Music Acts Look to Groupon, LivingSocial for Help

Websites like Groupon have become the go-to place for folks looking for that half-off deal on a manicure, a two-for-one offer for a fancy dinner or that all-inclusive trip that won't break the bank. But increasingly, it's also becoming the place for music fans to scoop up deep discounts on concert tickets, CDs and more for top-name acts.

From big-name acts Arcade Fire to faded performers such as Color Me Badd, the industry is turning to Groupon and LivingSocial to connect with more fans - and sell more products.

Groupon struck a deal with Live Nation in 2011 to help sell out concerts, and a year later, LivingSocial partnered with AEG to do similar work.

"That ability to give this shot of adrenaline to the marketing promotion is a big deal," said Alex Michael, LivingSocial's general manager for its entertainment and restaurants division. "You get massive brand exposure and ultimately you get sales and so that combination is powerful."

Michael said Google informed LivingSocial that after the site offers deals on tickets, regular tickets sales also go up.

"We do it in a big way by delivering it to people's doorsteps and inbox. ... Awareness is probably the biggest issue with people going to stuff," he said.

When selling concert tickets, Groupon typically offers a 30 percent to 45 percent discount. Greg Rudin, vice president and general manager for GrouponLive, said it mainly focused on last-minute inventory when it signed with Live Nation. It took a year to persuade the promoter to let Groupon start selling tickets in advance, and "as a partner, not just when you're in trouble."

"The Groupon audience is significantly broad ... we've reached them in a really simple way, giving them the easy opportunity to say yes and buy a ticket on the spot. ... And I think that if we weren't frankly reaching the casual fan that was not necessarily going to buy a ticket anyway, that we wouldn't have a strong relationship with our partners," Rudin said.

Business is going so well for Groupon that it doesn't even offer that great of a deal anymore.

"We've increasingly seen that we don't have to discount as much as we might have originally thought we did, and we have a big initiative internally within our group ... to discount less," Rudin said. "The people that buy are not necessarily significantly price sensitive, they just don't know about it."

LivingSocial has sold concert tickets in ways ranging from a one show-deal with Bruce Springsteen to a six-week exclusive to sell tickets for Oprah Winfrey's upcoming tour. Michael said consumers come to the site to buy tickets because of the added value and bundles that are offered.

"Whereas with others sites you may just get a ticket, you may just get a discount, but what we want to provide you with (is) a ticket and an experience or a value item," he said, such as a T-shirt, drink ticket or access to an act's sound check in a bundle deal. "Everyone wants something that's a little more personalized these days."

LivingSocial worked with platinum-selling rock band Switchfoot last year when it offered a concert ticket along with a ticket to the band's documentary. It worked so well that LivingSocial was the home for pre-sale tickets for Switchfoot's tour this year, offering a signed poster and download of the band's latest album with tickets.

"These are our opportunities, through LivingSocial specifically, that we've used this last year to reach more people and to let people know what we're doing," Switchfoot drummer Chad Butler said. "We're reaching people that have never been to a Switchfoot concert ... or recognize our band's name."

Rapper Wiz Khalifa, who has partnered with Groupon for tour dates, said he was open when the idea of working together presented itself.

"I liked the idea of it because there are tons of people who are too busy or they're out of the loop," he said. "So it makes it much easier (for fans)."

Groupon has also sold CDs. Last year, it offered two of commercially struggling singer Ciara's albums for $13.99. Groupon is currently selling Beyonce's best-selling latest album, her HBO documentary and a live concert DVD as a bundle for $49.99.

Rudin said the company is looking for more ways to package deals - maybe even becoming the go-to place for debuting music.

"A lot of times if people are fans already they've got the album, so we're looking for new content, and we're kind of in the process now where we're trying to convince folks if there is a new single, they should release it through us along with selling tickets," he said.