CTS Eventim shares up 60% in 2019
German entertainment behemoth CTS Eventim has enjoyed a profitable 2019 so far, with the creation of promoter network Eventim Live and expansion of online ticket sales driving “significant growth” in live entertainment and ticketing respectively.
The company’s share price has risen by 61.5% since January, climbing from €33.8 to to €54.6, following a “successful” first half of the year and strong third quarter results. Earlier this month, Eventim traded at an all-time high of €55.5.
At the time of writing, the company’s market capitalisation sat at €5.2 billion, a significant increase from the €3.9bn recorded in the first half of 2019, indicating an acceleration of growth as the year has progressed.
Group revenue surpassed €1bn for the first time in a nine-month period, up 16.5% from the same period in 2018 to €1.1bn. Normalised EBITDA (earnings before interest, tax, depreciation and amortisation) also saw an increase from the previous year, rising 26.5% to €177m.
According to Eventim CEO Klaus-Peter Schulenberg, the company has “significantly improved” its online ticketing volume in 2019. The company has sold 36.8m tickets through its online channels so far this year – a 9.2% increase year-on-year – which has helped drive ticketing revenue up by 11% to €306.9m.
“Our aim is to offer international tour opportunities to artists from all over the world”
Schulenberg adds that the increasing number of tickets sales through digital channels “has positive and long-term impacts” for the company.
Live entertainment revenue “exceeded expectations” rising 19% to €781.4m, whereas normalised EBITDA grew “disproportionately” by 52.7% from the first nine months of 2018, reaching €57.8m. Eventim puts the growth down to “major tours” put on by Eventim Live promoters in Germany, as well as by newly acquired promoters abroad.
Russian promoter Talent Concert International (TCI) was the most recent addition to the pan-European promoter network, with Austria’s Barracuda Music potentially joining in the near future.
“CTS Eventim is on course to achieve the targets for the 2019 financial year,” comments Schulenberg. “The establishment of our promoter network, Eventim Live, is opening up additional avenues for us in the [live entertainment] field. Our aim is to offer international tour opportunities to artists from all over the world.”
The CTS boss adds that “by taking a stake in France’s market leader, France Billet, we have also achieved a major and strategic step forward in the ticketing segment. In this way, CTS Eventim is extending and reinforcing its market position in a commercially attractive and culturally diversified market.”
Read IQ‘s anniversary feature on 30 years of CTS Eventim below.
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DEAG reports 24% organic growth in Q1
Deutsche Entertainment AG (DEAG) has reported that its financial year 2019 is off to a strong start, showing high rates of organic growth and an increase in earnings compared to the previous year.
The German promoter and ticketing company recorded sales amounting to €25.5 million in Q1 2019 and a rise in EBITDA (earnings before interest, taxes, depreciation and amortisation) to €1m, compared to €800,000 in the same period of the previous year.
For the remainder of the year, the executive board expects that investments in companies in the three core markets of Germany, England and Switzerland will generate further growth in sales and EBITDA. The investments are currently close to completion.
According to DEAG, the increase in sales in Q1 equates organic growth of almost 25%, after adjusting the previous year’s figure (€27m) for the sales contribution of Raymond Gubbay Limited (€6.5m).
DEAG sold its shares in UK-based show producer Raymond Gubbay Live to Sony Music Entertainment International Limited in 2018.
“The board expects that investments in companies in Germany, England and Switzerland will generate further growth”
The DEAG report states that all five of its divisions – rock/pop, arts and exhibitions, family entertainment, classical and jazz and ticketing – have contributed to growth.
The “excellent start” to the 2019 financial year follows a successful 2018 for the Berlin-based company. Preliminary figures show revenue amounting €200.2m, a 25% increase on the previous year, and a significant 123% growth in EBITDA.
In 2018, DEAG eliminated most of its minority holdings and joint ventures, acquiring all remaining shares (50%) in Swiss classical music promoter the Classical Company, as well as taking full control of DEAG Classics and ticketing platform MyTicket – the first ticketing agency in Germany to allow payment via Amazon Pay.
According to the International Ticketing Yearbook 2018, DEAG promotes around 4,000 concerts and events each year, selling more than five million tickets annually.
DEAG will publish its complete quarterly financial statement on its website tomorrow (Wednesday 29 May).
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LN reports strong start to 2019, Q1 revenue up 17%
Live Nation’s first quarter earnings show 2019 is off to a strong start, following the company’s eighth consecutive year of record annual results in 2018.
In the first quarter of 2019, revenue was up 17% to US$1.7 billion in comparison to Q1 2018 and adjusted operating income (AOI) was at its the highest-ever for a first quarter at $115 million. The entertainment behemoth ran at an operating loss of $24m.
Live Nation states that its concerts segment is the “engine that powers the overall growth” of the company. Almost 15 millions fans attended Live Nation concerts during Q1, up 22% year-on-year. As of mid-April, the company had sold over 49m tickets so far this year, up 5% from Q1 2018.
The company’s arena and theatre shows led this growth, each up over a million fans. Concerts revenue was up 27% and operating loss for the segment improved by 7%. Live Nation notes that demand has not diminished despite an increase in pricing of 30% over the past two years at arena and amphitheatre shows.
“We expect that Live Nation will deliver double-digit operating income and AOI growth for the full year”
Ticketing revenue was down 9% from Q1 2018, although Ticketmaster delivered its fourth highest gross transaction value quarter ever. Live Nation puts the decrease down to the moving forward of on sales to Q4 2018. By mid April, Ticketmaster had sold four million more concert tickets for 2019 shows than at the same time last year.
Typically the “lowest activity quarter for sponsorship”, sponsorship revenue increased by 1%, operating income by 3% and AOI by 2%. The company expects growth in this area to be driven by festival and strategic partners, including Rogers Communications in Canada and Diageo in Europe.
“We are pleased with our first quarter results as a start to what we expect to be another year of growth in 2019,” says Live Nation chief executive, Michael Rapino.
Rapino predicts further acceleration of growth in Q2. “With the combination of this near-term view plus concert ticket sales for the year, sponsorship commitments, and the continued success of the Ticketmaster platform, we expect that Live Nation will deliver double-digit operating income and AOI growth for the full year,” says the Live Nation boss.
Provisional figures show strong FY 2018 for DEAG
Deutsche Entertainment AG (DEAG) has released its preliminary figures for financial year 2018, recording significant growth and beating its sales and earnings forecast.
The German promoter and ticketing company increased revenue to €200.2m, up 25% on the previous year’s €159.8m, while earnings before interest, taxes, depreciation and amortisation (EBITDA) grew a huge 123%, to €14.6m (previous year €6.5m). A significant increase of earnings before interest and taxes (EBIT) was also recorded: 110%, to €10.6m, from €5.1m the previous year.
The company had expected strong results, revising its growth forecast for the fourth quarter of 2018 following its first positive EBIT figure in Q3 since 2012. DEAG also announced plans to issue a new corporate bond to finance further growth.
In 2018, DEAG eliminated most of its minority holdings and joint ventures, acquiring all remaining shares (50%) in Swiss classical music promoter the Classical Company, as well as taking full control of DEAG Classics and ticketing platform MyTicket.
The German promoter views “realistic opportunities for internal and external growth” across its five business divisions in 2019
Hailing its “excellent start” to the 2019 financial year, the Berlin-based company says its “very well-filled event pipeline forms a solid basis for a positive business development in 2019”, with “realistic opportunities for internal and external growth” across its five business divisions: of rock/pop, classical and jazz, family entertainment, arts/exhibitions and ticketing.
The company recently appointed Roman Velke as chief financial officer. Velke will take over from Ralph Quellmalz on April 1.
DEAG will publish the full report on financial year 2018 with the final figures on 29 March 2019.
Record turnover for Spanish live music business
The tenth edition of the Spanish Association of Music Promoters (APM)’s Live Music Yearbook (Anuario de la música en vivo) has brought good news, reporting a record annual turnover of €334 million for Spain’s live music industry.
The record-breaking revenue follows five consecutive years of growth for the Spanish live music market and represents a 24% increase on 2017. The consistent growth means that the 2018 turnover is the biggest-ever recorded for the Spanish industry, superior even to figures generated before the 2008 financial crisis.
The turnover signals the recovery of the sector following a cut in cultural tax in 2017, from 21% to 10%. The Spanish government had hiked tax on cultural shows in 2012, causing serious problems for the Spanish live industry, which lost €100 million and 27.5% in revenue from ticket sales between 2012 and 2013.
According to APM, the majority of revenue was taken in July and August 2018. Major one-off stadium shows from Guns N’ Roses and Iron Maiden coincided with tours from international Latin artists Luis Miguel (8 dates), Shakira (5 dates) and Alejandro Fernández (8 dates).
The association also indicated a rise in music tourism, the importance of which has now been recognised by institutions, such as the new section dedicated to festivals at the International Tourism Fair (Fitur).
The record-breaking revenue comes following five consecutive years of growth for the Spanish live music market
Bruno Mars attracted the biggest crowds, drawing 110,000 fans across two concerts in Barcelona and Madrid. Latin artists Ricky Martin and Shakira also proved popular, with Martin playing to 79,657 fans over 10 dates and Shakira performing to 71,000 over five shows.
APM announced the results of elections at its AGM in Palma de Mallorca in February. Members re-elected Albert Salmerón as president, with Tito Ramoneda as vice president and Carol Rodríguez, Maricruz Laguna and Julio Martí as board members. Patxi Miranda also joins the board.
The promoters’ association outlined its plans for the coming years, which include the modification of working regulations for musicians and the drawing up of a plan to ensure the recognition of the cultural, social and economic value of the music industry.
APM has now partnered with four main ticketing companies: El Corte Inglés, CTS Eventims’s Spanish operation entradas.com, See Tickets and Ticketmaster. The association maintains Ifema and el Palau Sant Jordi as venue partners.
Growing concert market bucks global slowdown
The global market for live music will be worth nearly US$29 billion by 2021, as the concert business defies a plateauing entertainment and media (E&M) ecosystem to deliver another five years of solid growth.
That’s according to consultancy firm PricewaterhouseCoopers (PwC), whose respected annual Global entertainment and media outlook survey reveals live music revenue – from ticket sales and sponsorship – will grow at a compound annual growth rate (CAGR) of 3% through 2021, making up a “little more than 50%” of total music revenue over the period.
That compares to growth of 20.7% for music streaming, which is forecast to be worth $17bn in 2021, amid a collapse in sales of physical music (-11.6%) and digital downloads (-19.2%), reveals the latest edition of the report, Global entertainment and media outlook 2017-2021, shared with IQ by PwC.
Analysing the data, PwC notes the concert business is becoming “increasingly international” in outlook. “The live music sector continues to deliver, with further growth expected around the globe,” reads the Outlook. “Fans appear to have an almost insatiable appetite for music events, with festival brands eager to export their franchises overseas – last year saw Miami’s Ultra Music Festival debut in Brazil, and the Mexico-based BPM Festival will be heading to two new markets in 2017.”
Its analysts additionally highlight the increasing maturity of, and consolidation in, the sector – “a handful of leading promoters dominate live music events on a worldwide basis”, it notes – with “sector behemoth” Live Nation continuing its run of acquisitions and rival AEG Presents “focusing on strengthening its ties with brands” such as MGM Resorts and Toshiba at AEG venues.
“The market is being defined and propelled by consumers’ increased demand for live, immersive, sharable experiences”
The increasing age of the average arena/stadium draw also draws comment from PwC, with the report noting that a “large proportion of the artists topping the worldwide touring charts last year, among them Bruce Springsteen, Guns N’ Roses, Paul McCartney and the Rolling Stones, have also been dominant for decades”.
The positive news for the live business, which is consistent with the findings of last year’s survey, comes amid a slowdown across the wider E&M landscape, with newspapers, magazines and home video all in decline and anaemic growth predicted for revenues from cinema box office (1.2% CAGR) and traditional TV advertising, especially in developed markets. “While there are increases in revenue, E&M is approaching an industry plateau,” says PwC.
Total E&M revenues – which also include books, outdoor advertising, radio, video games and more – are projected to increase 4.2%, from $1.8 trillion in 2016 to $2.2tn in 2021; down slightly on the 4.4% predicted last year.
“The broad pattern in the global E&M market is clear: as countries become more developed, E&M spending per capita relative to its GDP increases and growth slows,” the report reads. “In fact, most E&M segments will fail to keep pace with GDP growth over the next five years.
“Although only two segments, newspapers and magazines, are declining in absolute terms [as opposed to relatively], many others are slow-growing and not keeping pace with the general rate of economic growth.”
Although starting from a tiny base level, two of the fastest-growing sectors are esports and virtual reality (VR), both of which are “just beginning to accelerate” – and are also growing in importance for producers of live entertainment.
“A greater range of esports tournaments across a wider suite of games will mean many new consumers feel the pull of attending a live event”
Revenue from VR video – which has been embraced by several music-biz giants, including Live Nation and Universal Music Group – is set to grow at a CAGR of 91%, reaching a value of just over $8bn in 2021, while the esports, or competitive video-gaming, market will grow at 22%, with revenues reaching a more modest $874m over the same period.
However, PwC warns that margins for developers of VR technology remain “slim”, with hardware companies likely to seek a cut of the sales of the VR content in order to become profitable. “VR technology is complex, difficult to support and needs to retail at a cost acceptable to mainstream consumers – only a few early adopters will be willing to pay prices in excess of US$700 per headset seen in the current market,” the Outlook says. “No one will get rich from hardware alone; the endgame for these firms will be attempting to become the standard platform for VR and hence start to charge royalties or commission from content sales.”
Despite a steady rise in the number of people with VR headsets – there will, says PwC, by 2021 be “enough headsets in consumer hands to drive an advertising market” – virtual reality remains a potentially lucrative but “highly immature” market “with underdeveloped business models, flaky hardware and lots of experimental or low-quality content”.
The company is more upbeat on esports, which it says has so far seen “strong growth […] as interest rises worldwide, tournaments and leagues become more sophisticated and sponsorship and other development money pours in to the discipline.”
Several live music companies, including AEG, Australia’s TEG Live and Vivendi in France, have already partnered with esports promoters, with other positive indicators including the steady release of new games suitable for esports, such as recent hit Overwatch, and the creation of “suitable infrastructure” worldwide (including the opening of the Gfinity Arena, the UK’s first dedicated esports arena, in London).
“Companies need to harness the economic, social and emotional power of fans”
Additionally, “a greater range of tournaments across a wider suite of games will mean many new consumers will feel the pull of attending a live event”.
If there is one overarching theme from the 2017 report, it’s the importance of “user experience”: By increasing engagement with fans – and in the process collecting more data – companies can, it reads, “further refine, target and engage their core audiences in ways that delight and retain them. That ultimately creates further opportunities for value creation.”
Christopher Vollmer, PwC’s global advisory leader for entertainment and media, explains: “Amid an ever greater supply of media, businesses that are fan-centric will find themselves with audiences that are more engaged, more loyal and spend more per capita. To thrive in the experience-driven marketplace characterised by this year’s Outlook, companies need to attract and harness the economic, social and emotional power of fans.”
“The next era of differentiation in E&M is being defined and propelled by consumers’ increased demand for live, immersive, sharable experiences,” adds Deborah Bothun, PwC global entertainment and media leader. “Consumers want to get closer, more engaged and better connected with the stories they love – both in the physical and digital worlds.”
A similar, ticketing-specific, report published earlier this year by Technavio gave a 7% CAGR for concert ticketing, with a 2021 value of $24.6bn.
Live biz drives massive year for music in NZ
Live music was responsible for 83% of all growth in the New Zealand music industry in 2015, and provided almost all of its new music jobs, in a huge year for the country’s concert and festival sectors, new data reveals.
According to PricewaterhouseCoopers (PwC)’s just-released Economic contribution of the New Zealand music industry 2015 report, commissioned by Recorded Music NZ, APRA AMCOS and the NZ Music Commission, the music industry contributed NZ$484 million (US$346.7m) to the New Zealand (NZ) economy in 2015.
Of that, $157.8m (roughly a third) came from the live market, which increased sales by a massive 54% compared to 2014’s total of $102.2m, driven primarily “by a number of international heritage acts” – Elton John, Simply Red, Eagles, Billy Idol, Faith No More, Judas Priest and Fleetwood Mac among them – “touring NZ in 2015”, says Recorded Music NZ, as illustrated in the below graph by PwC:
In addition to its direct economic impact, PwC found the live music sector accounted for “almost all of the industry’s annual growth in direct employment” last year – a far “greater share of the sector’s direct and total employment than of its GDP impact” – noting (somewhat obviously) that “this suggests that it is more labour-intensive and lower in labour productivity than other parts of the sector”.
This is illustrated in another infographic, courtesy of Recorded Music NZ, below:
And it was good news for the recorded sector too: with the growth of streaming, which is “now the top source of revenue for record companies and recording artists”, 2015 saw the the first annual increase in “retail music” (combined physical and digital) for 15 years.
Indian ticketing giant BookMyShow grows 85%
BookMyShow, India’s largest primary ticket agency, returned to profit last year, its latest financial results reveal, with an 85% growth in turnover to ₹2.36 billion (US$35.24 million) for a net profit of ₹31.7 million (US$473,308).
The 2015–2016 financial year (FY16) marked the first time the company’s books have been in the black since 2012–2013 (FY13) – profitability being a “rarity in [the] Indian e-commerce sector”, says the Indian Economic Times – and compares to losses of ₹135.2m and ₹39.8m in FY15 and ’14, respectively.
Online/mobile platform BookMyShow, owned by BigTree Entertainment, leans towards film ticketing, which comprises around half of its business, with live events and sports contributing 35% and advertising the remainder. According to the International Ticketing Yearbook 2016, its share of the Indian live entertainment market stands at 85–90%.
The company in July raised over $80m in venture-capital funding from the US-based Stripes Group, whose managing partner Dan Marriott said BookMyShow is “uniquely positioned to tap into India’s […] entertainment market, which [is] among the fastest growing globally”.
Vorsprung durch Musik
The most recent numbers available on the German live entertainment market date back to 2014, when the BDV (the German promoters’ association) put the overall revenues of the sector at €3.8 billion, €2.7bn of which were generated by music events. “Since, on the one hand, more tours and concerts than ever are taking place, and since ticket prices haven’t gone down over the past years, I think overall revenues have continued to grow,” Professor Jens Michow, the president and CEO of BDV, tells IQ, while cautioning that profits may not have risen in line, “as costs in all areas, especially artist claims, are constantly increasing. And since the audience’s [financial] capabilities are eventually limited, rising costs cannot be passed on to the consumers. Hence, as head of the association, I can only ask all involved – but especially the artists – to be moderate.”
One of the major recent developments in Germany has been the entry into the market of Live Nation. Michow says that while local promoters, in particular, had been apprehensive at the beginning, “many concerns proved to have been unsubstantiated. In Germany, we say: competition invigorates business. My impression is that the new global player in the German market has prompted many to be more transparent and optimise their service offering.”
Indeed, most promoters profess to be happy with their respective businesses. Dieter Semmelmann, founder and CEO of Semmel Concerts, calls the economic climate of the live events market “very positive. Everything indicates a stable market condition and a good sentiment within the industry.”
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UK exports grow—but GVA down as grassroots slumps
The value of the British live music industry contracted slightly in 2015, hit by a decline in revenues from the UK’s dwindling network of small- and medium-sized venues.
The 2016 edition of UK Music’s Measuring Music report, released today, reveals the gross value added (GVA) by the live sector to the UK economy last year fell to £904 million – down from £924m in 2014 – attributed by the industry group’s chief executive, Jo Dipple, to “a drop in concert revenue from grassroots music venues”.
In her foreword to the report, Dipple says grassroots venues “need investment now. Music Venue Trust argues that a 10% increase in attendance at grassroots venues would generate an additional £13m in ticket revenue. This cannot happen whilst grassroots music venues are forced to close, if they lack the investment to modernise or if new ones aren’t built.”
While a 2% decline in GVA is by no means good news, £904m is still a significant improvement over 2013 (when the figure stood at £784m), and all other areas of the live sector grew in 2015.
Export growth – which includes both non-Britons spending money on concert/festival tickets and non-resident consumers or businesses “making purchases outside the UK, which, through a wide range of channels, transfer back across international borders to businesses resident in the UK” – increased 35% in 2015, from £42m to £57m, and 90% in the four years between 2012 and 2015.
“We must ensure the challenges facing grassroots venues are addressed in order to secure continued growth and investment in live music”
Employment was also up – albeit it very slightly – from 25,100 to 25,150 (0.2%), although the figure grows to 26% when compared to 2012.
The GVA by the music industry as a whole (live; recorded; publishing; music representatives; producers, studios and staff; and musicians, composers, songwriters and lyricists) grew to £4.133m, a slight increase of £25m on 2014’s figure and 17% on 2012, with the “live sector especially thriving over that period”, says UK Music chairman Andy Heath.
Addressing live’s 2014–2015 dip in GVA, Dipple says: “We must ensure the challenges facing this vital part of the music ecosystem [grassroots venues] are addressed in order to secure continued growth and investment in live music.
“We need policies and investment to secure a platform for the headliners and chart-toppers of tomorrow.”