Jim King, AEG Presents' EVP of live music, explains the original thinking behind the creation and launch of the company’s highly successful new London festival
Sign up for IQ Index
The latest industry news to your inbox.
As the company posts record-breaking results for 2018, and ahead of a major announcement at ILMC next month, IQ sits down with CTS Eventim CEO Klaus-Peter Schulenberg
By Manfred Tari on 26 Feb 2019
Just 12 months after first breaking €1 billion, German ticketing and live entertainment powerhouse CTS Eventim today posted its best-ever yearly financial results, growing revenue 20.1% to more than €1.2 billion after a year of strong organic ticketing growth and a string of promoter acquisitions.
In an exclusive interview that first appeared in IQ 82, CTS CEO Klaus-Peter Schulenberg speaks on plans for further acquisitions, the company’s big data “treasure trove”, and why the EU must do more to help European companies compete against the US tech giants…
IQ: Live Nation, Superstruct and even a Dutch pension fund [Waterland Private Equity] are all currently on a shopping spree, acquiring international concert promoters and festivals left, right and centre. What role does the acquisition of concert companies play within CTS Eventim’s growth plans?
KPS: An important one. We don’t consider the European markets as individual countries operating in isolation from each other. More and more artists expect us to provide them with cross-border touring opportunities. International top acts usually don’t just play in Germany or Spain; they do European tours.
Besides, many artists are now able to reach a considerable audience outside their domestic markets. This is why we are expanding our promoter network internationally. We now have a presence in ten countries – and more will follow.
In Italy, CTS Eventim recently acquired four concert companies (D’Alessandro & Galli, F&P, Vertigo and Vivo Concerti). Was this a coincidence or does the acquisition of four companies in a single country reflect a strategic approach?
Italy is one of the most attractive live entertainment markets in Europe. There is a high demand for shows, iconic venues and, above all, a tremendous variety of artists, both young and established, who are also popular in other countries.
Eros Ramazzotti just embarked on his world tour with our subsidiary Vertigo, with performances in 30 countries on three continents. So, yes, we have expanded and developed our portfolio in Italy very purposefully.
Besides, our four promoters cover different genres. The fact that we became number one in this market within a few months was of course also partly owed to seizing the right opportunities at the right time.
“We will continue to grow both organically and through acquisitions”
Outside Europe, CTS Eventim only has subsidiaries in Brazil. In general, the company tends to pursue a cautious but systematic purchasing policy. Is there currently nothing suitable in Asia or North America that would allow CTS to gain a foothold or get involved in these markets?
Here, too, it’s all about the right opportunities at the right time. In the past couple of years, the market environment for acquisitions in the live entertainment segment was no doubt more favourable than that in ticketing. However, given our double-digit, organic growth rates in online ticketing we are under no pressure whatsoever to make a move.
Since the IPO [in 2000], CTS Eventim has acquired more than 30 companies. We will continue to grow both organically and through acquisitions going forward.
In the ticketing sector, CTS Eventim focused on digitalisation and the development of the internet as a sales channel at an early stage. What impetus for the live entertainment business can be expected from these areas, and is there an internal transfer of knowledge between the two departments (ticketing and live entertainment)?
The fact that we focused on online ticketing from day one is now paying off in many fields for us: in addressing and serving our customers, as well as in the analysis of large volumes of data. We can offer promoters great added value here – including those who aren’t part of CTS Eventim. We advise them in matters of tour planning, provide them with insights about their visitors and help them reach even larger audiences.
The potential of big data is far from being fully utilised and exploited. Our treasure trove of data is particularly valuable because our online shops also generate high gross transaction value. In Germany, we are already in the top three companies in this connection.
“I would like to see European companies being able to compete as equals with their competitors from America and Asia”
Given the reservations of Germany’s Cartel Office [which forbade CTS’s acquisition of promoter Four Artists], acquisitions in Germany in the company’s two core business are unlikely.
In the January 2019 issue of Capital, you noted: “European companies that operate at a national level are clearly at a disadvantage.” This would suggest that CTS isn’t the only company affected by this. Do you expect a change in policy in this respect?
We are by no means the only company that is speaking out for more of a level playing field here. I would like to see European entertainment and technology companies being able to compete as equals with their competitors from America and Asia, on a regulatory level as well. But for this, we need a new kind of antitrust [competition] law that thinks as boundlessly as companies do.
The new European parliament, which will be elected in May, has the opportunity to set the right course – it should be in our common interest to ensure that the creative and tech industry is given a reliable framework for investment in Europe.
When Amazon announced it was entering the ticketing business, the stock market reacted by immediately discounting the company’s shares. And yet, it could happen at any time that one of the digital giants again seeks to tap into the ticketing business. Given the IT resources and reach of these companies, is this an aspect that worries you?
Amazon is a fascinating company with extraordinary innovative strength. But developments in both the US and UK suggest that the barriers to market entry are more complex in ticketing than in other industries. Thanks to our broad value chain, we can offer artists outstanding reach, and consumers the biggest possible selection.
We have highly professional sales structures and stable, trustful partnerships with promoters. Establishing such a network takes time and patience, and may not necessarily correspond with how American corporate giants do business. So we remain attentive and calm.
“CTS Eventim will continue to focus on growth in our core businesses: ticketing and live entertainment”
Like every large company, CTS Eventim depends on good and qualified employees. Now, due to demographic change, more and more companies are struggling with the shortage of skilled workers. Is this true for Eventim as well?
We operate a scalable business that requires highly qualified and talented employees. We have more than 300 employees alone just to take care of the ongoing technological development of our ticketing platform. In addition, we employ product managers, scrum masters, data scientists and so on. So it’s only natural that we compete with big high-tech companies like Amazon, Facebook and Google for the best minds. You’ll find state-of-the-art technology and collaboration with outstanding experts here with us, as well as with them.
But our core product is live entertainment, which is much more emotional. So we’re the right place for anyone who shares this enthusiasm for innovative topics and fascinating live experiences.
Your recent major deal in connection with the car toll collect system is a new line of business for CTS Eventim. What does this new business mean for CTS Eventim’s company structure?
The award of the contract by the German ministry of transport means, first of all, that we are capable of successfully transferring our existing technology and ecommerce expertise to new lines of business. So this commission is a milestone for CTS Eventim. Together with our partner Kapsch TrafficCom, we have set up an operating company that will make the car toll collection as convenient as possible for everyone involved. So while this will be done using our ticketing expertise, it will happen outside the existing group structure.
CTS Eventim will continue to focus on growth in our core businesses: ticketing and live entertainment. The proceeds from this new project will give us additional room to manoeuvre in the future, but tolls won’t become our core business.
Klaus-Peter Schulenberg makes his ILMC debut on Wednesday 6 March to reveal future plans for CTS Eventim’s live business. Be in the room to hear the news first.