Sometimes you stumble on a clinic, a tutorial about what they heck is going on with the consumer, what she's interested in, what she's spending on, and, more important, who is getting an increasing portion of that consumer's dollar.
Last night Live Nation Entertainment (LYV) , the company that produces live music festivals and owns Ticketmaster, put on one of the best clinics of the year, a triumphant presentation following the news of its truly astonishing second quarter report.
I've been studying and recommending this company since it traded at $22 a couple of years ago, after I met Michael Rapino, the CEO, at Dreamforce, the annual Salesforce.com (CRM) bash that showcases the future of pretty much, well, everything.
Rapino outlined a plan to be able to buy up festivals around the country while expanding Ticketmaster to handle those venues, as well as others that it currently didn't take care of.
I should have been more aware of it, given that John Malone, the incredibly prescient investor behind Liberty Media, had, four years before I considered the merits of the company, bought 34 million shares for $12 each in a tender offer back in 2010. Liberty now owns 69 million shares -- yes, they continued buying as the stock stayed low -- or 34%.
It's always made sense to follow what Malone and his doppelganger, Greg Maffei, the CEO of Liberty Media and chairman of Live Nation, do.
Now that plan to build that network of festivals is being put into action and it is generating staggering numbers, with operating revenues up 29%, operating income up 53% and free cash flow -- these events just spin off cash -- up 42%.
Rapino has created a platform of 7000 shows and a ticket business that that has sold more than 68 million tickets this year so far, 12 million more than last year.
It's the hottest venue for you know who: the millennials. "Our growth continues to be strongly driven by our strategic brand relationships, with over 50 sponsors that each spend more than one million with us each year across our onsite and online platforms to reach that highly sought-after millennial customer," Rapino explained.
Sponsorship revenue is up 32%, and because of the ease with which tickets are bought on his platform, especially its growing mobile presence -- 31% versus 27% last year -- he now has information on 550 million fans.
Lots of CEOs claim they have a flywheel effect, but Rapino really does have one going here. Because of the growing base of personalized tickets, like the ones on your cellphone for airline tickets, he can push information to you for concerts you might be interested in or paraphernalia you might naturally want.
In other words, Live Nation is taking advantage of all the customer relations products that Salesforce.com has to sell these millennials more goods and services at the point when they are most thinking about them. He's even come up with a verified ticket approach, enabling artists to prioritize the distribution of tickets of rabid fans using a proprietary algorithm for such behavior.
Now, why does all of this work so well? Rapino doesn't spent a lot of time on that, because it is so obvious, but nothing is better on your Instagram page than videos of you swaying and dancing to the music of a concert that is set up as the perfect Facebook background.
It's even better than going to sporting events -- which, by the way, are actually down in growth year over year.
The goal of all advertisers is to hit people when they are most interested. The best platform I have seen to date for these hard-to-reach folks may be Live Nation.
That's why, even at $40, it still may be a terrific play on the millennials and everything they crave, all bundled up into one amazing digital on and offline platform.