Sometimes synergy isn't all it's cracked up to be:

Clear Channel, which operates Los Angeles' Wiltern and Orange County's Verizon Wireless Amphitheater, accounts for well over half of U.S. concert ticket sales.

....But if the San Antonio-based company is flexing its muscle to monopolize the concert business, it isn't getting much — other than pain — for the effort.

Some analysts contend that the performance unit, which runs more than 60 venues in the U.S. and 120 worldwide, is beginning to look less like a bastion of strength than a gaping hole in Clear Channel's future.

The division "is the company's Achilles' heel," said David Miller, a media analyst with investment firm Sanders Morris Harris. Clear Channel, he added, "radically overestimated" the benefits of linking concert venues to its radio empire, complaints of wary musicians notwithstanding.

....To some extent, Clear Channel has suffered from outside problems, particularly after the Sept. 11 terrorist attacks, which wreaked havoc with tour schedules and attendance. According to Mays, the division has been further hurt by escalating pay demands of touring artists.

Yet critics say Clear Channel also has shown itself to be less than adept at managing the business. Although it had a piece of last year's smash-hit Rolling Stones tour and Broadway's "The Producers," the company made some poor choices in booking major acts. Heavily promoted tours by Gabriel and Lenny Kravitz, among others, underperformed.

Marketing Concepts

Worse, the company that promised to revolutionize the music business with slick marketing concepts has seen some of its slickest ideas misfire. For instance, Clear Channel's much-heralded online subscription ticket club, first tested 18 months ago, is off to a slow start with just 65,000 members. A prospective TV series based on concerts never got off the ground, and a "developmental" basketball league, which was supposed to draw hoops fans in smaller markets, hasn't paid off.

....One fancier notion, still in the exploratory stage, Becker said, is to record live concerts as CDs to be sold as fans are leaving the show. Such-instant replay CDs presumably would open a new revenue stream, but the concept could face resistance from artists and their record labels.

Ultimately, Mays believes the solution to his company's concert woes is clear. "We're going to have to figure out ways to sell more tickets," he said. [LA Times]