Live Nation has announced that it will not be renewing the ticketing contracts for its venues with long-time associate, Ticketmaster. A recent press release from the leading concert promoter outlined its new ticketing initiative with German partner CTS Eventim starting on January 1, 2009. This latest move continues the endeavor to make Live Nation a vertically integrated business, and is designed to finally control every aspect of an artist’s revenue generation under one roof.

What does it all mean? For other companies in an artist-based music industry, i.e. record labels, merchandisers, concert promoters, and distributors, there will now be even more confusion over business models and industry roles. Live Nation can take on most of the existing business while still producing and promoting an artist’s concert-- the single biggest revenue earner for an artist.

Some background is necessary. Since 2005, after it spun-off from media giant Clear Channel, Live Nation made a series of strategic acquisitions, expanding operations beyond live concerts. First came the buyout of House of Blues, which gave the company control of a large chain of clubs and theaters. Next came the purchase of Music Today, a leading fan-club operator and database business. The company also acquired two ventures, Signatures and Anthill Trading, which gave them the merchandising rights to an impressive list of popular artists. Finally, in October 2007, Live Nation announced the formation of Artist Nation--now called Live Nation Artists-- to handle the distribution and marketing of artists’ recordings. At the same time, Madonna was signed to an unprecedented ten-year deal with a staggering $120 million advance. LNA is said to be in talks for similar styled deals with dozens of other artists, although no official statements or details have been released.

Yet even after all of those mergers and acquisitions, Live Nation still did not have control over ticketing, a fundamental weakness. Ticketing, of course, has the potential to act as the primary conduit for any and all other transactions relating to an artist’s career. Furthermore, it allows the easy collection of indispensable data about the interests and buying habits of an artist’s fan. In short, ticket sale ownership allows Live Nation to both market many products and services directly to the consumer, such as concerts, recordings, merchandise, and fan club memberships, and collect invaluable data.

Live Nation will reportedly be licensing the CTS Eventim software platform, one of the most technologically advanced in the world, and will implement it on Live Nation’s website. Tickets will all be electronic, though it remains to be seen how exactly they will be distributed. Customers will most likely be able to print out their own tickets, but there have also been talks of paperless ticketing techniques similar to those used by airlines, or even distribution via mobile phone. The CTS Eventim software will also give Live Nation the ability to offer ticket resale on its website and enter the increasingly lucrative secondary ticket market. However, it should be noted that Ticketmaster’s contracts with House of Blues venues, Live Nation’s new acquisition, runs through 2009.

Live Nation will also be saving a considerable amount of money by bypassing Ticketmaster entirely. According to the New York Times, the revenue that Ticketmaster generated from Live Nation events made up over 15% of the company’s total revenue in 2006. Where does this leave Ticketmaster? CEO Sean Moriarty stated that the departure of Live Nation from the company’s list of clients would “free Ticketmaster to focus its efforts on other areas of the live entertainment business.” Most likely, this means trying to compete with Live Nation by producing and promoting its own events and concerts. This initiative is reportedly already starting to take shape overseas. Ticketmaster recently acquired leading fan interaction and data collecting entity Echomusic, a company similar in many ways to Music Today.

Live Nation claims to be the future of the music business. While it will take an entire year for Live Nation’s ticketing service to take hold (leaving much time for surprises and new developments), this most recent move marks the beginning of Live Nation’s ability to integrate all its business. If Live Nation is in fact “the future of the music business,” then backdate the future to January 1st, 2009.