A growing economy is providing Canadian consumers with more disposable income, a proportion of which is finding its way to live entertainment, reports Steve McLean
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Russia’s live music operations are enjoying a healthy period, but there remains room for significant growth according to those working in the industry
By Adam Woods on 17 Feb 2020
Global election meddling, Novichok, Syria, Ukraine, London house prices – it’s not hard to find things to blame “the Russians” for. Then again, as Juha ‘Richie’ Mattila, veteran Finnish promoter and frequent Russian tourer points out, how would the rest of us like to be judged for the sins of our leaders and our oligarchs?
“We shouldn’t tour Russia because of Putin? Yeah, well, everybody should quit touring the USA then,” he hoots. “It’s [like] the old saying: don’t judge a book by its cover.”
Russia’s renewed role as the villain of international politics is so entrenched in the western narrative that it’s easy to forget there’s a real country under there – unimaginably huge, rich in culture and with plenty of good guys.
“You need to remember, Russia is part of Europe, even if politically it’s a little different,” says Mattila.
The international sanctions in place since Russia annexed the Crimea nearly six years ago have put a drag on the economy, destabilised the ruble and, from a live perspective, punctured the growth of cities other than St Petersburg and Moscow.
There was a period, not long after the beginning of the sanctions, when the prospect of seeing international acts in even Russia’s wealthiest two cities seemed in doubt. “Moscow Can’t Afford Foreign Performers,” read a 2015 headline in English-language newspaper The Moscow Times, citing a 95% fall in shows by western acts due to unaffordable fees.
“We shouldn’t tour Russia because of Putin? Yeah, well, everybody should quit touring the USA then”
In Moscow and St Petersburg, the market has bounced back – if not all the way, then enough that the relatively lighter schedule of international shows has sharpened demand for what tickets there are.
“It’s an interesting tendency in Russia lately,” says Ed Ratnikov of leading promoter Talent Concert International (TCI), which in October sold a 51% share to CTS Eventim.
“The market is going down due to sanctions and government politics, and people’s income is not getting any better but the business is growing.”
In the absence of a full complement of international stars, Russian acts including Basta, Max Korzh and Zemfira have graduated to stadium status. Leningrad, formed in the 1990s in St Petersburg, the city formerly of that name, made Russian music history this summer with a stadium tour, playing Kaliningrad, Moscow and Nizhny Novgorod in June, amidst a series of dates in arenas. Hot local pop stars include Zivert, Artik & Asti, Cream Soda and Shortparis.
“We have a new generation of kids who were born and live in the digital era,” says Ratnikov. “They have their headphones on 24 hours a day, they share tunes fast and make unknown artists well known in hours. Those kids are the majority of our ticket buyers now and are eager for quality entertainment.”
Russia’s instinct, where international music was concerned, was always to go big, and its early outdoor spectaculars – the 1989 Moscow Music Peace Festival at Luzhniki Stadium (featuring Bon Jovi, Ozzy and Scorpions), 1991’s Monsters of Rock at Tushino Airfield (Metallica, AC/DC et al), The Prodigy in Manezh Square in 1997, Chili Peppers and McCartney in Red Square in 1999 and 2003 – live long in the memory.
“The market is going down due to sanctions and government politics, and people’s income is not getting any better but the business is growing”
In spite of ups and downs, that pattern of serial one-offs has given way to a steady, professional business in the past decade or so. The most seasoned Russian promoters now have three decades of experience to draw upon, and the main cities have taken big steps too.
“Russian infrastructure has improved significantly,” says Ratnikov. “We have new airports, world-standard sports arenas and stadiums as well as recognisable hotel chains. Russia has improved very well during the last decade.”
Estimates of the size of the ticket market in Russia range from R45billion (£545m) to R60bn (£727m) per year [source: PwC]. Subject to more favourable economic and diplomatic conditions, there is still an enormous amount of room for growth. Moscow has a population of 12.4m, St Petersburg 5.4m, and in the comparatively dormant secondary markets there are 13 more cities of more than a million, led by Novosibirsk, Ekaterinburg and Nizhny Novgorod. Partly because prices are often out of reach for average incomes, concerts sit behind cinema and theatre in turnover terms. But an ever-growing contingent of promoters is working hard to shift the balance.
“The market is getting more and more competitive, while the incomes of Russians don’t tend to rise,” says SAV founder Nadia Solovieva. “But we are used to this economic reality –that’s the way things usually are here.”
As infamous art collective Pussy Riot can attest, politicians and the country’s legal system are not against interfering with the Russian music scene. Homemade hip-hop has come under fire for its poor moral character, and a spate of small shows were shut down last year in a crackdown on allegedly seditious youth music that affected artists including Siberian rapper Husky and teen band Frendzona.
Increasingly, big business is taking an interest in the Russian live sector
But increasingly, big business is taking an interest in the Russian live sector. European giant Eventim’s move into promoting follows its ownership of ticketing operation Parter.ru since 2006. However, in practice, the major corporate influence on the Russian live business comes from domestic tech, mobile and finance juggernauts, which have claimed entertainment tickets as a feature of their own wider online offering.
Russian Internet titan Yandex took its share of the e-ticketing market to an estimated 20% in the summer with the acquisition of TicketSteam. Yandex’s rival Mail.Ru Group invested in ticketing aggregator TIWO’s Moscow-based Ticketing Platform at the same sort of time, while Russian bank Tinkoff has held a 20% stake in concert ticketing market leader Kassir.ru since 2018, when mobile giant MTS also snapped up leading ticketers Ticketland and Ponominalu.
“It is about creating ecosystems and marketplaces,” Ticketland CEO Vitaly Vinogradov told the IQ International Ticketing Yearbook 2019.
The next step for Russia and elsewhere, believes Katerina Kirillova, co-founder of local blockchain distribution ventures Tickets Cloud and Crypto.Tickets, will be a shift to smart ticketing. When promoters and vendors can track and control tickets using blockchain technology, she suggests, data, marketing and anti-touting value will follow, while consumers are rewarded with secure tickets and music-driven social networking opportunities.
Existing tickets needn’t be threatened by the dawn of crypto, according to Kirillova, who adds that Tickets Cloud is in the process of securing its next funding round. “None of the traditional resellers wanted to integrate with us, because they considered us competitors, but now we have almost all the key resellers integrated as partners,” says Kirillova. “We don’t want to compete with them, but we want to provide the technology.”
Continue reading this feature in the digital edition of IQ 87 2019, or subscribe to the magazine here