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Festival heads talk costs: “There is trouble ahead”

Top execs from FKP Scorpio, DreamHaus and ARTmania discussed the impact of production costs and inflation rates on the 22/23 season

By IQ on 26 Sep 2022

FKP Scorpio's Stephan Thanscheidt

FKP Scorpio's Stephan Thanscheidt


European festival heads discussed the impact of spiralling costs on the 2022 and 2023 festival seasons at last week’s Reeperbahn Festival in Hamburg, Germany.

Stephan Thanscheidt (FKP Scorpio, DE), Catharine Krämer (DreamHaus, DE), and Codruța Vulcu (ARTmania, RO) were among the pros discussing higher expenses during the Festival Season 22/23 panel.

Thanscheidt told the panel that while Hamburg-headquartered FKP Scorpio sold out 27 of its 28 festivals, the margins were “complete shit” due to higher expenses.

“Production costs are up 25–30%,” he said. “It depends on the department because some [costs] are up just 10% but others were like 120%. This year we were put into a corner where we could either say yes [to the increase] or just not do the festival.”

The company’s festival portfolio includes Hurricane (DE), Southside (DE), Provinssi (FI), Sideways (FI), Greenfield (CH), Best Kept Secret (NL) and new festival Tempelhof Sounds (DE) – some of which were €30 to €50 more expensive to attend this year.

While FKP Scorpio sold out 27 of its 28 festivals, the margins were “complete shit” due to higher expenses

“We’re trying to [increase ticket prices] in a very smooth way,” said Thanscheidt. “If we get to €400–500 for normal festival tickets, we’ll have a problem. We’re trying to be very sensible in setting the prices. So we’re very happy that the audience was fine with that and we sold all the tickets without getting a shitstorm on socials or something.”

In Romania, rising costs are only exacerbated by the country’s close proximity to the war in Ukraine.

“The inflation rate is 15.5% which is extremely high so everything from production to personnel was completely out of proportion,” said Vulcu, CEO of ARTmania, Romania’s longest-running rock festival.

Vulcu told the panel that many of the festival’s partners backed out of supporting the 2022 event but the main sponsor, German hypermarket chain Kaufland, offered to make up the slack.

“They said ‘Okay, let’s give you some more money to survive. Can we take extra costs from you that we can put on our budgets?’ So it was a positive and totally unexpected turn but apparently, they were they are wanting to be the saviours of festivals,” she said.

“The inflation rate [in Romania] is 15.5% so everything from production to personnel was completely out of proportion”

Looking towards next year’s ARTmania, which is already on sale, Vulcu says it’s hard to see how the festival can spread skyrocketing costs.

“We book mainly internationally and the prices that I’m getting from some artists are not low but we can’t put the ticket prices so high that the young people can’t come,” she explained.

DreamHaus’ Krämer says the Berlin-based agency is facing a similar stalemate situation for next year’s festival season after their production costs increased 25–30%.

“No supplier will ever say ‘We’re going back to the prices that we had in 2019’,” she said. “So we could lower the cost of the whole festival experience but this would have a significant impact on the whole quality of it.”

CTS Eventim-backed DreamHaus is jointly responsible for organising and programming the Rock am Ring and Rock im Park festivals, which have a combined attendance of 150,000, among other events.

“We could lower the cost of the whole festival experience but this would have a significant impact on the quality”

Referencing Thanscheidt’s earlier point, Krämer added: “There are not that many suppliers that can supply festivals of our size so we’re also in a corner, where we can take it or leave it.”

Thanscheidt says the crisis will only get worse ahead of next year’s season, though he’s bullish about the industry’s ability to come up with solutions.

“Costs will not go down next year,” said Thanscheidt. “Gas and electricity prices are doubled now and they will be tripled in a few weeks. Inflation might go up again.

“There are some months of trouble coming up and the result is yet to be seen. But of course, we will all stay very positive because that’s what we always do in an industry in which most of us have a DIY background. So let’s see how we solve this but it will not be easy.”

 


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