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United in crisis: The view from Russia

A brand new live industry association has formed in Russia in response to the coronavirus crisis, as promoters in the region prepare for a long-term economic downturn

By IQ on 28 Apr 2020

United in Crisis: The view from Russia

Melnitsa Concert Agency's Park Live may have to be rescheduled due to the pandemic


image © Alexey Makhov/Park Live

Promoters in Russia view a fall in purchasing power and a reduction of disposable income as the main obstacles facing the reopening of the live business and have united with other sectors of the industry to form a new live entertainment industry association in an effort to safeguard their future.

In Russia, as in many markets worldwide, all concerts, tours and festivals have been officially banned for an indefinite period of time. Although many local summer festivals are still on sale, “nothing good is expected for summer 2020,” Sergey Podgorny, COO of majority CTS Eventim-owned promoter TCI, tells IQ. “It is obvious that large-scale events will be the last to return.”

Podgorny says TCI is “optimistic” about starting work again in September, but cautions that a “bad scenario”, which sees no live events for the remainder of the year, is a possibility.

Most of TCI’s local and international summer events – and even some autumn ones – have been postponed, with the company turning to “economy mode”, cutting costs amid a dearth of sales.

A similar tale is told by Maria Axenova, of Moscow-based promoter Melnitsa Concert Agency. The promoter is currently working to reschedule its July festivals, Moscow Park Live and Kiev UPark, which are set to feature acts  including My Chemical Romance, Deftones, the Killers and Sum 41, to 2021, along with tours and stand-alone concerts.

“The most frustrating thing about this pandemic is that it is so very bloody unknown,” says Axenova. “What is clear, however, is that all live events are doomed at least before the fall.”

Sergey Babich of Colisium International Music Forum, which represents promoters in Russia, Ukraine, Kazakhstan and Belarus, agrees that events will most likely restart at the beginning of autumn in Russia, although this could differ across the country, as each region has the authority to select its own quarantine exit strategy.

“Both quarantine and the pandemic have revealed that we have a large industry, but we don’t have an authority that can negotiate with the government”

Of Colisium’s other represented markets, Kazakhstan offers the most cause for optimism, with venues planning to reopen in June and governmental support on offer such as tax breaks, rent holidays and unemployment benefits. Ticketing company Ticketon.kz is also allowing fans to buy tickets on credit, with the agreement of banks and credit card companies, in a bid to avoid complete stagnation of sales.

Elsewhere, Ukraine’s lockdown is due to be lifted on 10 May but, according to Dmytro Feliksov of Concert.Ua, events will restart no earlier than July.

“As for Belarus,” says Babich, “the situation is more difficult.” With no official event ban or lockdown enforcements, the government is simply recommending the public avoid “crowds”. The authoritarian nature of the Belarussian government has led to a general acceptance of the advice.

“No one ventures out to organised events,” says Babich. “There are a few sales for autumn, but there are a lot of doubts about summertime.”

As for promoters the world over, the issue of ticket refunds remains the “main problem” for TCI. In view of the current situation, the government has extended the grace period for issuing refunds from 30 days to 90.

So far, however, TCI has received few refund requests, as fans approach the situation with “stoicism”. “I want to believe that fans will be waiting for their artists,” says Podgorny. TCI is also working with ticketing partners to develop a strategy regarding refunds and compensation for fans.

Unlike in other European countries, the Russian government has not yet provided any direct financial assistance for different sectors. “At the very least, the industry is counting on a tax cut and a delay in ticket refunds of 12 months,” says Podgorny, adding that the government is expected to announce a new package of measures in May.

“We are bringing together those who were separate, and working together for the best future of the entire industry”

In order to gain more lobbying power with the government, Colisium and other members of Russia’s professional music industry have joined forces to create an official live music industry association. Promoters in Russia including SAV Entertainment, PMI and NCA were previously represented by the no longer operational promoters’ association Soyuz Concert.

“Both quarantine and the pandemic have revealed that we have a large industry, but we don’t have an authority that can negotiate with the government,” Vladimir Zubitsky of SAV Entertainment and Russian Show Center, said in an interview about the formation of the association.

“The Association will include all major players, all active people from the distant regions of Russia, and everyone involved in the industry: technical companies, producer centers, artist management, security, insurers.

“We are bringing together those who were separate, and working together for the best future of the entire industry.”

The 20-plus co-founders of the association are currently preparing documents for the registration process, and plan to begin in full force in the summer although, the founding group has been working together de-facto since mid-March.

The industry association is a welcome addition to Russia’s live community, as promoters predict a rocky road ahead.

“The market will not be able to recover for a year or so,” says Michael Shurygin, head of National Concert Agency (NCA). Shurygin believes that the impact of the pandemic will change even fundamental elements of the business.

“These [postponed] events have been transferred from the world of flourishing business to the world of recessions”

“Free online shows, possible new restrictions on attending live shows, decrease in peoples’ incomes – all these things will inevitably affect the customer and it is very likely there will be a drop of the show attendance in 2021,” says Shurygin.

The economic fallout from the coronavirus shutdown is a worry on the minds of all promoters IQ approached for this article. The commodity-sensitive ruble has been weakened by the collapse in oil prices in the past months, as global stay-at-home measures have led to a precipitous drop in demand.

“The drop of the ruble’s rate will greatly affect the local economy and possibly lead to higher costs (of everything),” says TCI’s Podgorny. “Combined with the collapse of many businesses affected by the epidemic and falling incomes this could be a serious problem for ticket sales.

“We will need to be more careful when choosing events and estimations for the upcoming concert seasons.”

Caution and uncertainty surrounding future shows is also affecting the deals that are currently being re-negotiated between agents and promoters for postponed events.

“All these events have been transferred from the world of flourishing business to the world of recessions, falling incomes, increased expenses and losses from 2020. So, such “re-negotiating” will not exactly be easy,” says Podgorny.

For Axenova, the “colossal fall” of consumers’ spending capacity is the main issue, especially that of the youth – “the very bulwark of our industry”.

“We all look forward to the return of a live dialogue between the artist and the audience”

“With so many businesses collapsing, we cannot expect a prompt bounce back of the market,” adds Axenova. In the meantime, Melnitsa is working on new online projects to generate financial assistance for artists and provide emotional support for fans.

Colisium’s Babich also sees the value of regular online activities to bring “additional monetisation” to the industry and for charitable purposes.

“We are very proud that online projects exist in our countries to support the medical sector, for example online concerts with donation systems in Russia, Belarus and Ukraine. All money collected from these concerts goes straight to support doctors.”

Online events are being supported by the largest media outlets in Russia, such as Yandex, Rambler, Mail.ru, Vkontakte, Odnoklassniki and MTS Mobile, with the opportunity for virtual reality (VR) and 360° video.

Although such virtual experiences offer a welcome respite from the tedium of lockdown life for many, the Russian live industry is raring to get back to the real thing.

“All online efforts are a good temporary substitute, but they definitely not replace a real live show, as a soccer game on TV will not replace a real vibe of a full stadium,” says Podgorny.

“We all look forward to the return of a live dialogue between the artist and the audience.”

 


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