TICKETMASTER, LIVE NATION GO THEIR OWN WAYS

A Ticketmaster memo obtained by Billboard's Ray Waddell states, in part, "While it has been our sincere desire to create a new long term partnership [with Live Nation], we now believe it is doubtful we will extend our agreement when it expires at the end of 2008. Live Nation has been a valued client for a very long time and we believe we've taken every reasonable step possible to facilitate a renewal, but they seem intent on a direction for their business that leaves us no viable way to work together."

The contract between Ticketmaster and Live Nation dates from1998 with Live Nation's predecessor, SFX Entertainment. Venues acquired as part of Live Nation's House of Blues acquisition last year are contracted with Ticketmaster through 2009.

Ticketmaster struck the deal with what became Live Nation after Robert F.X. Sillerman consolidated concert promoters and venues into SFX, and the deal continued when Clear Channel Communications bought SFX for $4 billion in 2000 to form Clear Channel Entertainment. After Clear Channel spun off the publicly traded Live Nation, CEO Michael Rapino talked of the possibility of new revenue sources, including ticketing.

Live Nation represents about 10% of Ticketmaster’s overall revenue and will now presumably handle ticketing in-house. Last year it acquired an interest in a pair of companies, Musictoday and Ultrastar, that specialize in the direct-to-fan space, which also includes artist e-commerce, fulfillment and fan club ticketing. Livenation.com attracts 3 million unique visitors per month, compared to Ticketmaster.com's 21 million.

Ticketmaster sells between 14 million and 15 million tickets per year to Live Nation events, generating about $100 million in service-charge fees of its nearly $1.1 billion in revenue last year. Live Nation is also interested in obtaining ticket-buyer information for its data base, along with the attendant marketing and sponsorship opportunities.