Caught between a rock show and a hard place, Live Nation (NYSE:LYV) has seen better days. The country's leading concert promoter has seen its business all but fade out since the pandemic forced venues to cancel performances. Revenue plummeted 98% in Live Nation's latest quarter, one of the sharpest year-over-year declines this earnings season. 

Outside of Norwegian Cruise Line (NASDAQ:NCLH), with a 99% plunge in revenue for the same three months, it's hard to find a company that's seen its business get hit harder. However, there's one thing that Live Nation has over NCL and larger cruising peers Carnival (NYSE:CCL) and Royal Caribbean (NYSE:RCL). A whopping 86% of ticket holders for canceled Live Nation events were still holding on to their seats for rescheduled shows as of the end of June. The three cruise lines are retaining far fewer of their passengers bumped from nixed sailings.

What's going on here? What can Carnival, Royal Caribbean, and Norwegian Cruise Line learn from Live Nation? Let's take a closer look at the different situations.

A wave consisting of dollar bills and gold coins.

Image source: Getty Images.

Yacht rock

Big discounts are not proving to be enough of an incentive to keep cruise line passengers around after their voyages get canceled. In an update last week, Royal Caribbean revealed that 48% of the guests booked on suspended sailings are requesting cash refunds. Earlier this month Norwegian Cruise Line revealed that 60% of its passengers have submitted for refunds. Carnival's fiscal calendar ends a month earlier than its two rivals, but last month it claimed that roughly half of its guests were going the refund route. How can Live Nation be so fortunate to have just 16% of its concertgoers ask for their money back?

The gap is significant between the two industries, and that's with the cruise lines offering as much as a 25% bonus on fares paid if guests opt for future cruise credit. Live Nation is just keeping a seat warm for a rescheduled show. Why is there such a wide discrepancy here when it comes to consumer behavior? Cruise lines and musical concerts are likely to be the last of the industries that will reopen once we've licked the pandemic, but there are a few factors at play here.

For starters, there is a big difference when it comes to cost here. Some big-name concerts can get pretty expensive, but they don't rival the four- and sometimes even five-figure tabs on luxury cruises. That's a lot of money to tie up for an industry that won't be taking on passengers until November at the earliest. It's easier to let $50 or $100 a ticket ride on Live Nation's books.

There's also something to be said about music fandom. If you worked hard to score a ticket to a show for one of your favorite performers, you can be sure you're going to want to see them the next time they're back in town. A lot of people probably aren't sure if they'll want to be in a cramped cruise ship anytime soon.  

We may as well also address the fear of losing your money. Live Nation isn't going to go under. It's only on the hook for ticketing fees, but even then it had $3.3 billion in cash and equivalents on its books at the end of June. The cruise lines have done a good job of beefing up their liquidity since the industry's March pause, but it's not a coincidence that the cruise line with the largest refund request rate is the smallest of the three. 

Could the cruise line industry still learn a few tricks from Live Nation here? Would it be faring better if it could guarantee passengers the same cabin they booked on the same sailing a year later? Could it had offered partial refunds to keep at least some of the passenger money under its watch? Live Nation has been streaming music events to keep its customers close. Could Carnival, Royal Caribbean, and Norwegian Cruise Line had done a better job of dictating the narrative since the interruption? Would the cruise lines be holding up better if they had spent the past few months drumming up positive takes instead of seeing the flow of negative headlines of crew members stuck on ships for months, restart dates that were too ambitious and had to be pulled, and passengers having to jump through hoops for a shot at getting their money back? 

We don't know when cruises or concerts will be back. We don't know how restricted the experiences will be when they return -- or if we'll even be able to afford them if the global recession continues to widen. If Live Nation is caught between a rock show and a hard place, the cruise lines are caught between a hard place and a hard place.