Tuesday, August 2, 2016

Amazon should purchase Ticketmaster or Live Nation

Amazon buying a ticketing service provider may seem odd at first glance. Yet, below I will explain why there are benefits to an acquisition of this kind. If Amazon were to purchase Ticketmaster (Parent company is Live Nation), it would be able to leverage the existing ticket distribution service to bring in more revenue and target more specific customer needs through the newly obtained customer data.

First, visitors to Ticketmaster and Live Nation sites will now redirect to Amazon.com/Ticketmaster or Amazon.com/Tickets. That way, additional traffic is directed towards the online marketplace. In 2015, Live Nation processed 530 million tickets, which is substantial traffic. Amazon.com is currently in the top 5 of sites visited in the USA. I am sure Jeff Bezos would like to see them as the #1 site. “The Everything Store” would gain an additional piece to that puzzle, a portal for live sporting events, concerts and more. Within the ticketing section, there will be links to merchandise for those same events. This leads to the next big benefit of the acquisition.

Customer Data. Amazon wants to know as much detail about its customers as possible. With the addition of a ticketing service, users will link their Amazon accounts to their ticket purchases. Amazon will now know what concerts, sporting events, or plays you like to attend. That information will enable Amazon to directly target products to individual customers based on music tastes, sporting tastes and so on. As time goes on, Amazon will understand who your favorite teams, what games you go to and when, and then be able to offer you deals on select merchandise heading into a football season, or into a game that they know you will be attending.

A scenario plays out where you log onto Amazon.com/tickets and purchase two tickets to the upcoming Knicks game. On the way to the cart, offers will pop for a Knicks hat, or a Carmelo Anthony jersey. Of course, free shipping is included with Prime. Certainly you are more likely to purchase that merchandise than someone that isn’t about to attend a game. This plays into Amazon’s strategy of being able to cater to customers on a personalized level. For the next two weeks leading into that game, Amazon can target specific products to you.

At a current market cap of $5.5 Billion, an acquisition of Live Nation will be a rounding error for Amazon. They could even purchase Ticketmaster from within Live Nation for less. This would be just another piece to the puzzle of becoming the “Everything Store” that Jeff Bezos has envisioned. Lastly, I haven’t mentioned the benefit of acquiring the ticketing business itself, a sector that has a long runway to grow considering the preference of live sporting/concert events that the younger generation has.