Purchasing power ‘top challenge’ in emerging markets

Purchasing power, ticket prices and the cost of infrastructure are among the top challenges in emerging touring markets, according to executives.

Connie Shao (AEG Presents), Tom Matthews (Live Nation APAC), Naman Pugalia (Book My Show) and Melanie Eselevsky (Move Concerts Argentina) united at last month’s ILMC Futures Forum to discuss the challenges and opportunities presented by newer touring territories.

While India is on the verge of a breakthrough as a must-play destination for global artists, Pugalia said that the market’s purchasing power is “still not where it needs to be”.

“However, there are forward-looking artists who realise that India is the next big market they need to cultivate,” he continued. “And they’ve agreed to lower prices and be flexible with the number of tickets allowed per transaction etc. Those artists who have bet on the market are now beginning to reap the rewards.”

Pugalia referenced recent high-profile tours by Coldplay and Ed Sheeran – acts that have frequently visited the territory over the last decade and continually invested in the market.

“A million dollars in Singapore and a million dollars in Jakarta is very different, and we can’t achieve both without causing an issue”

Matthews, a former UTA agent who was recently appointed director, talent & touring at Live Nation APAC, pointed out that many artist teams approach the continent of Asia as a single touring market. He reminded delegates that purchasing power varies widely from country to country.

“The big problem I’ve seen recently – on the agent and promoter side – is artists wanting a million dollars for a show,” he said. “A million dollars in Singapore and a million dollars in Jakarta is very different, and we can’t achieve both without causing an issue. It means we’re going to have to pump the ticket price, but the average income across these countries is not the same.

“With a European or North American tour, an agent could increase the price by $40 or €40 across the board. You can’t do that in Asia. Each market is too different, so it’s very price sensitive. So you need to weigh it up. Our goal is to make the artist as much money as possible but selling out the show is the best thing for their career. There are other ways to make money that don’t affect the artist sales so we have to be smart as promoters and educate the artist.”

Pugalia agreed that raising ticket prices isn’t the best way to achieve a higher artist guarantee – especially in a country with such a huge disparity between socioeconomic classes.

“Our country is very compartmentalised,” he said. “There is a segment of society that will pay top dollar for shows in India and those VIP prices compare to anywhere else in the world and sometimes are even more expensive. But as far as GA is concerned… that still needs to pull its weight.”

“This may come as a surprise but doing a show in India is more expensive than doing a show in Europe or North America”

Eselevsky said that Move Concerts Agentina has been forced to increase ticket prices to compete with an increasingly crowded market, though fans aren’t entirely happy about it.

“Last year we went on sale with Eric Clapton and we were the first promoter to go on sale with ticket prices over the 200,000 pesos mark. Fans were like, ‘Oh yeah, but it’s more expensive than in the UK’. Then the other promoters started to scale up their prices as well. Now it’s standard for a GA stadium ticket to cost $150, which is a lot for any market.”

The cost of infrastructure is also an issue when it comes to staging shows in South America, according to Eselevsky. “We don’t have enough lighting equipment, sound equipment, stages or roofs and bringing it from abroad is way too expensive,” she added.

Investing in infrastructure is a top priority for Book My Show. “Every time we’re doing a festival or a show, we’re essentially building a city that we need to dismantle right after and it’s very expensive,” said Pugalia. “This may come as a surprise but doing a show in India is more expensive than in Europe or North America because of the paucity of equipment and venues. We’ve got to build a market here.”

Though these newer touring territories have a way to go with purchasing power and infrastructure, the panel was confident that international artists will reap the long-term benefits of visiting the markets.

“A lot of our artists are now making Asia a primary market and planning the rest of their world tour around it”

“Yes, it’s a lower guarantee now but if we look at a 2-3-4 year plan and we start generating the ticket prices at this number, this is how much you’re going to get on your VIP lift on your first tour, and on your second tour, and on your third tour,” said Matthews. “We don’t want artists to come in as a one-stop. We want them to come back year on year. A lot of our artists are now making Asia a primary market and planning the rest of their world tour around it. It’s a beautiful market with incredible infrastructure and if it’s done correctly, you can reap huge financial rewards.”

Pugalia was similarly optimistic about the potential of higher touring revenues in India, especially now that the concert economy has entered the political lexicon.

“There’s traditional sponsorship and we work with brands – both in India and globally – to try and make sense of these P&Ls,” he said. “But governments are increasingly stepping in. They have realised – for better and worse – that tickets are political currency, as well as social and cultural currency. As a result, state governments in India are competing to get business, which we’ve never seen in the past. That’s supremely helpful. I believe this is a good thing for the overall market in terms of pricing.

He continued: “With no venues, abysmal infrastructure and scant interest, we’ve already made our presence felt over the last few quarters. With all of these things improving and artist interest increasing, we’re just getting started. This is day zero for us.”

Eselevsky, meanwhile, said Argentina stands to benefit from newfound economic stability. “We’ve had the same exchange rate for over a year, which is a long time,” she said. “I foresee much more investment in our market because the economy is not as unclear as it was not so long ago.”

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