1. Ticketmaster, now part of Live Nation Entertainment, responded to the threat
ID: 352529 • Letter: 1
Question
1. Ticketmaster, now part of Live Nation Entertainment, responded to the threat of the secondary ticket resale market (by firms like Craigslist and StubHub) by launching its own ticket marketplace. What impact, if any, will this have on the price of concert tickets? Discuss the pros and cons of this move.
2. Live Nation projects a double-digit increase in the number of concertgoers worldwide over the next several years. Discuss the factors that might contribute to the company's anticipated growth.
Explanation / Answer
2. There are various factors considered in estimating growth to a product and its producer. In the given example, it is noted that Live Nation projects have a double digit growth in next few years. The factors influence these are:
1. Initially the ticket prices must be decline upto some extent to face the competition from the other players in the market. It helps the firm to retain market leadeship in the segment and it is the benefit. By minimizing ticket price upto some level, it can attract more new customers too, which leads to increase its total customers. But the profitability of the firm may decline due to ticket price minmization. When the prices declines, even if the number of sales increases, but the profits may not increase in the same proportionate way.
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