Getting a record deal used to be the big prize in the music business. Emphasis on the "used to."
"Artists have bills just like you and me," Live Nation CEO Michael Rapino said on the latest episode of Recode Media with Peter Kafka. "They make money when they go on the road. They need to go on the road."
When they do, it is almost a given that Rapino will make money, too: Live Nation dominates the tour business and put on 25,000 shows last year. If you go to see Beyoncé, Bruce Springsteen or Luke Bryan this summer, you're going to a Live Nation show. And even if you're not going to one of those Live Nation shows, chances are very good that Rapino will make money anyway because Live Nation and its subsidiary Ticketmaster sold 530 million tickets last year.
But Rapino still has real challenges: He wants to figure out how to make more money from each show his customers go to. And he wants to make them happier — by figuring out how to solve problems like scalpers.
The first challenge is easier: Rapino said he plucked his new chief revenue officer, Tom See, out of the theme park business because Disneyland and Universal Studios know how to upsell their guests on additional purchases like food and merchandise. Live Nation wants to apply that to its 73 million annual customers.
"If I can upsell you, if I can enhance your experience — my business will do very well if we figure out how to super-serve 73 million fans," Rapino said.
Fighting the StubHubs of the world is a lot harder. Rapino talked at length about what Live Nation's subsidiary Ticketmaster is trying to do to undercut scalpers, but acknowledged that the ticket-reselling business is too big to shut down completely.
"It’s an $8 billion industry," he said. "That’s like cocaine money. That's going to attract a lot of good people."
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This article originally appeared on Recode.net.