This is the lead story in my weekly newsletter devoted to the business of live entertainment: Talking Tickets. Get it FREE!
I don’t know if I mentioned it here, but over the last few weeks, I read a pretty interesting book on the rise of consolidation and monopoly power in the United States called Goliath.
I bring up the book in conjunction with the idea of deconsolidation because the hypothesis of the book is that the American economy has become more unstable over the last several decades due to the consolidation of economic power in fewer and fewer hands.
If we look at American history, we will see that in the States, there are swings in the economy where America swings back and forth between being entirely in the control of monopoly power and then there is a reaction that shatters that and we spend 60-70 years going back the other way.
Why have I spent so long writing about the background?
Because I think we may be seeing an end of the march towards greater consolidation in the ticketing industry and this could open up a lot of opportunities for folks going forward.
If you read the article above, you’ll notice that so many of the markers were moving up at extraordinary rates. Rates that I’d say were unsustainable and likely being supported by continued corporate entertainment budgets, brokers and consolidators working with the secondary platforms to push more folks to shop online, and the fact that for a while people were prioritizing buying experiences over stuff.
The pandemic has shown that this business model might not have been sustainable and that a lot of it was also driven by debt.
Sportico reported the NFL’s debt numbers and they were high. We have seen so many teams and organizations struggle because 30-40%+ percent of their revenue comes from fans in the stands and they had no rainy day fund.
What does all of this mean?
Three things I’ll keep an eye on:
First, I think you’ll see that there is more opportunity for smaller businesses.
The challenge in a lot of cases with these big businesses after mergers is that they struggle to respond to their markets, have pricing structures that hinder them, and they become easier targets for smaller more nimble competitors.
Second, the ability to market and sell a product is going to be even more important.
I have spent a lot of time over the years talking with y’all here and other places about the need to get more effective at marketing and selling.
Reading about deconsolidation and seeing the struggles that a lot of places are dealing with to communicate and generate revenue during a pandemic shines an even brighter light on the need to focus on revenue, marketing, and a change of strategy to give these businesses a bit more stability.
Third, the recovery is likely to take a little longer than any of us wish for.
I believe from conversations I have had that we aren’t anywhere near completely hitting rock bottom yet.
Until we do, we won’t be able to really recover.