Note from a friend who knows more about this than me:

If you look at Live Nation as a business, they’re not really in the business of producing concerts - they’re in the business of selling hot dogs, beer and parking. Over the past few years, as the price of concert tickets has risen, the total gross revenue of the concert business has risen even as Live Nation has lost money. … And while fans who pay $200 for a ticket may drink more beer than fans who pay $100 for a ticket, they won’t drink twice as much. So it’s in Live Nation’s interest to fill every single seat in the venue in order to maximize its revenue. If prices rise too high, that won’t happen and they won’t make money.

What I do think will happen is that the price of the best seats will skyrocket while the price of the average seats goes up and the price of the worst seats rises only a tiny bit faster than inflation. That seems to be the pattern we’ve seen over the past two decades, and I’m not sure this would change it. Quite frankly, I just don’t believe that it’s in the financial best interests of Ticketmaster or Live Nation to jack up the prices of all tickets, especially in a recession.

You may disagree. And there are certainly plenty of other reasons not to like the potential merger. I’m just not sure rising ticket prices are one of them.

A lot of good points here. Last week I wrote flatly that of course it’s going to mean higher ticket prices. I base that on three things:

1. The guy who is responsible more than any other single person for skyrocketing high-end ticket prices is now the odds-on favorite to be in charge of the most powerful single entity the music business has ever seen.
2. The company that single-handedly devised the biggest hidden increases in ticket fees is now part of that same entity
3. The combined company, which is also the biggest artist management operation, is going to be in the business of squeezing out as much money as possible from music fans in any way possible.

Now all three will be working together, and, in that context, the wonder will be if ticket prices don’t go up.

All that said, the question is how much, and how much in relation to the normal rise we would have seen absent the merger.

For one, it can certainly be said that the new company will be in the easy of milking as much money out of the entire process as possible. Cost of merchandise, parking fees, sponsorships … all that stuff that can be squeezed will be.

(Parking is a little-noticed but highly lucrative sideline. Each venue is different, of course, and LN might not take all the fees from venues it doesn’t directly control. But do the math: 5000 cars, say, at $10 per with a concert just one night a week: $2.5 million a year from just one venue. A dollar or two increase for a company [like Live Nation] with a crummy return and tanking stock price would be a big windfall; and parking is one of those costs that a) isn’t advertised and b) is not subject to consumer choice–once you’ve schlepped out to one of those godforsaken suburban sheds, you have no place else to go.)

This is a valid point as well: “So it’s in Live Nation’s interest to fill every single seat in the venue in order to maximize its revenue. If prices rise too high, that won’t happen and they won’t make money.”

So we’ll see. Note, though, that this would require the company to think long-term, with moderation, about how to balance the health of the industry and greed. These are not qualities the music industry traditionally displays.

Azoff has been trying to get sympathy for the company by tossing around the factoid that 40 percent of concert tickets go unsold. This may be true, if ironic. (Ironic because, as an artists manager, Azoff specialized in getting sky-high tour guarantees that forced ultra-high ticket prices, which of course would leave some seats unfilled.)

All that said, it’s hard to believe the 40 percent figure, because if it is true, it means that the concert industry is crazily run.* I thought the ideal for the touring industry is to book acts into as small a venue as possible to limit that wastage; if that many seats are really going unsold it means that the companies involved are a) sticking acts into rooms that are too big, b) not marketing the shows correctly, or c) charging too goddamn much for the tickets.

One bad habit I have, I will confess, is referring a little too cavalierly to “potential grosses” of, say, a 20,000-seat arena with an average, say, $100 ticket price. A lot of those shows do sell out, which is now Madonna, Bon Jovi, Springsteen and the Police all grossed more than $100 million touring last year.

Some don’t, though—I just heard about a Neil Young date in Chicago with a crazily high ticket price ($165, maybe?) that was played in an arena with, embarrassingly, a curtain drawn across half of it.

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* I assume he’s using some metric different from what most people would think of as “concerts”—i.e., shows in large theaters, arenas and stadiums. Since a good many do sell out, and many others come close, that 40 percent figure would mean that many shows are played at half capacity or less. It’s hard to believe—I simply don’t believe—the industry is guessing that badly that much about the market for those artists.

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Previously in Hitsville:
Another suit against Ticketmaster
Constantly updated: The Ticketmaster-Live-Nation unholy-matrimony news round-up!
Five arguments against the Live Nation/Ticketmaster merger
Irving Azoff kicks it old school
The music industry’s Putin
Bad merger coverage
WWBD (What would Bono do?)
Billboard’s analysis of the Ticketmaster/Live Nation merger
Springsteen and Landau bash Ticketmaster and Live Nation!
P.S. on Ticketmaster: A case study, starring Bruce Springsteen
Why the potential Live Nation-Ticketmaster merger is a very bad idea
Is Ticketmaster trying to muddle the fees issue?
The Azoff-Ticketmaster deal: Bad news for concert-goers—and the music industry
Why you so seldom read about obscene Ticketmaster-style ticketing charges