was a business-to-business brand. It was about servicing the artist and the artist community, not the consumer. Part of calling ourselves Live Nation was about starting to shift the way we think, to be first and foremost fan-focused.

What did you do to start reaching fans?

Last May, we launched LiveNation.com. We went from a nonexistent Web site to (depending on what metric you use) a top two or three site in America for fans to search for tickets. We think it's a huge step forward because it gives us a way to communicate with our direct buyer now. So if you're in New York and you want to see a show, whether we're promoting it or not, we want to provide you with a one-stop concert portal.

Why tell fans about the competition's events?

Some of my promoters didn't get it at first, but we said to them, "Listen, we're in the business of understanding the fan better than anybody and having a relationship with as many concert buyers as possible." We don't have 100 percent market share. But if I know your name and start a relationship with you, the odds are you're going to go to one of my shows. We can talk about the next show that you might go to that's a similar type of music or in the same genre.

So the data is the key?

Sixty million people come to our shows in a year. That's more than the NFL, NBA, and NHL combined. And historically, we've never asked for their names. It doesn't make a lot of sense. We know that they're not there for us—they're there for the band. But we are the host, and it would be nice if they signed the guest book. The greatest part of having a relationship with the fan now is he or she talks back. We have 300 or 400 consumers a week who tell us what's good or bad. We do exit interviews for the first time at all of our shows. If you went to a show at Jones Beach, we'll send you an email and say, "Thank you for going. Would you like to participate in our survey? We have some ways of rewarding you if you do." Was the parking good? Did the food suck? The sightlines? How can we make it better? It has helped us immensely when it comes to understanding the fan better and making changes.

What have you learned?

Some of the complaints are small: The parking didn't work; the view was bad. We have a policy now that says not to debate them. They're right. That's a real cultural shift. There wasn't a promoter in the business that had a customer-service department before. Now we have a full department that spends every day taking care of customer complaints. They go to the management team, and I get copied on them. They have to show me on this tracking system that the complaint was solved to the customer's satisfaction. We trained all our staff this year on customer service for the first time. We created ambassadors at all of our venues so somebody on-site has full authority now to go make things right

Such as?

One venue, I think it was in Hartford, seemed to have a lot of fans complaining about the way we were directing traffic. We got that to the general manager, and he instantly changed the way we were bringing traffic in and out of the venue to speed it up. A lot of the complaints were about the lines at the beer stands. Now we walk around with beverages and hawk them so you're sitting in your seat and don't have to get up. Sounds simple, but we've got a lot of basics to fix still. We hired a team and a senior executive to really look at everything we're doing in food and beverage and how can we provide better variety and better pricing. Every city's got a famous rib place or coffeehouse or dessert place. We let them set up shop to provide better variety around their brand power instead of generic hot dogs and drinks. Believe it or not we never used to serve energy drinks. This year we cut a deal with Monster and put them all in our venues. We have the on-site upgrade now too. If you bought a lawn ticket at our amphitheater, we'll now go right on-site and say to you, "Do you want to buy an upgrade to a reserved seat if we have capacity?" If they were already invested in the day and maybe didn't know about the reserved seats or maybe it wasn't what they wanted to buy at the time, why wouldn't we make it easy for them to say, "I'm here and I'm now passionately involved and I want a better seat"?

How else do you use customer data in new ways?

We did an upgrade program called the Guest List. Because we now have a database, we were able to go in and say, "We've noticed that you haven't bought a ticket for a show in an amphitheater this summer, but you came last year. You're a valued customer and we'd like to give you one free ticket to come to a show, knowing that you're probably going to come with somebody." It was a great way of bringing back a casual buyer. We're doing more consumer segmentation. We know that the average fan went to one or two shows last year, and the avid fan went to five. We know 30% of the population attended a live show. Who are they? What's the commonality between the teens and 40-year-olds? What else do those fans want to consume? How about the fans who didn't go? Do they want to buy a copy of the live show? We just started Live Nation Studios, which turns our venues into a studio. We're wiring our 150 venues to record shows. We haven't given fans a lot of options in the past. But that's changing.

How often do you go to shows yourself?

I went to three last week when I was in New York: Shakira on Monday, the Rolling Stones on Wednesday, and Eric Clapton on Thursday. I probably go to 100 shows a year. It's truly the best place to go see my full staff. And if I'm going to talk the talk, I've got to walk it. I come in the next morning and tell my staff, "I waited too long in line" or "Why did it shut down so early?"

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