Live music industry ‘reached new heights’ in 2023
Concert attendance was up 20% for Live Nation to more than 145 million last year, with revenue rising 23% to US$22.7 billion (€20.95bn).
The company posted all-time highs for attendance, ticket sales and sponsorship activity in its financial results for full-year and Q4 2023.
Operating income was up 46% to $1.07bn and AOI rose 32% to $1.86bn, doubling since the last pre-pandemic year of 2019, while Live Nation remains the largest supporter of artists, with investment in acts leaping by more than 40% to over $13bn, while there were 50% more international acts in top 50 tours.
“The live music industry reached new heights in 2023, and demand for live music continues to build,” says LN president and CEO Michael Rapino. “Our digital world empowers artists to develop global followings, while inspiring fans to crave in-person experiences more than ever. At the same time, the industry is delivering a wider variety of concerts which draws in new audiences, and developing more venues to support a larger show pipeline.
“Against this backdrop, we expect all our businesses to continue growing and adding value to artists and fans as we deliver double-digit operating income and AOI growth again this year, with our profitability compounding by double-digits over the next several years.”
“Shows are flying out the door from top to bottom”
The company’s share price was up 2.5% to $93.49 at press time. Speaking to investors last night (22 February) on the firm’s earnings call, Rapino reiterated that another year of growth is on the cards.
“This is going to be a great year,” he said. “We’re pacing ahead on our arena and our amphitheatre business, which is the higher-margin business. So, we’re going to have a fabulous year. We’re going to be able to monetise that around the world.
“We just went on sale within the last week on Usher, Justin Timberlake, Jennifer Lopez, just announced Jelly Roll this morning. These shows are flying out the door from top to bottom.”
LN president/CFO Joe Berchtold added: “We’re seeing most of these on-sales still selling front-to-back, meaning most expensive tickets to least. So, we’re seeing strong demand at all price points… All fronts are showing strong consumer demand globally.”
Rapino pointed out that ’25 is already gearing up to be a “monster stadium year”, as compared to the more arena and theatre-focused ’24.
“We expect this to continue to be a double-digit growth business”
“ looks like it’s going to be a monster stadium year again as that pipe kind of reloads itself,” he said. “We made decisions this year: Usher could have been in stadiums. We wanted to get them in arenas this year and put a great show together. Justin Timberlake, Bad Bunny in arenas versus stadiums. So, you make those trade-offs in different years.
“But the good news for us is we’re going to have a fabulous arena/amphitheatre year, festival year around the world. That’s going to drive our overall AOI margin cash flow. Probably bounce back with some bigger stadium activity in ’25 and then the cycle will continue.”
On sponsorship revenue, which was up 13% to over $1bn, Rapino added: “Our demand in terms of clients that want to be part of this live experience surge right now is stronger than ever. Most CMOs want to sit down with us and talk about how can they have some part of this live explosion on a global basis.
“As you’ve seen with Mastercard and updated deal with Verizon and others to be announced, our pipe is up year-over-year. We expect this to continue to be a double-digit growth business, as we’ve seen in the past. We’ve seen nothing slowing down there.”
Ticketmaster GTV was up double-digits to $13bn on fee-bearing tickets for events playing off in 2024 Asked about platinum ticketing, Rapino outlined the differences between the more established US market and other territories.
“They look at the grosses and say, ‘Wow, we’re leaving too much on the table for the scalpers. Let’s price this better'”
“Outside of the US, we’re in the first inning,” he said. “We’re just rolling this out around the world, so that’s the great growth opportunity obviously. We have it in Europe, but still in infancy stages. We’re going to expand it down to South America, Australia, etc. So, first inning on the international business, well received when it gets there.
“Promoters are anxious for it. Artists are anxious for it, because when they sell an arena in Baltimore versus Milan, right now, they look at the grosses and say, ‘Wow, we’re leaving too much on the table for the scalpers. Let’s price this better.’ So that’s our best sales pitch.
“On the US business, we’re probably about in the fifth inning… We still think that’s a multi-year opportunity to continue to grow our top line/bottom line.”
The pair also offered a brief update on the antitrust investigation into Live Nation and Ticketmaster by the DoJ after Bloomberg reported the US Justice Department had sent out a new raft of information requests in its probe.
“I don’t think we’ve got a lot to report,” said Berchtold. “We continue to answer any questions they have. They control the timing, and we’ll watch it play out, but we don’t have any specific updates.”
“We’re 100% cooperative,” added Rapino.
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CTS Eventim ‘significantly’ exceeds 2023 forecast
CTS Eventim “significantly exceeded” its forecast for 2023 thanks to a “very strong” Q4, according to the company’s latest financial results.
The pan-European giant enjoyed a record year, attaining consolidated revenue of €2.359 billion for the 12-month period – a 22.5% increase on the previous year’s €1.926bn. CTS had previously projected group revenue in excess of €2bn for 2023 as a whole last October.
In the preliminary figures, the group also reported normalised EBITDA of €501.4 million, up 31.9% from €380.1m in the previous year. CTS’ full annual report for 2023 will be published on 26 March.
The growth was powered by the German-headquartered firm’s ticketing and live entertainment segments. Ticketing revenue rose 32.5% to €717m (2022: €541m), with normalised EBITDA leaping 46.6% to €382.4m.
For the live entertainment strand, revenue jumped 18.9% year-on-year to €1.677bn (2022: €1.410bn), with normalised EBITDA almost flat at €119.1m, compared to €119.2m in 2022.
The group figures include income of €37.4m to which CTS group companies are directly entitled, resulting from compensation paid by the German government to the joint venture autoTicket GmbH, Berlin.
“The year-on-year growth rates shown here reflect the success of the operating business”
“As the prior-year figures contained a similar volume of income that had been received under pandemic-related economic aid programmes, the year-on-year growth rates shown here reflect the success of the operating business,” adds a company statement.
According to Pollstar’s 2023 global rankings, the Eventim Group is the world’s second-biggest promoter. The firm’s portfolio includes festivals such as Rock am Ring, Rock im Park, Hurricane, Southside,and Lucca Summer.
It also operates venues, such as the Lanxess Arena in Cologne, the K.B. Hallen in Copenhagen, the Waldbühne in Berlin and the Eventim Apollo in London.
Visions reports that more than 90,000 tickets have already been sold for Germany’s Rock am Ring and Rock im Park, which take place from 7-9 June at Nürburgring race track and Zeppelin Field, respectively.
Operated by CTS’ Dreamhaus subsidiary, the twin festivals will be headlined by Die Ärzte, Måneskin and Green Day. The events’ new premium camping offers are said to be almost sold out, while tickets for the Backstage Camp, Seaside Backstage Camp and Caravan Camping are already sold out.
“The demand for tickets is strong and the fans’ anticipation is huge,” says Dreamhaus CEO Matt Schwarz.
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CTS Eventim revenues hit €1.75bn for year-to-date
Tours by superstars including Taylor Swift, Paul McCartney and Coldplay helped drive CTS Eventim to strong growth in the first nine months of 2023.
The Munich-headquartered pan-European giant’s latest financial results showed revenues of €729.3 million for Q3 2023 – up 5% year-on-year – and €1.75 billion for the year to date, which marks 23% increase on the same period last year.
The group’s normalised EBITDA advanced to €172.5m for the quarter (up 29%) and €343.3m for January to September 2023 (up 34%), with “prudent cost management and significant agility” also contributing to the “excellent results”.
“CTS Eventim offers extremely attractive content in almost all live entertainment segments and has unparalleled reach among fans of music, sport, edutainment and other live formats in Europe and beyond,” says CTS CEO Klaus-Peter Schulenberg. ‘Thanks to the global integration of our technologies and marketing platforms, we’re ideally positioned to monetise both our content and reach while offering fans a unique live experience that starts with their ticket purchase.”
Ticketing revenue for the nine-month period leapt 36% year-on-year to €459.3m, with the number of online tickets sold rising by 11.6 million compared with the previous year. The figures do not yet include the revenue of France Billet, which is due to be fully consolidated at the start of 2024. CTS increased its stake in the French market leader earlier this year.
“France Billet is a strong player and once it has been fully consolidated, we expect that it will provide another boost to our business”
“As part of our strategy of international expansion, we have already integrated the French market leader, France Billet, into our operations,” adds Schulenberg. “France Billet is a strong player and once it has been fully consolidated, we expect that it will provide another boost to our business. And once again, Christmas trade will also have a positive impact on our net profit for the year.”
Revenue for the live entertainment segment also jumped, increasing by 19% to €1.315bn in the first three quarters of 2023. CTS considers that result a “particular success” as the figures for the equivalent period of 2022 were boosted by government subsidies “running into the mid-double-digit millions”.
The executive board still expects the group’s overall revenue for 2023 to be “significantly higher” than €2bn, with normalised EBITDA at well above €400m.
“CTS Eventim has an excellent line-up of concerts and events for the fourth quarter, which will again generate a healthy level of revenue, especially in the context of Christmas trade,” concludes the firm.
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SM Entertainment earnings soar in ‘highest-ever’ quarter
K-pop giant SM Entertainment has reported its highest-ever quarterly earnings for Q3, bolstered by concerts and record sales.
The Seoul-based company, which is home to acts some of the world’s biggest K-pop acts, reported KRW 48 billion (€34m) in operating profit – a 77% surge year-on-year (YOY).
Revenue followed suit with a 40% YoY increase, soaring to KRW 188.7 bn (€133.9m), while net profit reached KRW 37.1 bn (€26.3m), jumping 68% YoY.
SM says increases across the board can be attributed to the rise in music and recording sales by NCT DREAM, aespa and RIIZE, as well as the increase in artist activities such as offline concerts.
The entertainment agency is also home to acts including Girls’ Generation, Super Junior, EXO, NCT and Red Velvet.
The Seoul-based company reported KRW 48 billion (€34m) in operating profit – a 77% surge year-on-year
SM has also revealed a consolidated operating profit of KRW 50.5 bn (€35.8m) for Q3, a staggering 70% YoY increase, as well as a revenue surge of KRW 266.3 bn (€188.9m), a 12% YoY increase. Both figures recorded the highest quarterly performance.
Meanwhile, net profit increased by 189% to KRW 84.2 bn (€59.7m), compared to KRW 29.2 bn (€20.7m) during the same period last year. Operating margin for Q3 recorded 19%, a YoY increase of 6.5%.
SM’s subsidiaries include live entertainment company Dream Maker, advertising, production, travel and talent company SM Culture & Contents, entertainment management agency Keyeast and music publishing subsidiary KMR.
Looking towards the future, SM CEO Cheol Hyuk JANG said: “We have a packed line-up of activities through the end of the year, from aespa, Red Velvet and Taeyeon to TVXQ’s 20th anniversary album and concerts. We are also planning on showcasing a strong lineup of artists and content in the coming year as well. Through our music publishing subsidiary KMR, we’ll actively seek out global songwriters, focus on securing a stable supply of high-quality songs and eventually secure a new stream of revenues for SM through royalties made from selling music to external labels and agencies.”
Earlier this year, internet company Kakao Corp became the second-largest shareholder in SM Entertainment.
SM says increases across the board can be attributed to, in part, to the increase in artist activities such as offline concerts
SM Entertainment says the capital raised through the deal will fund its new business strategy dubbed “SM 3.0” – establishing multiple production centres and labels as well as a music publishing-specialised subsidiary, and investing in the metaverse.
At the end of last year, the Seoul-based operation announced plans to launch a headquarters in Singapore, in order to strengthen its presence in Southeast Asia.
Months later, it was announced that SM and Kakao would launch an integrated division in North America.
The division will combine SM’s global intellectual property and production capabilities with Kakao’s music distribution network and multi-label system, “with the goal of firmly establishing itself as a global K-pop key player”.
The aim is to promote artists from both companies, including Kakao-owned Starship Entertainment’s girl group IVE, as well as SM’s girl group Aespa and boy band NCT.
Sphere expects two more residencies for H1 ’24
James Dolan has revealed the Sphere in Las Vegas expects to host two more residencies in the first half of 2024 in the wake of U2’s acclaimed run.
The Sphere Entertainment executive chair and CEO addressed investors this week during the company’s first earnings call since the opening of the futuristic $2.3 billion venue on 29 September.
According to the filing for fiscal Q1 2024 – covering the three-month period ending 30 September 2023 – the first two U2:UV Achtung Baby Live At Sphere dates earned a total of $4.1m. The band’s residency was recently extended to 36 shows, running until 18 February 2024, and Dolan reported that discussions were ongoing with other artists regarding runs of varying lengths.
“Every U2 show so far has been sold out,” said Dolan. “The incredible response to U2’s run at Sphere has only increased interest from the artist community to play the venue, and we’re having conversations with artists across a wide variety of genres. We expect to host two additional residencies in the second half of this fiscal year and look forward to sharing more detail.”
The Madison Square Garden spin-off posted revenue of $118 million for the quarter, as well as an operating loss of $69m and an adjusted operating loss of $57.9m, but Dolan said its long-term prospects were very positive.
“While it will take some time for Sphere to realise its full potential, we’re off to a great start,” he said. “We are already seeing Sphere’s ability to inspire all and wonder, and the venue has become a landmark destination in Las Vegas, but we’ve only just begun to scratch the surface and are excited by how much further we can take this new entertainment media in the future, including to new markets.
“While you should not expect the venue to reach its full economic potential right away, our momentum is building with artists, promoters, sponsors and guests from across the globe, and we remain confident in the long-term outlook for Sphere.”
Dolan outlined the plan to make the Sphere a 365-day-a-year venue, hosting “multiple events per day on many days”. He added that the “Sphere Experience” concept, which debuted on 6 October with the Darren Aronofsky-directed immersive production Postcard from Earth, was a “core component” of that strategy.
“Through the end of October, we have grossed over $1 million in average daily ticket sales each day”
“We’ve been very pleased with the reception of the Sphere Experience from our guests as well as the critical claim Postcard from Earth has received for its captivating visuals and use of the venue’s immersive technologies to engage the senses and enchant our audiences,” he said.
“This has translated into strong ticket sales to date. Through the end of October, we have grossed over $1 million in average daily ticket sales each day. As we learn more about our audiences and the venue, we’re already planning ways to continue enhancing the signature content category.
“This is the first of what will be different iterations of the Sphere experience. That includes populating the atrium with additional technology exhibits and at time introducing new cinematic content as we keep Sphere at the forefront of innovative experiences.”
Both the U2 residency and Sphere Experience will take short breaks while Formula 1 begin’s a planned multi-day takeover of Sphere in the run-up to the inaugural Las Vegas Grand Prix on 19 November.
Earlier this week, Madison Square Garden Entertainment (MSGE) reported revenue of $142.2m in its fiscal 2024 first quarter, down 3% ($4.2m) year over year. The financial results were MSGE’s first as a standalone live entertainment company after it spun off from MSG’s Sphere and MSG Networks businesses in April.
MSGE – which owns venues including New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, Beacon Theatre and The Chicago Theatre – said the decrease “primarily reflected a lower number of concerts”, compared to the prior year quarter.
Meanwhile, Sphere Entertainment has acknowledged the departure of CFO Gautam Ranji, who stepped down on 3 November. An SEC filing said his exit was “not a result of any disagreement with the company’s independent auditors or any member of management on any matter of accounting principles or practices, financial statement disclosure or internal controls”.
“We thank him for all of his contributions during his time at the company and wish him well in his future endeavours,” added Dolan.
MSG Entertainment revenue dips due to less concerts
Madison Square Garden Entertainment (MSGE) has reported revenue of US$142.2 million in its fiscal 2024 first quarter, down 3% ($4.2m) year over year.
The financial results are MSGE’s first as a standalone live entertainment company after it spun off from MSG’s Sphere and MSG Networks businesses in April.
MSGE – which owns venues including New York’s Madison Square Garden, The Theater at Madison Square Garden, Radio City Music Hall, Beacon Theatre and The Chicago Theatre – said event-related revenues narrowed by $8.3m compared to the same period last year.
“This decrease primarily reflected a lower number of concerts held at the company’s venues as compared to the prior year quarter, partially offset by higher per-concert revenues in the current year period,” MSG Entertainment said.
The prior-year quarter benefited from some concerts that were rescheduled due to the Covid-19 pandemic, plus, Madison Square Garden (cap. 21,000) enjoyed a 15-show run from Harry Styles from 20 August to 21 September 2022 that grossed $63.1m from 277,000 ticket sales, according to Billboard Boxscore.
Also revealed in the fiscal Q1 report, MSG Entertainment booked an operating loss of $33.4m (an increase of $22.1m as compared to the prior year quarter) and an adjusted operating loss of $0.7m, as compared to adjusted operating income of $11.5m in the prior year quarter.
The prior-year quarter benefited from some rescheduled concerts, plus, MSG enjoyed a 15-show run from Harry Styles
The company attributed the increase in its losses to restructuring charges, higher selling, general and administrative expenses, and lower revenues.
However, MSGE’s chief financial officer Dave Byrnes expressed optimism about the future, stating that the company’s venues are poised to surpass their concert goals for the year.
The company will achieve a low double-digit percentage increase in event bookings this fiscal year, thanks to a new generation of artists who have graduated from smaller buildings in its portfolio to its flagship venue, Madison Square Garden.
“This fiscal year, there are a number of acts, including Olivia Rodrigo, Tyler Childers and Niall Horan, who previously performed at either The Beacon [Theatre] or Radio City [Music Hall] that will soon headline the Garden for the first time in their careers,” said Byrnes. What’s more, he added, “a number of these first-time acts” are playing multiple nights and experiencing “strong ticket demand for their entire run.”
“We’re currently on sale with more concerts at our venues than we were at this time last year for the second half of fiscal ’23,” said Byrnes, “and of those on-sales, a majority of those tickets are already sold, and sell-through on those shows is currently up [a] high single-digit percentage as compared to the second half of fiscal ’23.”
Looking at the full fiscal year, MSGE is estimating revenues of $900m to $930m, operating income of $85m to $95m and adjusted operating income of $160m to $170m.
Live Nation reports ‘strongest quarter ever’
Live Nation says it has delivered its “strongest quarter ever” and is on pace for a record year after reporting revenue of US$8.2 billion (€7.7m) in Q3 2023.
The total represented a 32% increase on the previous quarter’s $5.6bn, while revenue for the year-to-date was up 36% to $16.9bn. The company’s share price was up slightly to $83.42 at press time.
In addition, operating income rose 22% in Q3 and 35% for the first nine months of 2023 to $619 million and $1.1 bn respectively. Plus AOI jumped 35% to $836m in Q3 and 33% to $1.7bn for the year so far.
“We delivered our strongest quarter ever and are on pace for a record 2023, driven in good part by the acceleration of structural growth in the live entertainment industry,” says Live Nation president and CEO Michael Rapino. “While we have benefitted from tailwinds for many years, it has accelerated due to the globalisation of our business along with a fundamental shift in consumer spending habits toward experiences.
“With the majority of opportunity still untapped from Milan to Bogotá to Tokyo and beyond, we expect the industry will continue growing in 2024 and for years to come.”
“The consumer supply-demand seems to be consistent across the globe, small to big”
LN has sold 140 million tickets for its shows in 2023, a 17% year-over-year rise, already bettering 2022’s full year total of 121m. Its Ticketmaster division, meanwhile, has sold 257m fee-bearing tickets for the year-to-date, up 22% on the same period in 2022. Revenue soared 57% to $833m.
Speaking to investors on the company’s earnings call, Rapino said there was no indication of fan interest waning for 2024.
“We have not seen anything taper off in any sense,” he said. “The consumer supply-demand seems to be consistent across the globe, small to big.”
Though acknowledging Beyoncé’s Live Nation-promoted 2023 Renaissance World Tour as “wildly successful”, Rapino said he has no concerns about other tours struggling to replicate its success next year.
“When we look at any artist across Ticketmaster-Live Nation, no artist is going to account for more than 1% of the tickets, so no one tour will ever hurt us year-over-year,” he says. “It’s about our macro portfolio of artists and tours.”
“We’re going to have big, record-breaking tours on the road next year”
He continued: “We think next year – crazy to say, but… we’re looking at double-digit growth over this year. We’re going to have big, record-breaking tours on the road next year, as Bad Bunny just went up again and more to be announced. So we are very confident… that we will overcome this year’s numbers.”
Live Nation CFO Joe Berchtold said the firm was “absolutely focused on continuing to add venues” to its portfolio, and went on to discuss the DoJ’s investigation of the company. Earlier this week, the Wall Street Journal reported that the justice department’s probe was focusing on whether the LN uses anticompetitive agreements with venues and artists.
“Not surprisingly, it’s our impression that the DOJ is taking at least the first level look at almost everything that our competitors complain about and from there they look further at some issues and not others,” he said. “If they tell us they have a problem with something, we talked to them about it.
“But, let me emphasise this: as far as we can tell, nobody thinks that the fundamentals that drive our promotions business are unlawful. We pay top dollar to artists and provide them with top-notch tour support and those are good things.”
Berchtold said his understanding was that the DoJ’s investigation was “in its mid-stages at this point”.
“The article also seems to reinforce that the investigation’s looking at specific business practices versus our overall business model”
“I think the article also seems to reinforce that the investigation’s looking at specific business practices versus our overall business model,” he added.
Rapino, meanwhile, said he was “thrilled” by Live Nation’s new multi-year partnership with Mastercard, which was announced earlier this week. The deal gives cardholders exclusive access to concert presale tickets, premium seats and VIP experiences through priceless.com from January 2024. LN’s sponsorship revenue was up 7% to $367m for Q3 overall.
“We’ve been working over the last couple of years to have a great diversity across our partners on the payment side,” noted Rapino. “Thankfully, we didn’t take any of the easy crypto money at the time. We worked hard to make sure we had a stable of great partners.
“Citibank, PayPal and now Mastercard, for international, rounds out our global portfolio in that category. So we’re very, very happy to have them onboard [as a] big part of our business and continue to show strong growth in our sponsorship side, and sponsors lined-up to be part of this live boom.”
Economist Will Page unwraps the touring bounceback
Economist Will Page says the live sector is “winning attention in the experience economy” after revealing that UK music fans spent £2.1 billion (€2.4bn) on gig tickets last year.
The author and former chief economist for Spotify and PRS for Music presented his latest groundbreaking research last month.
Writing in Music Business Worldwide, he reported that the volume of live music events in the UK was down 26% from 2019 to 2022, but the amount spent on tickets was up 22% in the same period – surpassing £2bn for the first time – while spend on recorded music also exceeded £2bn.
“What we’re seeing is akin to a productivity gain: getting more (box office spend) from less (concerts),” said Page. “That could be driven by supply (higher ticket prices) or demand (preferences for bigger events). Inflation will have a role to play, too.”
Page also found that music in the UK stadiums and festivals now make up half of all box office spend, compared to 40% in 2019 and just 23% in 2012.
“While 2022 still provided multiple challenges, as does 2023, the appetite for that unique, communal gig going experience is clear”
In response to the findings, Jon Collins, CEO of trade body LIVE, tells IQ it is “fantastic to see the enormous demand for live music across the UK”.
“While 2022 still provided multiple challenges, as does 2023, the appetite for that unique, communal gig going experience is clear,” says Collins. “Working together and with government, we have an opportunity to grow further and faster. As part of that, it is critical we support our grassroots venues, festivals and, of course, the artists themselves. A vibrant and diverse range of venues located across our towns and cities will give artists the chance to establish a career and fans the opportunity to develop that gig-going habit.”
Here, IQ sits down for a Q&A with Page to delve deeper into his analysis – and gets his future forecast…
How did your findings compare with your expectations going in?
“It felt like there was a lot of ‘stoked up’ demand from the consumers who had suffered during the pandemic, as well as ‘stoke up’ supply from bands who couldn’t tour during lockdown. I was confident UK box office spend in 2022 was going to surpass 2019, but didn’t honestly expect the figure to begin with a ‘two’ – that is £2.1 billion! At the same time, spending on recorded music passed the £2bn threshold. So I expected a bounce back, but the scale of the bounce was unexpected.”
In your opinion, how sustainable is the level of business reported?
“There’s headwinds (namely inflation and interest rates) and there’s tailwinds (innovation in production and ticketing) to consider but I’m confident the sector is sustainable. Live music is constantly ‘upping its game’ in the experience economy. I was at The Weeknd at London Stadium and you could see the diverse 80,000 strong audience opted for this experience over so many other options – be it Netflix or going abroad. Live is winning attention in the experience economy.”
“UK gig-goers spent more on stadiums and festivals in 2022 than they did on all of live music in 2012”
Given that stadiums and festivals have more than doubled their box office shares, where does that leave the rest of the sector?
“To add some more colour to this observation, UK gig-goers spent more on stadiums and festivals in 2022 than they did on all of live music in 2012. But, we have to be careful with knee jerk reactions here – especially when people argue the explosion in stadium shows is at the expense of the grassroots. The majority of those fans who went to see Coldplay at stadiums, I don’t think they would be interested in going to Camden on a wet winter night to support the grassroots. But we’re also talking about a bigger overall pie than there was a few years ago.
“If you accept this point, then what we’re witnessing is something I explore in my book Pivot Eight Principles for Transforming your Business, which is that customers are interested in the thrill of a bargain (Spotify at £9.99 a month) the thrill of a luxury (Coldplay at £119 a ticket) but not what’s left in between. I think you can see this everywhere, be it how we shop (those who shop at Aldi and Waitrose) or buy flights (fly with EasyJet and Virgin Atlantic).
“But to reiterate the demand-side point, I don’t think this explosion in demand for stadium shows is stealing business away from the grassroots. Sure, there’s a dependency issue to explore on the supply-side on the need for grassroots to generate headliners of tomorrow. Protecting those stages is as important as ever and beyond the scope of the research here. There’s certainly some ‘knocking of heads’ to be done between promoters, streaming services and labels.”
“We really are in uncharted waters where an artist like Wizkid – who is definitely not a household name – is selling out the state-of-the-art Tottenham Hotspur Stadium”
What do you consider to be the biggest opportunities and threats for the market at this point?
“I think this ‘gin and tonic’ relationship between spending more on subscriptions and then spending even more on live music is so intriguing and really needs unpacking. The chart below paints a picture, let me add some ‘tone’ as it’s worth asking a few ‘what if’s?’
“What if growth in music subscribers were to stall this year, would that lead to a negative knock on effect for live music?
What if the ‘mental budgeting’ meant consumers were to cut their music budget, either unsubscribing or reducing their gig-going frequency?
What if one of the large DSPs were to go all in with a promoter and bundle subscription and ticketing?
When I watch what Dice is doing, I think a lot about this.”
Your 2022 forecast was on the money; what are your predictions for 2023?
“Bigger, and more stadium-heavy! I’m going to ask IQ readers to think long and hard about this headline More than 1 million attend London concerts in a week. That’s insane! We really are in uncharted waters where an artist like Wizkid – who is definitely not a household name – is selling out the state-of-the-art Tottenham Hotspur Stadium. I think those headlines are going to become the rule, not the exception, across the UK in 2024.”
CTS Eventim reaches €1 billion revenue milestone
CTS Eventim has announced it has surpassed €1 billion revenue within the first six months of a financial year for the first time.
The pan-European giant’s H1 2023 results showed €1.021bn in consolidated revenue, up 39% year-on-year, part of which is attributed to the lifting of Covid restrictions. However, revenue was also up 47% on the pre-pandemic year of 2019.
The German-headquartered company reported growth across all segments for January to June 2023, with revenue in Eventim’s ticketing division climbing 41% year-on-year to €284.6 million. Online ticket sales increased 23% on the same period 12 months earlier. Normalised EBITDA rose by 48% to €122.3m. Its core markets in Germany, Italy and Austria remain the biggest growth drivers.
Revenue in the live entertainment segment reached €751m (up by 39%), while normalised EBITDA for the segment improved to €48.5m (up 21%). In excess of €50m was generated in the US in the first half of 2023, with revenue for the year as a whole expected to top €100m. Highlights for the first half of the year included tours by Hans Zimmer and Pink, as well as international sporting events such as the World Athletics Championships.
“In the first half of this year, CTS Eventim has demonstrated great flexibility and entrepreneurial ingenuity on all fronts”
“The breadth and depth of our portfolio and the successful internationalisation of our business are the key drivers of our strong and stable growth,” says CEO Klaus-Peter Schulenberg. “After the market distortions caused by pandemic-related catch-up effects, we are now back to ‘business as usual’ at CTS Eventim. And ‘as usual’ for us means healthy organic growth and the development and expansion of new and existing business segments.
“In the first half of this year, CTS Eventim has demonstrated great flexibility and entrepreneurial ingenuity on all fronts, enabling us to successfully navigate current macroeconomic challenges and stay on track for healthy growth. All relevant key figures confirm that both the wider market and our group continue to perform at higher levels than before the pandemic.”
The group’s normalised EBITDA reached €170.8m for the first half of 2023 (up by 39% year-on-year) and €94.8m for the second quarter of 2023 (down 5% year-on-year), although earnings in Q2 2022 were boosted by government subsidies of around €25 million under pandemic-related economic aid programmes.
The H1 figures do not include the presale for Taylor Swift’s The Eras Tour – comfortably the top seller for the current year – which did not happen until July. CTS’ executive board says expects both revenue and normalised EBITDA to increase in 2023 overall compared with 2022.
The company’s share price had dipped by around 1% today (24 August), standing at €57.40 at press time.
Endeavor CEO toasts ‘best year’ for music touring
Endeavor says live music is “on fire” after the WME parent company posted revenue of $1.436 billion (€1.3bn) for the second quarter of 2023.
Net income hit $666.5m and adjusted EBITDA was $304.9m, while Q2 revenue for Endeavor’s representation segment was $381.1 million, up 6.5% on the same period in 2022, with year-over-year growth across all four reporting segments.
WME, whose roster includes Justin Timberlake, Adele, Bruno Mars, Pearl Jam, The Killers, Bjork, Foo Fighters, Stormzy, St Vincent, Shakira and Snoop Dogg, is having its “best year for music touring”, according to CEO Ari Emanuel.
“Broadway is coming back strong, comedy tours are selling out and we’re having our best year for music touring,” Emanuel told investors during the firm’s Q2 earnings call. “In country music in particular, more than 100 WME clients participated in nearly 200 performance slots throughout CMA Fest Week in June.”
Meanwhile, the $1.25bn sale of its IMG Academy business has allowed the company to begin share buybacks of up to $300 million of Class A common stock in the third quarter.
Emanuel also delivered an update on TKO Group Holdings, the new publicly listed company consisting of UFC (Ultimate Fighting Championship) and WWE (World Wrestling Entertainment), saying the deal is expected to close in mid-to-late September 2023.
“We delivered solid results this quarter at Endeavor and are closing in on the launch of TKO Group Holdings”
“We delivered solid results this quarter at Endeavor and are closing in on the launch of TKO Group Holdings,” he says. “Our share repurchase plan and dividend payment initiatives will begin in the third quarter, and we remain focused on maintaining prudent capital allocation and delivering long term sustainable growth for the company.”
Elsewhere, Endeavor CFO Jason Lublin estimated the Hollywood writers’ dispute would cost the company $25m a month in revenue.
“This is the first time in 63 years both WGA and SAG-AFTRA are striking simultaneously,” he said. “We currently estimate the strikes will adversely impact our revenue by approximately $25 million per month on average, which largely flows through to adjusted EBITDA.
“However, without knowing the scope, duration and shape of the eventual recovery, especially given that the SAG-AFTRA strike is a relatively new development, having taken effect only on July 14, it would be premature to speculate the aggregate dollar impact for the balance of the calendar year.”
Cash and cash equivalents totalled $1.616bn compared to $718.7m at 31 March, 2023, while total debt was $5.110bn at 30 June 2023, compared to $5.151 billion at 31 March 2023.