TJ Chambers
Lyte’s collapse reveals a ‘dirty ticketing secret’ whilst the live music industry continues to trumpet record revenues
As noted last week (https://tjchambers.blog/2024/09/20/and-in-other-news-20-09-24/), the ticketing solutions provider Lyte has suspended operations, with no advance information seemingly provided to clients, suppliers or consumers.
The Ticketing Business News (23rd September) continued its investigation (https://www.theticketingbusiness.com/2024/09/23/lyte-initiates-sale-process-designed-to-clear-unsecured-debts/) and identified that the company assets had been transferred to the newly formed ‘Lyte Liquidation LLC’ and was seeking offers in a ‘closed-bidding’ process.
Separately a number of acerbic social media posts and off-the-record comments from former staff and/or industry peers implied that Lyte’s issues stemmed from the 2022 acquisition of Festicket, the failed ticket+travel bundling company (https://www.iq-mag.net/2022/09/lyte-festicket-event-genius-assets/).
Now described as ‘the stupidest deal ever done’ with apparently rushed and insufficient Due Diligence undertaken, or fully understanding the implications of Festicket’s advance-funding model with various international festival clients, meant that the company took on increased fiscal risk.
It was further suggested that Lyte ‘went downhill pretty much’ after that transaction, with a series of further poor management decisions.
Billboard subsequently reported (23rd September) that “Lyte was marketed to the public as a fan-to-fan ticket exchange, but documents from recent lawsuits show that Lyte’s main source of revenue came from working directly with promoters to scalp hundreds of thousands of dollars’ worth of VIP tickets for their events to Lyte, which would then resell those tickets at large markups, splitting the upside between the promoter and itself.” (https://www.billboard.com/pro/lyte-sued-festivals-ticketing-scalping/)
Further that two festivals, the AEG-partnered Lost Lands and Chicago’s North Coast Music Festival had filed separate court actions to recover $330,000 and $350,000 respectively.
Arguably it’s becoming all too clear that this is another example of layered risk and stupidity masquerading as a ticketing company.
Another (unintended) consequence of this Lyte news, as noted by music tech consultant Jack Stephens (https://x.com/iamjackstephens/status/1838896449431515357) is that when ‘start-up’ ticketing service providers collapse, taking consumer (or client) funds with them, it inevitably drives industry participants back to the ‘too big to fail’ behemoth that is Ticketmaster, with the belief that it won’t be insolvent any time soon.
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Separately, this week Pollstar reported on its Q3 2024 box office data, in particular based on the Top 100 Touring Artists: ‘Cautious Optimism As Quarterly Box-Office Totals Reveal YOY Growth – (https://news.pollstar.com/2024/09/23/cautious-optimism-in-2024-q3-business-analysis-quarterly-box-office-totals-show-year-over-year-growth/).
When analysing this selective extract (where enough artists / promoters / venues etc. have been bothered enough to self-report their box office data) it stated: ‘the total worldwide grosses for the Top 100 Touring Artists hit a record-setting $5.68 billion representing an increase year-over-year of 14.1%, while the number of tickets sold during the same timeframe is 44.9 million, a more modest jump of 2.6%.’
So, the Y-O-Y trend is that the global live music business has been able to extract more money from broadly the same audience.
Pollstar also reported that this quarter’s average ticket prices ‘hit an all-time high of $126.55, marking an 11.2% hike compared to Q3 2023’s average ticket price of $113.85’.
Which is great for those Top 100 artists, and fine if their audiences can also continue to support these above inflation ticket price increases.
But the sector should be mindful of the impact that this concentration of revenues within the Tier #1 touring spectacle has on the mid-market, grassroots and emerging stages.
As the Top 100 Touring Artists take an ever-larger proportion of live music revenues then unless the global consumer disposable income continues to similarly rise, or the propensity to attend events increases, the audience for the next generation of artists, or for those working within less popular genres will inevitably find it more difficult to attract or retain their own audiences.
Which reminds of when John Lennon commented on ticketing and yield management.
On November 4, 1963, The Beatles were performing at the Royal Variety Performance in London attended by Queen Elizabeth, the Queen Mother and Princess Margaret
The Beatles, who were seventh on the bill of 19 acts, wowed the upscale crowd with ‘She Loves You’, Till There Was You’ and ‘From Me To You’.
Before starting their last number ‘Twist and Shout’, John Lennon said, ‘For our last number I’d like to ask your help. Would the people in the cheaper seats clap your hands? And the rest of you, if you’ll just rattle your jewellery’.
Until next time.
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TJ_Chambers 