How we helped
By the time the house lights came up on COVID-19, the live entertainment industry was a ghost town. Our client had annual revenue of around $1 billion as a global entertainment brand and the backing of private equity prior to the pandemic, but faced income losses from months of hibernation and the burden of $60 million in interest payments due each month. The corporation needed a digital and growth strategy that would allow them to create value and connect to customers. Augmented reality (AR), virtual reality (VR), the metaverse—all were options to explore.
Investors were also eyeing an IPO three to five years down the line and wanted to see proof of growth—a bigger-picture strategy for a world looking to reconnect with the arts and live events. Could they sustain their historic performance in the longer term? That was the challenge AlixPartners was brought in to tackle.
Digital strategy can be dazzling but ineffective. We needed to isolate and cost-out the best long-term initiatives to move beyond ticket sales to better customer acquisition, funnel value, and customer lifetime value. To do so, we engaged with stakeholders from across the business to understand the in-flight and planned portfolio of digital initiatives, operating model, and ways of working. Working outwards from the audience, we developed a digital customer journey model and supporting KPI framework to allow potential digital projects to be assessed for value. Looking at estimated revenue, costs, and feasibility for each initiative in the roadmap, our client was able to proceed seamlessly from strategy to execution.
A performance to remember
We identified over $160 million of incremental revenue opportunity over a three-year investment period. This included $130 million of growth in “classic ticket sales” resulting from improved digital effectiveness. Over $30 million of opportunity was identified through exploration of innovation projects—enabled through technologies such as AR, VR, the metaverse, NFT—and new partnerships and collaborations with global mega-events, fashion and broadcast industries, and influencers.
Putting growth vision to work meant maximizing synergies within the industry. Over the course of 12 months working with the company, AlixPartners also helped the company evaluate several acquisition and divestiture opportunities. The company made two acquisitions that led to additional EBITDA of approximately $8 million, and other cost saving synergies of approximately $2 million.
A lack of investment in technological opportunity held the company back through pandemic shutdowns, but our digital strategy and M&A services allowed the corporation to unlock a 15% growth opportunity through increased customer digital focus and effectiveness.
$160mn
incremental opportunity
$2mn+
cost synergies