Croatia’s INmusic pulls 2023 edition due to inflation
INmusic, Croatia’s biggest open-air music festival, has pulled the plug on its 2023 edition due to a myriad of financial challenges.
“The ongoing repercussions of the pandemic, the war in Ukraine, inflation, and general sense of insecurity many of us feel in our everyday lives, have resulted in conditions which do not allow for a fully independent festival such as INmusic to take place,” reads a statement from the organisers.
“In the current circumstances, it is not possible to deliver the best possible international live music programme for a ticket price set in accordance to the local audience’s financial limitations,” it continues.
“[These] conditions do not allow for a fully independent festival such as INmusic to take place”
“Unwilling to give up either one of those principles which make INmusic festival what it is, and honouring your support since 2006 and attendance which enabled the festival to grow and develop with each edition, we have concluded it is best to focus our activities on securing the necessary preconditions for a stable continuity of INmusic festival in the future.”
The annual festival typically takes place across three days in June in the Croatian capital of Zagreb with an international-heavy lineup.
Last year marked INmusic’s 15th edition which was extended from three days to four and featured artists including The Killers, Nick Cave & The Bad Seeds, Deftones, Royal Blood, IDLES and Kasabian. Details had not been announced for the 2023 instalment.
The organisers say they are hoping to hold the 16th edition in 2024 and share dates with fans in the following months.
— INmusic festival (@INmusicfestival) February 13, 2023
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Animal Collective axe UK/European tour dates
Animal Collective have pulled the plug on their forthcoming UK and European tour, citing “inflation, currency devaluation, bloated shipping and transportation costs”.
The US band were due to kick off their outing on 2 November in Ireland, with dates in Brighton, Bristol, Manchester, Glasgow and London before moving on to Europe.
Last night (10 October) the quartet issued a lengthy statement saying they are “choosing not to take the risk to our mental and physical health with the economic reality of what that tour would have been”.
“We simply could not make a budget for this tour that did not lose money even if everything went as well as it could,” the statement read.
“We have always been the kind of people to persevere through the difficult times and get on stage unless our health prevented it… we hope you understand and that you know we would not make a choice like this lightly.”
“We are choosing not to take the risk to our mental and physical health with the economic reality of [the] tour”
Currency devaluation is a growing concern in the touring industry and was noted in a recent IQ interview with AEG Presents UK chief Steve Homer.
“One of the biggest things that’s causing us concern is the pound-to-dollar rate at the moment [the pound hit a record low against the dollar last month but has since rallied 10%],” he said. “We were almost on parity, which has not been something we’ve been familiar with for a long, long time. And it’s really biting in terms of artists touring over here – it becomes far more expensive for them to do it and it’ll be interesting to see how that impacts going forward.
Animal Collective’s statement comes after a slate of tour cancellations from Santigold, Arlo Parks, Shawn Mendes, Sam Fender, Russ, Wet Leg, Disclosure, Placebo, alt-J, Pale Waves and Anthrax, all of whom cited mental health and/or logistical difficulties as the reason.
At the same time, huge tour announcements are stacking up for 2023, with Pink, Depeche Mode, Iron Maiden, Lizzo, The 1975 and Dead & Company among the latest artists to confirm major tours.
Read Animal Collective’s full statement below.
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Festival heads talk costs: “There is trouble ahead”
European festival heads discussed the impact of spiralling costs on the 2022 and 2023 festival seasons at last week’s Reeperbahn Festival in Hamburg, Germany.
Stephan Thanscheidt (FKP Scorpio, DE), Catharine Krämer (DreamHaus, DE), and Codruța Vulcu (ARTmania, RO) were among the pros discussing higher expenses during the Festival Season 22/23 panel.
Thanscheidt told the panel that while Hamburg-headquartered FKP Scorpio sold out 27 of its 28 festivals, the margins were “complete shit” due to higher expenses.
“Production costs are up 25–30%,” he said. “It depends on the department because some [costs] are up just 10% but others were like 120%. This year we were put into a corner where we could either say yes [to the increase] or just not do the festival.”
The company’s festival portfolio includes Hurricane (DE), Southside (DE), Provinssi (FI), Sideways (FI), Greenfield (CH), Best Kept Secret (NL) and new festival Tempelhof Sounds (DE) – some of which were €30 to €50 more expensive to attend this year.
While FKP Scorpio sold out 27 of its 28 festivals, the margins were “complete shit” due to higher expenses
“We’re trying to [increase ticket prices] in a very smooth way,” said Thanscheidt. “If we get to €400–500 for normal festival tickets, we’ll have a problem. We’re trying to be very sensible in setting the prices. So we’re very happy that the audience was fine with that and we sold all the tickets without getting a shitstorm on socials or something.”
In Romania, rising costs are only exacerbated by the country’s close proximity to the war in Ukraine.
“The inflation rate is 15.5% which is extremely high so everything from production to personnel was completely out of proportion,” said Vulcu, CEO of ARTmania, Romania’s longest-running rock festival.
Vulcu told the panel that many of the festival’s partners backed out of supporting the 2022 event but the main sponsor, German hypermarket chain Kaufland, offered to make up the slack.
“They said ‘Okay, let’s give you some more money to survive. Can we take extra costs from you that we can put on our budgets?’ So it was a positive and totally unexpected turn but apparently, they were they are wanting to be the saviours of festivals,” she said.
“The inflation rate [in Romania] is 15.5% so everything from production to personnel was completely out of proportion”
Looking towards next year’s ARTmania, which is already on sale, Vulcu says it’s hard to see how the festival can spread skyrocketing costs.
“We book mainly internationally and the prices that I’m getting from some artists are not low but we can’t put the ticket prices so high that the young people can’t come,” she explained.
DreamHaus’ Krämer says the Berlin-based agency is facing a similar stalemate situation for next year’s festival season after their production costs increased 25–30%.
“No supplier will ever say ‘We’re going back to the prices that we had in 2019’,” she said. “So we could lower the cost of the whole festival experience but this would have a significant impact on the whole quality of it.”
CTS Eventim-backed DreamHaus is jointly responsible for organising and programming the Rock am Ring and Rock im Park festivals, which have a combined attendance of 150,000, among other events.
“We could lower the cost of the whole festival experience but this would have a significant impact on the quality”
Referencing Thanscheidt’s earlier point, Krämer added: “There are not that many suppliers that can supply festivals of our size so we’re also in a corner, where we can take it or leave it.”
Thanscheidt says the crisis will only get worse ahead of next year’s season, though he’s bullish about the industry’s ability to come up with solutions.
“Costs will not go down next year,” said Thanscheidt. “Gas and electricity prices are doubled now and they will be tripled in a few weeks. Inflation might go up again.
“There are some months of trouble coming up and the result is yet to be seen. But of course, we will all stay very positive because that’s what we always do in an industry in which most of us have a DIY background. So let’s see how we solve this but it will not be easy.”
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European trade bodies rally governments for energy aid
European live music trade bodies are lobbying for government-backed support packages to mitigate rocketing energy bills and prevent the sector from collapsing.
Last month, IQ heard from a number of European arenas who say that skyrocketing energy costs are emerging as the sector’s biggest challenge since the Covid-19 pandemic. ASM Global’s Marie Lindqvist said the prices for electricity and gas at the company’s venues have quadrupled since the beginning of the year, with the UK being hit the hardest.
UK live music trade bodies today (21 September) welcomed the government’s Energy Bill Relief Scheme for businesses but have called for further clarification of the details.
The scheme, revealed by the Department for Business, Energy and Industry, will see energy bills for UK businesses cut by around half of their expected level this winter.
The news comes after it was revealed that some UK live music venues are seeing their energy bills increase by an average of 300% –in some cases as much as 740% – adding tens of thousands of pounds to their running costs.
Under the new scheme, wholesale prices are expected to be fixed for all non-domestic energy customers at £211 per MWh for electricity and £75 per MWh for gas for six months between 1 October and 31 March 2023.
The support is equivalent to the Energy Price Guarantee put in place for households and applies to fixed contracts agreed on or after 1 April 2022, as well as to deemed, variable and flexible tariffs and contracts.
UK live music trade bodies today welcomed the government’s Energy Bill Relief Scheme for businesses
This scheme will apply to England, Scotland, and Wales, with a parallel scheme will be established in Northern Ireland, and will be reviewed after three months with an option to extend support for “vulnerable businesses”. However, it is not yet clear whether the live music sector falls into this category.
LIVE CEO Jon Collins welcomes the support but says the government must sustain it past the next six months. “Spiralling energy prices have already forced music venues up and down the country to close or curtail their programming and this will begin again as soon as this support is removed – it is plainly obvious that live music must be on the list of sectors considered ‘vulnerable’ by government.
“With our industry still hurting from the aftereffects of Covid and rising costs across the supply chain, we continue to make the case that our sector needs action on VAT and business rates if we are to keep all concert halls, arenas, festivals, and grassroots music venues open, bringing joy to millions and showcasing the best UK and international talent.”
Music Venue Trust (MVT) CEO and founder Mark Davyd has also warmly welcomed the package, saying the scheme “appears at face value to comprehensively tackle the immediate short-term energy crisis for grassroots music venues”.
“We await full details of the scheme and the method of implementation by the energy retailers and suppliers, but the base unit rate of 21.1p per kW/h laid out by these plans is sufficient to avert the collapse of the sector if it is fully delivered,” says Davyd.
“We understand that the government plans to bring forward controls to ensure that this target price is delivered and we look forward to reading their plans to implement this rate as a maximum for all music venues in the UK.”
The scheme “appears at face value to comprehensively tackle the immediate short-term energy crisis for GMVs”
However, MVT is also urging the government to clarify which sectors fall into the “vulnerable businesses” category: “The government has indicated that ‘pubs’ will attract support for longer than the six-month initial period based on the special circumstances of the energy crisis in relation to the operation of their business.
“We have asked for urgent clarification that the broad term ‘pub’ includes music venues and other licensed premises essential to the grassroots music ecosystem, and anticipate that this will be the case.”
The trade bodies have pointed out that further support is needed, in addition to the scheme, in order to stabilise the sector after the Covid-19 pandemic. The sector is calling on the Chancellor to reduce VAT on ticket sales to 5% and reform business rates in the mini-budget expected this Friday (23 September).
Elsewhere in Europe, markets including the Netherlands and Germany are still lobbying for critical support to curb “disastrous” energy costs for live music businesses.
In the Netherlands, the Association of Theatre and Concert Hall Directors (VSCD) says a large proportion of its 151 members are in danger of getting into financial trouble due to rising energy costs and inflation.
“For many venues, the rise in energy costs is disastrous. The expectation for next year is that we will be seven times more expensive. Even if we sell out every performance, this cost increase is impossible to absorb,” says Mirjam Radstake, director of Theater Hanzehof and Buitensociëteit in Zutphen.
VSCD is calling on the Dutch government to help local authorities subsidise venues’ energy bills
With only 7% of its members receiving some form of compensation to cover the costs, VSCD is calling on the Dutch government to make an extra contribution to the municipal fund so that local authorities can subsidise venues’ energy bills.
The association argues that, currently, subsidies do not reflect venues’ rising costs, which also include a 9.7% rise in rent and a 10% increase in the minimum wage, and that passing these costs onto the public is not an option.
“If we increase the ticket price, the public will drop out,” says Charles Droste, director of Cultuurbedrijf Amphion in Doetinchem.
“At the moment, 25% fewer tickets have been sold with us in September than in September 2019. The public seems to be waiting for rising energy costs and inflation.”
Earlier this week, the Taskforce Creative Culture and Media also sent a letter to the cabinet, containing a general plea to protect the sector against the current inflation and increased energy costs.
Meanwhile, Germany’s live association, the Federal Association of the Concert and Event Industry (BDKV), is calling on the federal government to design a special relief programme for the events industry to put forward to the EU Commission.
Germany’s live association is calling on the federal government to design a special relief programme for the events industry
Earlier this year, the EU Commission adopted a Temporary Crisis Framework which enabled member states to be more flexible with State aid rules in order to support the economy during Russia’s invasion of Ukraine.
Under the framework, member states could grant a limited amount of aid to companies affected by the crisis, or by the subsequent sanctions and countersanctions, up to the increased amount of €62,000 and €75,000 in the agriculture and fisheries and aquaculture sectors respectively, and up to €500,000 in all other sectors.
However, in the plan, the EU Commission does not count the events industry among the “systemically important” sectors eligible for aid. BDKV is now asking for a revision to the framework, to allow businesses in the events industry to receive up to €500,000.
“Without state support, there is a risk of the industry collapsing with bankruptcies, operational closures and further migration of skilled workers and the self-employed,” reads a statement from BDKV. “This special programme is needed now and not in the near future when such help is already too late.”
Timo Feuerbach, MD of the European Association of Event Centers (EVVC), says: “The events industry has not yet recovered from the corona-related restrictions of the past few years. The consequences of the war in Ukraine, high inflation and impending bottlenecks in the energy supply are also hitting us hard. Together with the disastrous communication from the federal government on the subject of Corona, which is unsettling customers and is already costing orders, our industry is in danger of being left behind in international competition.”
European arenas battle soaring energy costs
A number of European arenas have told IQ that skyrocketing energy costs are emerging as the sector’s biggest challenge since the Covid-19 pandemic.
Though many arenas are experiencing a boom time thanks to pent-up demand and rescheduled shows, venue heads are reckoning with the ballooning cost of electricity and gas amid wider inflation.
“We are facing massive price increases across all our markets, at unprecedented levels,” ASM Global’s Marie Lindqvist tells IQ. “The market is incredibly volatile and continues to increase.”
According to Lindqvist, the prices for electricity and gas at ASM venues have quadrupled since the beginning of the year, with the UK being hit the hardest.
And it’s not just the country’s larger venues that are struggling; Music Venue Trust estimates that the grassroots music venue sector is looking at a potential £90 million in new energy-related costs, equating to 26% of the entire gross turnover.
On average, the annual cost of energy per venue is set to increase by 316%, according to the charity for grassroots music venues in the UK.
“[Rising energy prices] is probably our number one challenge right now,” Lindqvist continues. “However, the cost base, in general, is a huge challenge with pressure in all key cost lines such as labour cost inflation, event costs, food costs etc.”
“We are facing massive price increases across all our markets, at unprecedented levels”
In Estonia, inflation has risen by 22% in the last year, which is particularly felt in labour and administration costs. Siim Ammon, CEO of Saku Arena (10,000) in the capital Tallinn, says gas prices are now five times higher than at the same time last year.
“This means we are forced to find alternatives or a way to lessen consumption,” Ammon tells IQ. “Sadly, this is going to hit our promoters as well.”
Lindqvist is also weary of how increasing cost pressures could impact ASM’s guests and partners and says the company is trying incredibly hard to minimise the knock-on effect.
“The actions that we have in place will ensure that we are doing all that we can to do this,” she says. “We are also in constant dialogue with our partners to try to minimise show costs, in particular energy requirements for a show.”
In the Czech Republic, it has been reported that the inflation rate (which accelerated to approximately 17.5% in July) is having an impact on consumers’ ticket-buying behaviour.
“The overall rise in prices of services, energy, food, etc. in the country has made people more sensitive to buying entertainment and pickier about which concert to go to,” says Stanislava Doubravova from the O2 Arena, the country’s key venue for international acts.
“[Rising energy prices] is probably our number one challenge right now”
AEG-owned Barclays Arena (formerly the Barclaycard Arena) in Hamburg, Germany, is among the venues that have reported a “huge” increase in energy costs. In a bid to curb prices, the 15,000-capacity arena is exploring the use of alternative sources, such as wind power and solar energy.
“Since its construction in 2009, the Barclays Arena has a greywater recycling system on the roof that collects rainwater for the sanitary system,” says VP and MD Steve Schwenkglenks, adding that the venue is reducing waste and increasing recycling across its food and beverage offers.
“We have stopped ‘All you can eat’ offers in our premium boxes, because a lot of food had to be thrown away. This doesn’t mean that every one of our lodge partners won’t get enough to eat, it’s just that we are trying to dispose of as little food as possible. At the end of 2022, we will introduce a deposit cup system in the arena.”
Much like Barclays Arena, Poland’s Spodek Arena (cap. 11,000) is attempting to bridle the energy price hike through eco-friendly solutions.
“Sadly, this is going to hit our promoters as well”
“We have introduced a system to manage and optimise the use of electricity, heat, and water; installed a smart heating and ventilation management system at the ICC, and we have also implemented special processes for monitoring the use of lighting,” says Marcin Stolarz, CEO of the Katowice-based arena.
ASM is also leaning on technology to help monitor and reduce its carbon footprint and costs. “We are able to view our consumption in real-time so track usage every day with a view to becoming as efficient as we can be,” says Lindqvist.
“We are also further investing in new technology and working closely with Greener Arena and other experts in the field to continue to move forwards in this space. Finally, we are recruiting a head of sustainability whose sole role will be to support our business to achieve our carbon reduction targets and to support our venues to be as green as they can be.”
Read more about the opportunities and challenges facing arenas worldwide in IQ Magazine‘s Global Arena Guide 2022, published this September.
The Guide features over 250 interviews from arena professionals worldwide, as well as a comprehensive global directory.
MMF CEO warns touring costs will price out artists
Annabella Coldrick, CEO of the UK’s Music Managers Forum (MMF), warns that the cost of touring will see some artists priced out of their careers, resulting in a “lost generation” of talent.
According to the CEO, the membership is dealing with a “perfect storm” of Brexit, Covid and inflation, making touring unaffordable for some acts.
“I want to be really positive because we’re so pleased that live music is back but when costs have gone up 30-40% – and you can’t put tickets up at the same level because people are working out how to pay their heating bill – that’s tough,” says Coldrick.
“Some artists can absorb the current costs of touring but most can’t. I think we’re going to have to look at how we tour and what reductions we can bring in.”
One band that has spoken up about the overwhelming cost of touring is Belfast-based band New Pagans, who earlier this year opened up about the “massive debt” they racked up on a European tour with Skunk Anansie.
“I think we’re going to have to look at how we tour and what reductions we can bring in”
“Brexit and Covid have truly done a number on small bands. To break even on a tour, or even come home with a little profit was always the goal… to come home from a tour having accumulated massive debt is now the reality for many small and independent bands in 2022,” reads a tweet from the band.
“Fuel costs, tolls, venues taking 25% of merch, buying a carnet to get through customs: just a few things conspiring against you.”
Coldrick raises concerns that the hike in prices will result in a talent drain of British artists.
“I think in five or six years’ time, you’ll see a load of artists who lost momentum because of Covid and not being able to make ends meet,” she says. “And when you look at festival bills in half a decade, they’ll be much fewer British artists on them – partly because they’ve not been able to build the audiences from touring.”
And for the acts that do continue to tour, there’ll be some tough decisions to make – both financially and creatively.
“I think in five or six years’ time, you’ll see a load of artists who lost momentum because of Covid”
“I think production will be severely stripped back for those who do go ahead with touring,” she continues. “I’ve already heard about bigger bands that would usually take three trucks and are now just taking one. We will definitely see different types of shows now.”
With no silver bullet for the cost of touring, the MMF CEO anticipates a tough few years for gigging acts but says there are some things that can ease the pressure.
A 5% rate of VAT on ticket sales is high on the CEO’s wishlist, along with acts being able to take home 100% of the proceeds from the merchandise sold at concerts.
“So many managers have spent a lot of time trying to find ways around venues taking a commission of merchandise,” she explains. “I’ve heard stories about artists hiring ice cream vans and putting them outside of the venue to sell merch, or taking over cafes. We don’t want to do that – it’s a lot more time and effort.
“We’re hoping the venues will realise that being able to make it possible for artists to tour at the moment is a key thing. I think we need to realise we’re all in it together and try and find a way to make that level of touring work or shows will get pulled and that’s not good for anyone in the industry.”
Schneiderman turns his attention to the NFL
New York attorney-general Eric Schneiderman, known in the live entertainment world as a crusader against ticket bots, has succeeded in his efforts to force the National Football League (NFL) to abandon its price floor for match tickets, under which American football fans were “forced to pay inflated prices for even the least desirable NFL games”.
Under the previous arrangement, ratified by all 32 NFL teams, secondary sellers were not permitted to list inventory on NFL’s officially sanctioned resale sites at a price lower than the face value of the ticket.
As the result of an investigation by Schneiderman, the league has abandoned the price floor and agreed to pay US$100,000 towards legal costs.
“My office will continue to fight for the rights of sports fans and concertgoers by ensuring that secondary markets are free and competitive”
“No sports fan should be forced to buy, or sell, a ticket at an artificially inflated price,” Schneiderman said yesterday. “Under the NFL’s price floor scheme, fans were forced to pay inflated prices for even the least desirable NFL games. That is a slap to both sports fans and free markets. My office will continue to fight for the rights of sports fans and concertgoers by ensuring that secondary markets are free and competitive.
“In the meantime, I encourage every NFL team – and every team in professional sports – to heed the call of all sports fans and remove price floors from every team-authorized secondary ticket market.”
The attorney-general in April fined several concert ticket resellers found to be using ticket bots $2.7 million and moved to introduce harsher penalties for future offenders.