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DEAG announces management handover

DEAG founder and CEO Peter Schwenkow has announced he is handing over operational management of DEAG to co-CEO Detlef Kornett.

Schwenkow, who will step back to an advisory role at the German-headquartered live entertainment firm, made the announcement today (23 March) during a reception for his 70th birthday held at Wintergarten Varieté in Berlin.

“After 46 years at the helm of the company I founded and in the best of health, I am announcing the long-prepared move to a new role,” said Schwenkow. “From 1 April 2024, I will assume the role of founder and senior advisor at DEAG and hand over responsibility as CEO.

“This step, on my 70th birthday, was planned for a long time and carefully prepared. The captain is leaving the bridge, but not the ship. I will continue to be part of the journey as an advisor to the company and – together with my son Moritz – as a major private shareholder in DEAG, in order to make my contribution to the company’s continued growth in the interests of all shareholders.”

He added: “Since 1978, we have continuously and successfully developed new products and markets with committed, loyal and creative partners and employees, without whom this growth would not have been possible. Today, with over 600 employees in seven countries at 22 locations, DEAG is one of the world’s leading live entertainment companies with continuous annual sales of over €300 million.

“Our permanent focus on our customers, artists and guests will continue to be the benchmark of our work in the future.”

“We are sure that – with your continued support – we can look forward to an exciting and prosperous future”

DEAG’s supervisory board paid tribute to Schwenkow for his decades of entrepreneurial work.

“You can be proud of your life’s work,” said supervisory board chair Wolf Gramatke. “And we are sure that – with your continued support – we can look forward to an exciting and prosperous future.”

Kornett, who has been a board member since 2014, was appointed co-CEO alongside Schwenkow last summer. He will be responsible for the firm’s continued growth, together with fellow board members Moritz Schwenkow, Christian Diekmann and David Reinecke, as well as SVPs Stuart Galbraith, Benedikt Alder, Jacqueline Zich and Oliver Hoppe.

Founded in Berlin in 1978, DEAG’s core markets are Germany, Great Britain, Switzerland, Ireland, Denmark and Spain.

Click here to read IQ‘s recent profile of Schwenkow, looking back on his 50 years in the business.

 


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DEAG set to return to stock market

German live entertainment powerhouse DEAG has confirmed its intention to return to the Frankfurt Stock Exchange in Q1 2024.

The group plans a listing and offering consisting of a capital increase of €40-50 million, together with an additional offering of existing shares from the holdings of current shareholders.

The company first went public in 1998 and delisted in January 2021 in the wake of the pandemic after accepting a takeover offer from its largest single shareholder Apeiron Investment Group and its Malta-based subsidiary Musai Capital.

Berlin-headquartered DEAG says the proceeds from the re-IPO will be primarily used to further accelerate its growth “in line with its Buy & Build acquisition strategy”, with a focus on “high margin” ticketing businesses and live entertainment opportunities.

As part of the move, DEAG plans to restructure the business into two new segments – live entertainment and ticketing and service – with a key part of the strategy being to drive more of DEAG’s ticket sales through its own ticketing platform. The firm intends to appoint an additional independent supervisory board member within six months of the listing.

“We believe that there is an enormous growth potential in our business,” says DEAG co-CEO Detlef Kornett. “From driving ticket sales toward our own ticketing platforms to acquiring companies which increase synergies within our group and strengthen our strategy of expanded growth in both our live entertainment and ticketing and services businesses, the road ahead of us is paved with opportunity.”

“The foundation of our business stands on our strong historical growth, as shown by the ever increasing number of events we offer since 2019”

The transaction is expected to consist of an admission to the prime standard on the regulated market of Frankfurt Stock Exchange, plus an offering of new shares together with an amount of existing shares from the holdings of current shareholders.

DEAG subsidiaries include Kilimanjaro Group (UK), Wizard Promotions (DE), UK Live, My Ticket (DE, AT, UK) and Belladrum Tartan Heart festival (UK). The live entertainment group announced a “consolidation break” in early 2023 after acquiring 15 companies in the previous two and a half years, including Scottish promoter Regular Music, Ireland’s tickets.ie. platform and German festivals Indian SpiritClassic Open Air and Airbeat One, along with CSB Island EntertainmentFane ProductionsGigantic.com and C² Concerts.

In its most recent financial results, released last November, DEAG trumpeted a “new level of revenue and earnings” after revenue leapt by 73.3% from €123.1m to €213.3m, compared to the last pre-Covid year of 2019.

Earnings before interest, taxes, depreciation and amortisation (EBITDA) also rose significantly. The company was aiming for revenue of more than €300m for 2023 as a whole. In 2022, DEAG achieved revenues of €324.8m and an EBITDA of €30.9m.

“The foundation of our business stands on our strong historical growth, as shown by the ever increasing number of events we offer since 2019 – recurring revenues from over 30 festivals, intellectual property created from children’s musicals to lightrails and our hallmark New Year’s Eve event at the Brandenburg Gate,” adds Kornett.

“We continue to expand our existing, and capitalise on new, business opportunities and develop strategies to complement this business growth in our existing and new markets. As we have shown in the past, we will look to the future with full confidence at the prospects for our business.”

 


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DEAG fully acquires EDM promoter I-Motion

DEAG says it plans to “continue playing an active role in the consolidation of the live entertainment industry in Europe” after confirming the full acquisition of electronic music promoter I-Motion.

The German-headquartered giant secured a majority 50.1% interest in the company back in 2019, and has now acquired the remaining 49.9% share from former JV partner LiveStyle, which formed following the collapse of the late Robert Sillerman’s SFX Entertainment in 2016.

I-Motion was founded in 1994 and draws around 250,000 visitors to its EDM festivals each year, including Nature One, Mayday, Toxicator, Ruhr-in-Love and Syndicate.

“The cooperation with I-Motion has developed very positively since 2019,” says DEAG co-CEO Detlef Kornett. “Our expectations have been more than fulfilled, both strategically and economically, so that the acquisition of all shares in one of Europe’s most successful EDM event promoters is now the logical next step for us.”

“We have steadily expanded our open-air and EDM events in recent years and see high potential for expansion in this area”

The live entertainment group adds that it will continue to drive its growth through M&A, and is placing a focus on complementary acquisitions in ticketing as well as expanding into other European markets and further business segments.

“Together with the long-standing managing director of I-Motion, Oliver Vordemvenne, and his great team, we have steadily expanded our open-air and EDM events in recent years and see high potential for expansion in this area, also in other European countries,” adds Kornett. “I am very much looking forward to the continued successful and trustful cooperation with Oliver and the I-Motion team as part of the DEAG family.”

DEAG is aiming to generate revenue of over €300 million (compared to €325m in 2022) and a further improved EBITDA compared to the previous year (€30.9m) in 2023.

“We are very pleased that we are now fully part of the DEAG family and will continue to write our success story,” says Vordemvenne. “Together with a strong team, we want to further develop our event formats and expand into new markets. We still have a lot of plans for the future.”

 


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The Great Refund Debate

With fans still sitting on event tickets that they bought as long ago as 2019, the industry is facing a dilemma when it comes to who merits a refund and who does not. And as Covid becomes endemic, should refunds remain obligatory for ticketholders who test positive? James Hanley investigates.

The race to contain Covid-19 outbreaks and variants over the last 24 months has been likened to a game of Whac-A-Mole. But as the international live music business begins to emerge from the horror of the pandemic, it will need its own mallet at the ready to combat the litany of fresh problems popping up day-to-day.

One of the more mundane but contentious debates to be sparked in recent months surrounds the matter of refunds. The issue was brought to the fore by Dead & Company and promoter CID Presents’ Playing in the Sand destination festival, which was set for Mexico’s Riviera Cancún over two weekends in January this year.

Amid the omicron surge of late 2021, organisers opened a 48-hour refund window for fans having second thoughts about attending (all ticketholders were ultimately refunded when the event was pulled at the 11th hour due to a spike in infections). However, CID declined to repeat the offer for its other January festivals: Crash My Playa and HootieFest: The Big Splash.

“If, at any point during the two weeks leading up to a particular event, the CDC Risk Assess- ment Level for Covid-19 for the Quintana Roo (Cancún) region of Mexico rises to a Level 4 or Mexico designates the area unsafe to hold an event, we will be offering full refunds to those not wishing to attend the particular event,” said a statement by the promoter. “We continue to recommend buying travel insurance, which may help protect against the risks of Covid-19 and travelling internationally during the pandemic.”

It was a similar situation at Wilco’s Sky Blue Sky “concert vacation” in Mexico, also in Janu- ary, produced by Cloud 9, The Bowery Presents, and Higher Ground Presents, which stressed its no-refund policy and encouraged festivalgoers to purchase travel insurance. “A refund, or the ability to hold one’s spot for a rescheduled date, will be available to purchasers if the event were to be postponed,” Cloud 9 told Billboard.

But far from limited to sun-drenched getaways, the refund question is pertinent at all levels of the industry, in every market across the globe. “There is a set Live Nation policy across the board,” explains Barnaby Harrod of Mercury Wheels, part of Live Nation Spain. “When an event is cancelled, you get an automatic refund. With reprogramming, the original tickets are, of course, valid for the new dates. However, if some- body can’t make the new show, or doesn’t want to, they have 21 days to ask for a refund, and that has been applied across the pandemic.”

Certain events and promoters also offer refunds or a voucher for anyone who is unable to attend due to testing positive. Harrod advises that every claim is assessed on its own merits.

“For exceptional refunds, which are requested outside the established timeframe, we work on a case-by-case basis,” he says. “So in the current climate, where the government has restrictions in place for people who have Covid, if somebody can certify that they have Covid, then they should be entitled to a refund.”

Elsewhere in Europe, AEG Presents France GM Arnaud Meersseman points to France’s “very protective” consumer laws, which allow customers to claim refunds up to five years after the event.

“Obviously, if a show is rescheduled or can- celled, it’s an automatic refund and there’s no discussion there whatsoever,” he tells IQ. “As for no-shows, as of today, they can warrant a refund. But we’ve seen in practice that it’s not really the case, as a lot of people don’t ask for them.

“The last big show I did was December at the Zenith Paris, and out of 6,000 tickets, we had 20% no-shows. The only other big shows I had be- tween September and December were two nights of Nick Cave, but they were seated shows at 2,000- cap each, and we had almost zero no-shows.

“Over here, what most people have done in practice is wait out a month in terms of refund requests, and if those refund requests haven’t come in during that time, we settle off the show basically. But that’s not really the law, I mean, people can ask for refunds after five years. But we’ve noticed that essentially, past one month, there’ll be the odd refund request here and there, but it’s really rare.”

DEAG executive Detlef Kornett says it is difficult to make general statements due to the fragmented nature of the German market but suggests most promoters have maintained a flexible approach to refunds.

“We have demonstrated a lot of flexibility and offered customers the opportunity to re-book their ticket if and when possible, use it for a different show, get a voucher, or in certain instances, even reimburse the ticket value,” he says. “That was true also if they were unable to attend due to Covid.”

DEAG’s UK subsidiary Kilimanjaro Live returned to action in August 2021, staging two arena dates by Gorillaz at The O2 in London. Kili CEO Stuart Galbraith attempts to sum-up the story so far.

“We never get 100% attendance – between 3% and 5% of people indoors and up to 10% outdoors buy tickets and then just don’t come – but we were back up at 95-97% attendance rates all the way through September, October, and November,” he says. “Then as omicron started to come into play and we headed into Christmas, those rates started to drop again to as little as 70% on some occasions.

“When we came back after Christmas, almost instantly, those attendance rates went back up to 95-97%, and that’s where they’ve been ever since. But what was very interesting is that virtually none of the customers who didn’t attend the shows before Christmas asked us for refunds. They’d just decided they weren’t going out and would take it on the chin.”

He continues: “The analogy I’ve used over the last couple of years is that, if you had an EasyJet flight booked that cost you £20 to £40, in my personal experience, I haven’t bothered to ask for a refund on that because I can’t be bothered. It’s just one of those things. However, if I’ve got a transatlantic flight, which is worth several hundred quid or thousands of pounds, I do want a refund on it. And I think that tickets and concert tickets fall into that EasyJet category – I don’t think people can be bothered to ask for the refund, to be quite frank.”

“People have almost been treating a ticket like something they bought off Amazon and saying, ‘Oh, we don’t really fancy that now,’ the day before. And at that point, what do you want the festival organiser to do about it?”

Paul Reed, CEO of the UK’s Association of Independent Festivals (AIF), reveals the organisation took legal advice with regards to refunds last year on behalf of its 90 members – and reached a definitive conclusion.

“The fact is a consumer is not legally entitled to a refund if they’re isolating and not allowed to travel, in the same way as if they were unable to travel for any other reason,” asserts Reed. “The view was that, ultimately, the customer is not due a refund, but I think it’s a decision that has to be up to the individual event. It is entirely at their discretion and there is no obligation. But from speaking to others in the industry, my sense is that it is being assessed on a case-by-case basis, irrespective of the legal situation.”

Reed adds that some AIF members have ex- pressed concerns that a “refund culture” has seeped in among punters.

“Perhaps it’s understandable, but people have almost been treating a ticket like something they bought off Amazon and saying, ‘Oh, we don’t really fancy that now,’ the day before. And at that point, what do you want the festival organiser to do about it?” he sighs. “You’re not due a refund, but I think that mindset has permeated a little bit more throughout festivals and live experiences – customer expectation shifting – and people feeling more entitled to a refund when it is more complicated than that.

“When you buy a ticket, it is binding, and that is all very clear in the Ts and Cs. I think customers need to understand a little bit more about what they’re committed to when they buy a ticket, so I don’t know whether some education is needed around that.”

Fans no longer able or willing to attend events are encouraged to sell on their tickets via face-value resale sites.

“Specific insurance is also available to the customer as a voluntary upsell, and I believe some travel insurance policies also cover it,” says Reed.

Guy Dunstan is MD, ticketing and arenas for Birmingham-based NEC Group, which manages five of the UK’s leading indoor venues including Birmingham’s Resorts World Arena and Utilita Arena, as well as national ticketing agency The Ticket Factory. He tells IQ the company has been proactive on the issue by offering ticket insurance with Covid cover included.

“I know that some venues and ticketing companies have been hit harder than others with regards to the refund situation,” says Dunstan. “We’ve been offering ticket protection insurance to customers for a significant period of time, so the refunds we’ve given have been pretty minimal because we’ve been able to point customers to the fact that they were offered the insurance at the time when they purchased the tickets.

“We were able to get that as cover quite early on in the pandemic through the ticket insurance provider that we work with, and it’s been of real benefit to us. So our sense is that we’re well protected from that moving forward.”

Down under, Live Performance Australia (LPA) administers the ticketing code of practice for the entertainment industry that outlines consumers’ rights to a refund. First released in 2001, the trade body reviewed and updated the code in 2020.

“While the impetus for the most recent changes was the Covid-19 pandemic, LPA was conscious to ensure any updates have a life beyond Covid-19,” says the group’s CEO Evelyn Richardson. “The ticketing code was widely used by the industry pre-Covid and will continue to be the go-to resource about refunds as Covid-19 moves to becoming endemic and beyond.”

Richardson says the LPA expects its members to treat ticketholders fairly if shows are forced to can- cel or are postponed due to government mandates.

“Whether ticketholders are entitled to a refund, exchange or other remedy will depend upon the ticket terms and conditions applicable when tickets were purchased,” she states. “Many companies have a Covid refund and exchanges policy, which sets out if ticketholders will get a refund, exchange or credit note if they are un- well with Covid symptoms, unable to attend the event due to contracting Covid, awaiting test results, [have been] in close contact, or [due to] border closure.”

With the world slowly emerging from the pandemic, the conversation turns to how flexible the live industry will be as things return to something like normal. Richardson indicates there could still be room for a little leeway.

“Ordinarily, if a ticketholder is unable to attend the event because they are unwell or other personal circumstance, they are not entitled to an automatic refund under Australian consumer law,” she says. “However, event organisers always have discretion to provide a refund or other remedy, if they wish, even though there may not be a legal requirement to do so.”

UK prime minister Boris Johnson has already announced the ‘Living with Covid-19’ plan, which has put an end to the legal requirement in England to self-isolate after a positive Covid test. Free testing has also been scrapped, although that isn’t an issue everywhere.

“They’ve never had free Covid tests in Spain,” testifies Madrid-based Harrod. “You would always have to go to the chemist to buy one.”

For Galbraith, however, the ramifications for the sector’s refund policy are obvious.

“Realistically, now that Covid has no legal status over and above any other disease, then that’s it, life is back to normal from an event organiser’s point of view,” he offers. “If somebody has flu, chickenpox, mumps, or whatever, and they can’t go to the show, then, unfortunately, that’s just part of life, and I think the same will be true of Covid.

“In the last two years, we have seen a significant increase in the number of customers taking out personal insurance on their tickets. For a very small percentage of the ticket cost, you can insure your ticket in the way that you can a holiday or anything else. That insurance, in many cases, does actually give you illness cover. So I think that is an easy customer solution going forward.”

“Now the isolation rules have changed, and you don’t have to isolate, then I think it just becomes like any other illness,” agrees Dunstan. “We all have to take a sense of responsibility to make sure that we’re healthy and well [enough] to be going to events. But as for venues and companies that have been offering refunds if you can demonstrate you are Covid positive, I can just see that going away.”

On that point, there appears to be something approaching a consensus.

“Once it is endemic, Covid would most likely not be a reason that entitles you to a refund as such anymore,” muses DEAG’s Kornett.

“At the end of the day, if somebody has gastroenteritis or common flu, or gets grounded by their parents because they have bad grades, do you refund them?” concludes Paris-based Meersseman. “At some point, there is no law in this, it’s going to be commercial practice. Once this virus becomes endemic and breaks out of the pandemic stage, I don’t see us offering refunds for people who have Covid.”

 


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New restrictions in Germany: Promoters react

Germany’s national and regional leaders have moved to ban unvaccinated people from much of public life, including live music venues.

In a bid to curb the fourth wave of Covid-19, only those who have been vaccinated or recently recovered from Covid will be allowed in cultural venues, restaurants, cinemas, leisure facilities and many shops.

According to outgoing chancellor Angela Merkel, vaccinations could be made mandatory by February.

The so-called 2G rule (meaning genesen for recovered in the past six months and geimpft for vaccinated) was already in operation in some German states but it will now be enforced nationwide.

The 2G policy is part of a wider set of restrictions that will see clubs close in areas where 350 cases have been recorded per 100,000 people in the past seven days (the national rate is over 400).

Outdoor events are limited to 50% capacity with a maximum of 15,000 attendees while indoor events are restricted to 50% capacity with a maximum of 5,000 attendees. Masks are mandatory at all events.

“[The 2G rule] encourages vaccination and it is a high vaccination rate that our industry needs in order to return to normal”

German promoters have welcomed the nationwide implementation of the 2G rule but expressed major concerns about varying restrictions on social distancing and capacity, and emphasised the need for further financial support in 2022.

“We believe that setting clear rules is helpful and good for our business, as long as they are sensible and rational and therefore welcome the 2G rules,” says Detlef Kornett, CEO of Berlin-based promoter and ticket agency, DEAG.

“The live industry pushed government already in the summer of this year to introduce the 2G rule for all live events. It takes away the confusion about tests, certificates and how to check and record them which overall makes operations of a live event easier. But it also encourages vaccination and it is a high vaccination rate that our industry needs in order to return to normal.

“However the 2G rule is then accompanied by capacity and social distancing– rules that vary by federal state in Germany, by indoor and outdoor and these rules are subject to interpretation.

“However that variation of rules makes touring and even single concerts impossible and results in uncertainties and injustices throughout Germany. The end result is that live events are in some instances made impossible or economically unsound.

“That variation of rules makes touring and even single concerts impossible”

“The live industry is facing again a ban to operate and provide their service to consumers which is devastating in the end,” he concludes.

Dieter Semmelmann, CEO of Semmel Concerts, believes the new 2G rule may incentivise live music fans to get vaccinated in order to attend concerts.

According to the promoter, Semmelmann has already produced a myriad of concerts with the 2G rule and has found that the vaccination rate across their 3G events is “very high”.

However, the Semmel Concerts CEO says he’s concerned about how the new restrictions will impact demand for live music.

“The acceptance of events going on sale currently or during the pandemic remains weak. Thus governmental bridging support for the live-entertainment industry will also be necessary in 2022.

“Besides that, a solid commitment that at least vaccinated and recovered people will definitely be able to attend concerts in the future and buy tickets with a good conscience would be of crucial importance,” he adds.

Germany is treading a similar path to neighbouring country Austria, which previously imposed a lockdown on unvaccinated residents and recently became the first European country to announce mandatory Covid vaccinations.


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One Year On: Industry leaders on the Covid anniversary

Even before ILMC in 2020, a number of countries were beginning to shut down when it came to mass gatherings such as concerts and live entertainment, while for many ILMC 32 attendees, the artist showcases that week in London were the last live performances that they witnessed.

Talk about the coronavirus, back then, swung between the hope that it was just a new form of flu, to fear that we might have to postpone a month or two of upcoming dates. Certainly, nobody was predicting the loss of a full calendar year of events and the redundancies of countless thousands of industry professionals around the world.

Indeed, as the year progressed and restrictions imposed by governments on everyday activities even drilled down to how often you can leave your home, the optimists among us still believed that, maybe, festivals in August and September might happen, allowing indoor venues to reopen in October.

Fast-forward to February 2021, and despite vaccine programmes inoculating millions of people every day, there’s a growing consensus that there might not be any kind of outdoor season in the northern hemisphere until next year, while a few hopeful souls are holding out for indoor shows by November or December, albeit featuring domestic talent rather than international superstars.

“Everybody underestimated the impact of Covid,” admits Christof Huber, general secretary of European festivals organisation, Yourope. “I remember being at the Swiss Music Awards in February last year, on the day when all the big events were banned in Switzerland. But our attitude was that in two weeks we would be back.

“The strange thing is, we could see what was happening elsewhere, but nobody was talking about it. Now though, we’re all working desperately hard and trying everything possible to make things happen. But the general consensus seems to be that Q4 is when we might be able to return.”

The gradual dawning of the reality of Covid-19 has been a harsh lesson for an industry that thrives on optimism and creativity.

“Governments are not using our expertise and instead they are relying on bureaucrats. If we could at least get a seat at the table with them, we could help come up with solutions”

“After the UK government announce on 22 February, we now have a ‘nothing before’ date, which has really helped us,” notes Toby Leighton-Pope, co-CEO of AEG Presents in the UK. “For so long we were operating in the dark not being able to plan for the future. Now we know officially there will be nothing before 22 June and although I’m not 100% confident we will be fully open directly after this, it does give us a decent roadmap to work to.

“I’m not a big fan of socially distanced gigs. Artists rely so much on the vibe for the crowd and seeing so many empty seats from the stage cannot be fun for them. It also doesn’t work financially for the artist, venue or promoter. In a doomsday scenario, if we never get back to full capacities, then I guess we have to deal with it, but for now, I’m not a fan.”

John Reid, Live Nation’s president of concerts in Europe, comments, “The reopening timeline will differ from region to region. The vaccine roll-out is encouraging and will underpin confidence. As that continues to scale we will be able to get back to regular capacities, and we’re still hopeful some events are able to return sometime in the summer.

“We are working with governments, scientists and local authorities to make sure that, as soon as it’s possible to do so, we’ll be there and ready to go. Don’t forget, there are markets in Asia Pacific that are already opening – it was great to see Rhythm & Vines festival taking place in New Zealand over the new year.”

Those regional idiosyncrasies are also highlighted by UTA co-head of music, Sam Kirby Yoh. “The need for industry support varies from country to country,” she says. “Smaller European countries like Norway or Iceland have prominent music scenes, deeply ingrained into their cultures, and their local fundraising efforts have been quite successful. Additionally, if a country’s recovery from Covid-19 is going successfully enough for domestic artists to be able to perform, we anticipate that it will open itself up to artists from nearby countries shortly thereafter.”

Detlef Kornett, Deutsche Entertainment AG’s CMO and head of international business affairs, is more blunt about the year ahead for the live entertainment sector. “I foresee that come March or April, government in the UK, but less so across Europe, will have run out of their reserves and will put on the brake for live music industry grants and support. Whereas continental Europe continues to support the event industry in various degrees, but all the way until the end of 2021 – that type of support is currently not foreseeable in the UK. So I’m afraid that, for us in the UK, the hardest days are yet to come, unless the government-backed insurance plan and flexible furlough schemes fall into place.”

Kornett is brutally honest about the current state of the business. “US artists are shying away and are not committing to anything before, possibly, the end of the year, but most likely 2022,” he says. “The local authorities have already said that no matter what happens they do not want a festival in July. That leaves the big question about what can be done in August, because it won’t work that events are banned until 31 July but then on 1 August you can have 50,000 people in a stadium. It will be gradual, with social distancing and test events, and depending on those results, we may be encouraged to do more. But that gets you to September or October, and it’s hard to see a full O2 [London] on the first of October as well, in the current circumstances.”

“What’s really important now, is to ensure that the industry is ready to ramp up as soon as we get the go-ahead”

Investing time in the future
One consistent observation from many involved in the live music supply chain is that never have they worked so hard but for zero financial gain. Agents and promoters have spent the past year endlessly postponing shows, securing new dates for the tour and making sure everything is in place for the tour to happen, only to have to do the exact same thing weeks and months later. It’s a similar tale for other professions in music.

“There’s a big pastoral role in my job and it’s all about keeping everybody – not just the band members, but everybody in our wider family – motivated and keeping morale up,” says Joyce Smyth, manager of the Rolling Stones. “I’m very fortunate because the Stones have such a terrific work ethic, and right from the outset, Mick’s first question was ‘What can you give me to do? We need some projects!’

“So there has been new music released. The single ‘Living in a Ghost Town ’was rather apt for our times. Goats Head Soup came out as a nice re-release, and it’s quite tricky organising that because the guys are all in different places: they’re not in one same jurisdiction, so it can be a challenge to keep everything cohesive. At the end of the day we had to be innovative and not dwell on what we can’t do and what we feel we’ve lost, but just concentrate on what we can get on with? As Keith would say: we’ve just got to hunker down and get through this.”

It’s a similar story for solo artist Imogen Heap, who tells IQ that uncertainty over Brexit and then the coronavirus forced her to shelve some international tour plans, leaving a blank hole in her usually packed schedule. “But what has come out of that are many new initiatives – lots of projects that would not have come about had I had the usual team of eight people around me, but who have had to go on furlough when there have been no revenues coming in,” says Heap. “It felt like it did ten years ago, without the team and back on my own. But I’ve enjoyed a greater closeness and a reawakening of the relationship with my fans, which is really, really positive and oddly, in a roundabout way, mentally helped to pull me through this period.”

Indeed, with the Stones taking the time to create some new music, Heap reports that she also has been rekindling her love for songwriting. “One of the fans on our weekly call suggested I try meditating,” she explains. “The effect I get from meditation in a ten-minute breathing space, is the same as I’d get when I was improvising with a piano as a child – it creates a calm and a space for everything. The combination of that and speaking with the fans every Thursday brought me out of a really quite awful depression.”

With her fans viewing her improvisation sessions, they noted down their favourite moments and entered them into a spreadsheet for Heap, suggesting which ones they want me her to make music out of. “For seven or eight years I haven’t written a song unless there has been a project associated with it – mainly for financial reasons – but this time there was no reason and it’s just because the fans liked it and I liked it,” she says. “And it feels so good to just be a musician again with no agenda – it feels like I’m 15 again. I’m just writing music because I want to.”

“The fans are loyal to their artists and our festivals – 83% of fans are holding on to their tickets for rescheduled shows, and 63% for festivals, which is incredible”

That element of rediscovery is something that AEG’s Leighton-Pope can draw parallels with. “Personally, I’ve found that everything is not as urgent as we once thought it was,” he says. “That allows us to spend a bit more time to think about things and give more attention to the planning process.

“Taking some time off also has its benefits. Talking to people and realising that not killing yourself with work every day was actually beneficial was a revelation. So, being able to work from home and to spend more time with family and friends helps in all aspects of your life, including work.”

That time off has, perhaps, allowed people to put their work/life balance under the microscope, helping to retain some of the positivity that otherwise might have evaporated after such a lengthy lay-off.

“Of course, everybody is frustrated, but I have not heard any negative vibes in the sense of just giving up,” states Yourope’s Huber. “Everybody is just concentrating on trying to arrange whatever is possible in their own country.”

However, highlighting the fact that no two countries are dealing with the pandemic in the same way, Huber says, “There are a lot of umbrella programmes in the Netherlands and Germany and Austria and Switzerland, for example, but we also hear from people in other countries who have absolutely nothing – zero governmental support – and you can only imagine how frustrating that is. But the people in those situations are the true survivors who try to solve things differently, because maybe they were used to similar situations in previous years. And no matter how difficult it is, even those people are saying that they are going to come back.”

That’s music to the ears of Leighton-Pope, who believes the industry’s work ethic throughout the past year will pay dividends when normality finally returns. “The thing is, if you’re late to the party, then you will miss out – you have to have tours pencilled and venues held and put in all that hard work, even though the dates keep shifting,” he says. “If you’re not ready to go on the day the green light is given, then you’re definitely going to be scrambling to catch up with everyone else who has put in that hard graft.”

Kornett agrees. “For a company that cannot host any events, we’ve all been flat-out busy because you’re chasing the events that you need to postpone or cancel; you’re chasing government grants or subsidies; you’re chasing banks and everyone else for financing; you’re re-projecting the re-project of the re-projected business; and when you’re done with all that, you start from the beginning again…”

“I’m afraid that, for us, the hardest days are yet to come”

Brexit
For those businesses operating in Europe and the UK, the past few years have been dominated by what the potential fallout from Britain leaving the European Union might be. With that date now passed, what has become apparent is that international touring didn’t even make it on to a list of priorities for policy makers, leaving the industry floundering to find solutions before venues are allowed to reopen.

Issues over work permits and visas have recently received a lot of publicity, thanks to the support of some high-profile artists – notably Elton John – but there are other significant hurdles that the industry at large will have to overcome to allow the successful resumption of international tours.

“With Covid falling as it has, although it has been an absolutely appalling time for everybody, it’s been a really sour blessing, because in an otherwise normal year, the industry would have come apart at the seams,” states Stuart McPherson, managing director of trucking firm KB Event, which has had to find £500,000 (€579,000) to open a new EU-based depot in Dublin.

“I’ve been living this for three years now to try to come up with solutions and options for solutions, because until 23 or 24 December 2020, we were not 100% certain, from our part of the industry, about where we were going. So we had to have different strategies laid out in terms of which button we were going to press in case of whichever scenario we found ourselves in.”

As things stand, McPherson explains that UK trucking companies can no longer legally tour in Europe as a result of Brexit, hence his newly opened European headquarters. “Our choices were threefold: either we do what we’ve done and move into the EU, or we become a domestic-only trucking company and cut our cloth accordingly;, or we shut down and go home. So it was a no brainer – we need our UK company and our EU company.”

Underlining the lack of support the sector has had from government, McPherson adds, “If we had been live and had tours out in January and February, the way we normally have, then we would have been in a world of pain.”

That situation is acknowledged by DEAG’s Kornett, who observes that under current Brexit rules, “Effectively, as a tour, you are better off hiring European trucking companies and equipment, touring Europe, and then going through the border exercise only once when you enter the UK. But what will that mean for all the stage and production companies in the UK? So many businesses will be forced to open European subsidiaries.”

“I’m very fortunate because the Stones have such a terrific work ethic, and right from the outset, Mick’s first question was ‘What can you give me to do?’

For his part, Live Nation’s Reid says, “Partners on all sides are invested in finding the optimal process, and lobbying groups across the UK and Europe are working hard on how to make travel work for touring acts. One up-side of the pause in live is that we have time to plan so that when restrictions are lifted across the markets the industry can still retain its strong position internationally.”

Rather than bemoaning the situation, McPherson is hopeful that his trucking peers will also invest in EU depots. “I know that a couple of our competitors are moving in to Holland, which is great news,” he states. “For the health of the industry, we need as many of the suppliers to be able to service the clients they currently service – if there are not enough suppliers to service everyone, it’s going to be a big problem.”

But the price to remain in the market is steep, as it’s not just the case of having a postal address in the EU. “Legally, we have to replicate the company,” McPherson informs IQ. “To get an operator’s licence for our trucks, you have to have physical parking space for the number of trucks that you want on that licence. So if I want a licence for 50 trucks, I have to have a depot with enough land to park those 50 trucks on it. We also have to have an office to store all the records, and we require a transport manager based in that EU state.”

And the expense does not stop there. All of KB Event’s drivers will now have to pass their Certificate of Professional Competence qualifications in Ireland to allow them to continue to drive in the EU. “Another kicker is that my insurance company cannot insure my trucks in the EU, so I also have to replicate my insurance in Ireland alongside my insurance in the UK: my insurance is £300,000 so I have to replicate that so we can use both fleets. It’s a horrific place to be, but it’s the right thing to do for the health of my business and for the health of my clients.”

Plotting routes to recovery
Presuming there will be enough trucks and suppliers available when markets and borders start to reopen, the plans that industry professionals have been adjusting for the past 12 months follow similar theoretical paths.

“For European touring to resume, major markets, including France, Belgium, the Netherlands, Scandinavia, Spain and Italy, will need to reopen with no quarantines and with venue capacities that make financial sense,” says UTA’s Kirby Yoh. “Australia and New Zealand have to be at a point where fans can travel between countries, with limited or no up-front quarantine costs. This is a similar case with Asia, with particular reference to the importance of Japan.”

Kornett believes we should be focusing more on the strides being made in medical technology to speed up the return of live events. “I don’t think we’re talking about rapid testing enough, as we’re all a bit obsessed with vaccination,” he says. “There are tests out there now that only take three minutes, so logistically, we could ask event attendees either for vaccination proof or give them a quick test to get a reasonable amount of people through the doors within two to three hours. That could save good-sized outdoor events in the summer, as well as moving indoors to arena events in the fall.”

“We need to look after each other, because things are really tough”

Stones manager Joyce Smyth is cautiously open to the idea of fans being asked for proof of vaccination, but notes, “It all depends on the jurisdiction of the country you are playing in and the rules in that particular territory. And I also wonder who pays for all of this, because I can see the venues wanting to pass the admin cost on to the promoters, who will want to pass it to the artists, and that then is passed on to the fans, so it becomes a tricky proposition. But if it’s what is required to open up, then we’re going to have to do it.”

Leighton-Pope is a fan of health screening. “I like the idea of the vaccine passport and the idea of the whole world having one, which might force anyone who had not had the vaccine to join the club. I’m hoping that by the summer, maybe 75% of the UK population will have had the vaccine, and then we need a plan – a vaccine passport could be part of that – but more to the point, we need a plan that the government will support.”

The matter of government support is a major issue for Yourope’s festival organisers, who are frustrated by the lack of communication from their respective policy makers. “Everybody has worked very hard to come up with concepts that might work, but we’re not getting any feedback from governments,” reports Huber. “We hear nothing about under what circumstances it might be possible to be back under full capacity, or even when we will be allowed to do business again in any format.”

He continues, “Our business is very flexible. We saw that last summer with people finding ways to go back into business, and not just for themselves – it’s for the artist, for our employees, and we need to keep the sponsors aboard otherwise they will leave to different sectors. So it’s a multilayered thing that we need to go back to business. But we’re just not getting the communication about which circumstances will allow this.”

Personnel issues
One serious area of concern is the prospects of the business successfully reopening if there is a shortage of skilled professionals available to help artists get back out on the road.

“What’s really important now is to ensure that the industry is ready to ramp up as soon as we get the go-ahead, so supporting crew and freelancers has never been more important,” says Reid. “Crew Nation has raised over [US]$15m, helping 15,000 live music crew members across 48 countries globally, and we hope to help even more until we can come back in full. And we’ll also be advocating for prep and planning, so shows can be teed up to play as soon as it’s safe – given the longer lead times required to tour we need to be adjusting along the way so we don’t have crew spending extra months on the sideline once society begins to reopen.”

“Talking to people and realising that not killing yourself with work every day was actually beneficial was a revelation”

It’s a problem recognised by everyone. KB Event’s McPherson tells IQ, “[Covid] has been brutal on the freelance workforce, but we’ve been working with stage managers and production managers to try to find them van jobs or labouring jobs or just anything to try to help them out. We need to look after each other, because things are really tough.”

Reid adds, “The whole industry has been working hard to support the ecosystem that we rely on, but it’s undoubtedly been tough all round for people who work in live events. People are eager to get back to work and we’re confident we’ll be able to staff up appropriately as things ramp up.”

Smyth reveals that the Stones have been playing their part, by “aligning with organisations and groups who are trying to help crew survive this – and not just our crew, as that’s the easier part and we can look after our own. But there is a whole industry out there and we are in danger of losing this expertise unless something is done. So we’re involved in campaigns that raise awareness – governments could definitely provide a little more help than they already are.”

UTA’s Kirby Yoh believes that Covid has laid bare some of the weaknesses in the live sector. “The live music industry’s previous system was more fragile than we had realised and did not provide enough support for vendors, crews, venues, artists and more,” she states. “It is important that we strengthen our infrastructure to include more provisions for these parties. Also, Covid-19 has reinforced the importance of artist representation when dealing with the industry’s governing bodies.”

Meanwhile, Kornett says DEAG has been working with its partners throughout the pandemic in an effort to keep them solvent. “When you work on big events for multiple years, you end up being vertically integrated with some of your suppliers, so we went out with some of them and applied to run testing centres and vaccination centres – it’s building the set, thinking about ingress and egress – so it’s what we’re used to. That obviously isn’t going to save anyone’s bacon, but it’s at least something toward paying the bills.”

And for her part, Heap observes, “The end of live music has given artists the time to look at all their revenue streams closely, so that’s why people are beginning to speak out about the rates they get from streaming, for instance, and that campaign for fairer treatment is gaining support now.”

While Heap has been working diligently for a number of years on her own Creative Passport scheme, helping music makers to access, update and manage their own data, she is quick to add, “I’m very grateful to the people who are going into Parliament to speak about all of these things on our behalf. I’m doing my own little bit from my corner through the creative passport, trying to help ease of flow between different services and trying to make sure you have all the required verifications, but there’s only so much we can do.”

“In many ways it’s been a beautiful time and I’ve felt very supported and creatively free. It just hasn’t brought in any money”

Lessons
With everyone looking forward to the long-awaited return of live music, whenever that may be, the professionals that IQ spoke to were universally upbeat about how people have pulled together to weather the storm of the past year.

Live Nation president Reid says one of the key lessons he has learned over the past year is to “never take anything for granted.” He applauds Live Nation staff for their hard work throughout the crisis, and admits to being pleasantly surprised by the patience of fans. “Our teams are innovative and have pivoted to adapt to the unimaginable challenges that the last year has thrown at us,” says Reid. “The fans are loyal to their artists and our festivals – 83% of fans are holding on to their tickets for rescheduled shows, and 63% for festivals, which is incredible.”

Accepting the success that livestreaming has had during the past year, AEG’s Leighton-Pope nonetheless counters, “Professionally, I did not get into the music industry to spend my time on Zoom, or to watch concerts on my computer. I love the live interaction and that’s why I like being in this business – and we’re finding out that is really hard to replicate.

“The live streams that I’ve seen are like good TV shows, but I have not had a hair-on-the-back-of-my-neck moment watching anything on my computer like I do at a gig, bar, club, stadium or festival.” When it comes to Covid’s lessons, he adds, “I’ve learned that we can work from home very capably: the idea of being in an office for five days a week now sounds antiquated.”

Stones manager Smyth also tips her hat to the fans, and voices hopes that after more than a year without events, the scalpers and touts will be confined to history. “The whole secondary market is terribly pernicious,” she says. “I can see the scale of it because I follow our ticket refunds. Lots of wonderful fans have held on to their tickets for our postponed shows in the States, even though I’m sure lots of them are suffering and have maybe lost their jobs. It’s apparent, however, that much of the returned inventory is from brokers – it’s not the fans who have managed to buy blocks of tickets. So what is going on there? We’ve talked about it endlessly and I hope this lockdown situation is an opportunity for somebody clever to clean this up a bit.”

UTA’s Kirby Yoh says that fan loyalty coupled with the growing desire for live entertainment should negate the need to slash ticket prices when on-sales restart. “We would need to re-evaluate ticket pricing once touring resumes, based on local economies,” she says. “At this point, we don’t think a widespread drop in ticket prices would be necessary for fans to return to live shows, as there will be a real appetite for people to see shows again.”

But she is determined to make sure that strides made in recent years regarding equality are not swept under the carpet. “Much work still needs to be done to increase diversity and equality within the industry,” she stresses. “I encourage everyone to get involved in Diversify the Stage, Noelle Scaggs’ initiative focused on improving hiring practices and bringing more underrepresented individuals into the live music and touring sectors of the business.”

“I feel that, more than ever, we are all working in the same business and there’s a lot of dialogue and positive exchange, so hopefully we will come out of this stronger”

Heap says, “I think we are at a turning point. But sometimes you have to hit rock bottom first. I don’t know if we’re at rock bottom, but we must be pretty close.” And she adds, “In many ways it’s been a beautiful time and I’ve felt very supported and creatively free. It just hasn’t brought in any money. So now I’m making music as a hobby, but I’m also doing big commercial projects for money and that’s totally fine.”

McPherson says the cross-industry collaboration has been remarkable during the past year. “[The pandemic] has driven a lot more cooperation between the different disciplines in how we find a way through this and I’m hopeful that once we come out the other side of this, there will be a lot more cooperation, working together to ultimately deliver what our clients need,” he says.

Huber concurs, “I feel that, more than ever, we are all working in the same business and there’s a lot of dialogue and positive exchange, so hopefully we will come out of this stronger in the long run.” And he hopes that governments, sooner rather than later, will realise that engaging with the live entertainment industry could facilitate a swifter end to Covid restrictions. “One of the key jobs of a promoter is to plan events that keep everyone safe, but the governments are not using our expertise and instead they are relying on bureaucrats. If we could at least get a seat at the table with them, we could help come up with solutions.”

Kornett is doubtful, musing, “The EU looks at someone organising a concert in the same way as somebody who is restoring a castle – he has to bring materials and special instruments to work on an 11th century castle. So whatever they do for our industry, they will have to do for everyone else, too.” But he is quietly confident that the medical community will come up with answers to accelerate live music’s resurrection. “I’m convinced there will be further progress in medical treatment and vaccinations, and that might help us find our way back to a more normal way of life, hopefully even sooner than we expect.”

Indeed, when touring does become a reality again, there is a very real danger that every band in the world will want to be out performing at the same time. Such problems don’t phase manager Smyth, though, as she and her organisation prepare for the Rolling Stones’ 60th anniversary year in 2022.

“Right now, it seems like it would be a wonderful problem to have,” she concludes.“Oh dear, four acts want to have the Albert Hall on the same night. Well, somehow we have to make it work… matinees!”

 


Read this feature in its original format in the digital edition of IQ 97:


This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.

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The decade in live: 2012

The start of a new year and, perhaps more significantly, a new decade is fast approaching – and while many may be thinking ahead to New Year’s Eve plans and well-meaning 2020 resolutions, IQ is casting its mind back to the most pivotal industry moments of the last ten years.

As in the previous 12 months, 2012 saw the live music industry still grappling with the effects of the global economic crisis, with many countries just beginning to clamber out of recession and others heading for dreaded ‘double dips’.

This continuing economic uncertainty naturally bit into the leisure spend of discriminating ticket buyers with a variety of entertainment options – though the world did not, as predicted by some long-dead Mexicans, come to an end.

Elsewhere, the weather gods interfered with yet more festivals, while Hurricane Sandy had a devastating effect on the industry in the New York area. In the UK, meanwhile, the Olympics scored on many levels, but provided far too much competition for many.

 


2012 in numbers

The top 50 worldwide tours grossed a combined US$3 billion in 2012, according to Pollstar, down around 2% from $3.07bn in 2011.

Madonna’s MDNA tour was the clear No1, grossing $296.1 million, ahead of second-placed Bruce Springsteen, whose E Street Band earned $210.2m. Both acts played to more than 2m fans worldwide 2012.

Roger Waters’ The Wall generated $186.4m to come in at No3, and was also the highest-ranking hold-over from the 2011 chart, where he placed No5 with a gross of $103.6 million.

Reflecting the lingering impact of the financial crisis, the total tickets sold by the top 50 tours was 34.9m, which continued the decline from 35.5m the previous year (and well off the pace from 2009, when the top 50 sold 45.3 million, says Pollstar).

 


2012 in brief

January
FKP Scorpio buys a stake in Utrecht-based booking agency and artist management company Friendly Fire.

Touring festival Big Day Out calls time on its New Zealand leg after promoter Ken West admits that falling audience numbers have made the Auckland show unviable.

February

Madonna sparks controversy when she tells Newsweek  magazine fans should “work all year, scrape the money together” for a $300 ticket to her MDNA tour.

March
Private-equity firm CVC Asia Pacific puts its Australian ticketing company, Ticketek, and Sydney’s Allphones Arena up for a sale in a bid to reduce a A$2.7bn (€2.1bn) debt run-up by Nine Entertainment, which owns the assets.

Stuart Galbraith buys out AEG’s 50% stake in Kilimanjaro Live for an undisclosed sum. Both parties say they will continue to work together on events in future. (Kili later cancels the 2012 edition of Sonisphere at Knebworth, which was to have featured Kiss, Faith No More and Marilyn Manson.)

Ebay-owned secondary ticketing service, StubHub, launches operations in the UK and admits it is looking at further expansion across Europe.

Roger Waters's The Wall tour was the third most lucrative of 2012

Roger Waters’s The Wall tour was the third most lucrative of 2012 (© Brennan Schnell/Eastscene.com/Wikimedia Commons (CC BY 2.0))

April
Serbian authorities arrest the venue owner and other individuals following a fire at the Contrast nightclub in Novi Sad that leaves six people dead.

Tupac Shakur, who died 15 years previous, is the main talking point at Coachella, as a multimillion-dollar hologram of the rapper appears on stage alongside Dr Dre and Snoop Dogg.

May
Viagogo raises eyebrows by shifting its operational base from the UK to Switzerland, amid speculation it wants to resell tickets for the Olympic Games without falling foul of British law.

Investment firm Silver Lake Partners completes a transaction to acquire a 31% stake in William Morris Endeavor.

June
Former AEG Germany CEO Detlef Kornett forms a venue consultancy, Verescon, with DEAG with Peter Schwenkow.

Swedish telecom operator Tele2 pays an undisclosed sum to secure naming rights for Stockholm’s new 40,000-capacity stadium, operated by AEG.

Paul McCartney, Mike Oldfield and Dizzee Rascal performed at the London 2012 opening ceremony
Paul McCartney, Mike Oldfield and Dizzee Rascal performed at the London 2012 opening ceremony (© Matt Deegan/Flickr (CC BY 2.0))

July
Live Nation appoints former CAA exec David Zedeck to the role of executive VP and president of global talent and artist development.

Artists including Paul McCartney, Mike Oldfield, Dizzee Rascal and Emeli Sandé are each paid £1 for their performances at the Olympics opening ceremony. The show attracts 26.9m viewers in the UK alone, and billions more worldwide.

August
Three members of Russian punk band Pussy Riot are jailed for two years each, after staging an anti-Vladimir Putin protest in a Moscow cathedral.

September
AEG drops its claim against Lloyd’s of London on a multimillion-dollar insurance policy, following the death of Michael Jackson.

C3 Presents’ Lollapalooza debuted in Brazil in AprilC3 Presents’ Lollapalooza debuted in Brazil in April (© Henrique Oli/Wikimedia Commons (CC BY-SA 3.0))

October
Glastonbury Festival takes just 100 minutes to sell out all 135,000 tickets for next summer’s event, despite not naming a single act on the 2013 bill.

C3 Presents extends an arrangement with Globo Organization’s GEO for more events in Brazil, following a successful Lollapalooza.

November
AEG is awarded the contract to take over shows at London’s prestigious Hyde Park, ending Live Nation’s decade-long relationship with the 80,000-capacity space.

Frank Barsalona, founder of Premier Talent, dies aged 74. Premier was the first agency to work exclusively with rock artists, with clients including the Yardbirds, Bruce Springsteen, Tom Petty, U2 and Van Halen.

December
The Wall Street Journal reports that a number of bidders are in contention to acquire AEG, despite a reported $10bn asking price.

Irving Azoff unexpectedly resigns as chairman of Live Nation and CEO of its Front Line Management Group, to concentrate on his own artist management company.

 


Whitney Houston

Who we lost

Notable industry deaths in 2012 included South by Southwest creative director Brent Grulke, Lasse Ollsen of Swedish promoter Viva Art Music, Jon Lord of Deep Purple, Armin Rahn, founder of Munich-based Armin Rahn Agency and Management, Radiohead drum tech Scott Johnson, Perth Arena general manager David Humphreys, R&B legend Etta James, pop powerhouse Whitney Houston, the Bee Gees’ Robin Gibb, disco diva Donna Summer, the Monkees’ Davy Jones and legendary agents Armin Rahm and Frank Barsalona.

 


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ILMC 31: The Open Forum: With or Without EU

Live Nation’s president of international touring, Phil Bowdery, returned as host for this year’s standing room-only Opening Forum, which saw six heavyweights gather to discuss the last 12 months in the business, hot-button industry issues and the looming threat of Brexit.

After running through some of the headline figures from 2018 – the largest tour was Ed Sheeran’s ÷, which grossed US$432.4m from 93 concerts in 53 cities, with Taylor Swift’s Reputation in second – Bowdery asked what the trend towards rising ticket prices, coupled in many cases with falling attendances, outlined in IQ’s European Festival Report 2018 means for the industry’s future growth.

Deutsche Entertainment AG (DEAG) CMO Detlef Kornett said that while his company experienced healthy growth last year – and that sales of top-end tickets continue to grow – less wealthy fans are increasingly finding themselves priced out of shows. “Twenty per cent of the population in Germany now can’t afford to go to a show,” he explained. “The P1s keep increasing, but the lower end is a concern.”

Coda agent Alex Hardee said while he didn’t have any statistics to hand (“not that that’s stopped me before!”) he feels the overall market is “flat”. “You’re never going to have a problem selling [new, hot acts like] Billie Eilish, but it’s more difficult with bands on their second, third albums… Record labels are the strongest they’ve been since the ’80s, but the live industry feels like it’s plateauing slightly.”

Tim Leiweke, the ex-AEG CEO who now leads venues company Oak View Group (OVG) – which used the conference to launch its new London-based OVG International division – cautioned that the business “need[s] to address whether we’re pricing people out of concerts”, especially if the global economy takes a downturn.

Solo Agency’s John Giddings countered: “Every time we put a show on sale, it seems to sell out. People want to go out and have a good time.” He revealed that his Isle of Wight Festival 2019 had sold more than 30,000 tickets before it had announced a single artist.

Fortnite is a $60bn business, and it doesn’t charge to play. … I think there’s a lot to be learnt from that”

However, he added: “We push ticket prices all the time – the artists want more money, venues want that peripheral income – so there must be a level it reaches when we say it’s enough.”

Marsha Vlasic of Artist Group International (AGI) said AGI had a great year, with the likes of Billy Joel, Def Leppard and Metallica continuing to sell out shows. She said her biggest concern for the future is “who are the next headliners, and how do we get the next generation of acts to that level?”.

Asked about the impending merger of AEG Facilities and SMG, and the new company, ASM Global’s, potential to rival OVG, Leiweke said he doesn’t think “two [companies] coming together is ever good”, predicting that “they’re going to get challenged in the UK, they’re going to get challenged in Germany and elsewhere in Europe…” He also revealed that OVG’s lawyers are “looking at it” on anti-competition concerns.

Returning to ticket pricing, and the value of the market, artist manager Bill Silva argued that the live music industry – predicted to top $30bn in 2022, according to the latest PwC data – is actually small fry compared to the videogames business, where many IPs rely on a free-to-access model.

Fortnite is a $60 billion business, and it doesn’t charge to play,” said Silva. “That’s one game that’s bigger than our entire industry by a multiple [of two]. I think there’s a lot to be learnt from what’s going on there – people are spending their time on that activity, rather than music and concerts – there’s a model around engagement and experience that encourages them to spend.”

“It’s the old drug dealer model,” he joked. “‘First one’s on me,’ right? Not that I was a drug dealer…”

Kornett argued the success of games like Fornite could help open up to the live business to a wider audience, using the example of DJ Marshmello’s recent performance in Fortnite, which was seen by 10m people.

“We need to remember we work in a system where other people rely on us”

Following on from ILMC head Greg Parmley’s welcome address, when he paid tribute to the ILMC members who had died in 2018, Silva urged the industry to come together and look after those in need.

“When we watch our artists taking their own lives – Chris Cornell, Chester [Bennington] and now this week Keith Flint – as well as promoters [referencing Croatia’s Jordan Rodić, who committed suicide in January], we need to remember we work in a system where other people rely on us as well.

“I guarantee any of the people around people who have taken their lives would say they did everything they could, or that they had no idea… We all have a lot of fun doing what we do, but I like to end most interaction on a high note and let people know I appreciate and respect them.”

Inevitably, with the UK set to leave the EU (with or without a deal) at the end of this month, talk then turned to Brexit. Several people in the room said they were hedging dollars to prepare for any post-Brexit plunge in the pound. “We’re in a gambling business, and that’s just another gamble we’re taking,” said Giddings.

“We’ve been following everything on Brexit, all the scenarios,” added Hardee, “but what can we do?”

Asked the view from the continent, Kornett said: “Once in a while, it’s good to take the other side. The UK industry accounts for almost 25% of Europe’s, so if it gets harder to get to the UK from Europe our business gets harder. So there should be a vested interest to avoid that.”

 


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DEAG hoping for “reasonable solution” to post-Brexit touring

Berlin-based promoter Deutsche Entertainment AG (DEAG) is among the German businesses bracing for a ‘hard’ Brexit next March, with executive board member Detlef Kornett warning of knock-on effects on European touring if Britain leaves the EU without a deal.

IQ revealed in May that many concert tours would grind to a halt should the UK and European union fail to reach an agreement on trucking, with Richard Burnett, chief executive of the Road Haulage Association, warning there would be “17-mile tailbacks” at Calais “within 24 hours” of Britain crashing out of the trade bloc.

Speaking to the Berliner Morgenpost, Kornett says the concert giant – who does around half its business in Britain, through subsidiaries Kilimanjaro Live and Flying Music Group – is optimistic there’ll be still be strong demand for live entertainment in the event of a post-Brexit recession.

“In times of crisis people may forego a new washing machine, [for example], but there is usually still money for the small things that make you happy,” Kornett comments.

“Brexit without a concrete result from the negotiations would be bad”

However, he cautions that, with just over seven months to go until Brexit Day on 29 March 2019, the industry is still in the dark about how easy it will be for tours to travel from Britain to mainland Europe and vice versa.

“A Brexit without a concrete result from negotiations [between the UK and EU] would be bad,” he says, echoing Burnett. “But I hope that there will be a reasonable solution to the major issues.”

Other German business leaders have urged both parties to find a solution, with Christian Amsinck of the Business Associations of Berlin and Brandenburg (UVB) warning the “clock is ticking”.

Jan Eder, director of the German Chamber of Commerce and Industry (IHK), tells the paper it is “highly regrettable” that little progress in being made in Brexit negotiations are stalling. “There are fewer than 250 days left to the end of March 2019 and we are still facing a completely open negotiation result. That leaves many questions for [German] companies that are economically linked to the UK.”

 


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