Kate Fisher, 17, of Missouri, USA, nearly collapsed the moment she saw Harry Styles on stage in September. Harry, who had only seen on the screen of his smartphone, was right in front of him. Due to the cancellation of the concert due to COVID-19, the meeting between the two (?) was delayed by a year. Kate’s fandom, which has deepened due to Corona, was not satisfied with a single concert. She paid her reseller a fortune, bought tickets to a concert in Chicago a week later, and flew to the concert.
The fan heart tied to the corner of the room exploded with Corona (step-by-step recovery of daily life). Concerts by popular artists are often sold out as soon as ticket reservations start. During the pandemic, the global No. 1 performance company Live Nation (item name: LYV) hit an all-time high on the back of a growing fan heart.
○ Recovered 80% of operating profit before Corona
On the 4th (local time) on the New York Stock Exchange, Live Nation rose 2.13% to close at $107.52. It broke the all-time high again after the last two days. Live Nation has been on the rise by 18% since October alone. In March of last year, the stock price dropped to $21.7 due to the impact of the coronavirus. The stock price has risen fivefold in about one year and eight months.
Live Nation is the world’s No. 1 performance company, making profits by directly planning performances or selling tickets. Live Nation plans performances by various artists such as BTS and Black Pink as well as Beyonce and Jay-Z. Live Nation also sells a variety of tickets from performances to sports events through a ticketing agency site called Ticketmaster (the largest market share in the United States). Ticketmaster has a window where you can resell (resell) tickets instead of refunding them. The reseller can transfer tickets at a high price, and Ticketmaster takes 10% of the resale price as a commission. Currently, 80% of sales come from concerts, but ticket sales are contributing more to operating profit. Although it made a loss at concerts in 2018 and 2019, it made a huge profit in ticket sales.
With Corona being implemented in earnest, expectations for Live Nation also increased, which led to a rise in the stock price. Third-quarter results turned this expectation into confidence. Live Nation announced that its sales in the third quarter of this year were $2.698 billion, a 15-fold increase from the previous year. The operating profit was $137.1 million, and it succeeded in turning to the black (a loss of $504 million in the previous year). Compared to the third quarter of 2019, before the coronavirus, sales still did not recover, but operating profit recovered about 80%.
○The fans who were thirsty for the performance opened up more wallets
The performance shows how much the fans were thirsty for the performance. According to Live Nation, concerts resumed mainly in the US and UK, and 17 million fans visited the venue in the third quarter alone. According to Live Nation, per capita on-site spending has increased by more than 20% compared to 2019, before the coronavirus.
Fans who want to see the performance are also active in booking concerts for next year. Live Nation said that it had already sold 22 million tickets ahead of the concert to be held next year. Performance tickets for famous bands such as Coldplay and Red Hot Chili Peppers have sold over 1 million copies each. In particular, it is positive that summer is the peak season for the performance industry, but most countries are expected to implement with Corona in earnest in the spring of next year.
Analysts raised their target price. However, considering that the share price has already risen considerably, the upward revision was not significant. This month, JP Morgan raised the target price of Live Nation from $92 to $109, and Cowen & Co raised its target price from $100 to $120, maintaining an investment rating of ‘Outperform’.
On the other hand, Morgan Stanley raised its target price from $85 to $95, but it is lower than the current stock price and maintained the investment rating of ‘Equal-Weight’.
Reporter Seulgi Lee surugi@hankyung.com
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