Providence buys into music retailer Sweetwater
Providence Equity Partners, the private-equity owner of live entertainment firms including Superstruct Entertainment, Ambassador Theatre Group and Tait (Towers), has bought into Sweetwater, the leading US retailer of musical instruments and audio equipment.
Terms of the transaction, which sees funds advised by Provide make a “strategic investment” in Sweetwater, were not disclosed.
Founded in 1979 by Chuck Surack, Sweetwater now turns over more than US$1 billion annually and has served over 1.5 million unique customers. “I am incredibly proud of the growth our company achieved over the last year, which would not have been possible without the dedication of our employees and world-class team of music gear experts,” comments Surack (pictured). “I am confident this growth equity investment will allow us to reach new heights and further our mission of enabling customers to make music and pursue their dreams.”
Other music-industry investments by Providence include software firm Impact, the UK’s Brilliant Stages (via Tait) and, formerly, Greencopper parent company Patron Technology, which it sold last year. Its festival division, Superstruct, recently acquired Dutch event Zwarte Cross, in its first acquisition since before the pandemic.
“We believe the company is well-positioned for sustainable growth as live events return”
“Providence is a great partner to continue our momentum and take Sweetwater to the next level,” says John Hopkins, Sweetwater’s COO. “As the world emerges from the pandemic, we believe the firm’s strong track record of helping music-related businesses accelerate their growth will be invaluable.
“The Providence team appreciates what makes Sweetwater different and we are aligned on how we can further leverage our unique culture to capitalise on new opportunities that create even better customer experiences.”
Scott Marimow, managing director of Providence, comments: “Sweetwater’s status as an online industry leader is a direct result of its unique culture and dedication to customer service. We believe the company is well-positioned for sustainable growth as live events return and artists and entertainment companies look to provide the memorable experiences that have been absent over the past year and a half.
“We are excited to partner with such a culture-driven company and look forward to working with Chuck and team to grow the business together.”
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High-tech virtual reveal for historic UK venue
Theatre operator Ambassador Theatre Group (ATG) is set to unveil the £28 million restoration of historic north-east England venue, the Stockton Globe (+3,000-cap.).
The refurbishment of ATG’s flagship music and comedy arena, which is due to reopen in 2021, will be revealed at a digital industry showcase, taking place on 22 October.
The showcase will include an access-all-areas tour and presentations, as well as VR performances and filmed contributions revealing some of the music and comedy acts due to perform at the venue in 2021.
ATG has already revealed Paloma Faith as the first show on sale at the Stockton Globe, which is scheduled for 9 October 2021.
“When it became apparent that the restrictions imposed on us all ruled out a live event, we knew we had to do something different and incredibly special to reveal such a historic venue,” says general manager, Jo Ager.
“We cannot thank the artists enough for supporting us with their appearances and contributions to the virtual showcase, and this mirrors our dedication to wholeheartedly supporting every act to perform at Stockton Globe.
“We knew we had to do something different and incredibly special to reveal such a historic venue”
“This is the start of something really special; as we move forward, we will continue to focus on booking the best music, comedy and family performances in the business, and truly bringing the stars back to Stockton.”
Post-refurbishment, the venue will accommodate over 3,000 people in a flexible auditorium suited to standing and seated events. A smaller 250-capacity venue will open in the adjoining building.
The multi-million-pound refurbishment is funded by Stockton-on-Tees Borough Council and the National Lottery Heritage Fund.
Providence Equity Partners-backed ATG was appointed in May 2018 to operate the Globe on a 25-year management contract.
ATG runs close to 50 venues worldwide, including theatres in London’s West End and on Broadway, and aims to utilise its network to bring music and comedy talent back to the art deco venue for the first time in over 40 years.
Stockton Globe first opened in 1935, playing host to artists including the Beatles and the Rolling Stones, before closing in 1974.
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Patron Technology sold to PE firm Vector Capital
San Francisco-based private-equity firm Vector Capital has acquired Patron Technology, the company behind Greencopper, Marcato and several other familiar event technology products.
Vector, which specialises in investing in established technology businesses, says all Patron staff remain in place and will continue to operate the company on a day-to-day basis. Terms of the deal were not disclosed, but Vector manages nearly US$4 billion worth of investments.
“With Patron Technology, we saw an opportunity to back the leading platform and a seasoned management team as they successfully navigate unprecedented, Covid-induced market disruption in the live events industry,” comments Rob Amen, managing director of Vector Capital.
“Vector excels at investing during volatile times, and our thesis is that only the best products and most talented executives will survive this dislocation and emerge as market leaders. We are confident that our growth investment will enable Patron Technology to not only outlast this global pandemic but become stronger on the other side of it.”
Patron Technology, formerly known as PatronManager, has spent the past few years buying up various event technology companies, including app developers, ticket sellers and event management platforms. Its portfolio includes festival app company Greencopper, event management software developer Marcato, RFID provider Token and ticketing software firms ShowClix, Ticketleap, Ticketbooth and GrowTix.
“Vector excels at investing during volatile times”
The company was formerly majority owned by Providence Equity Partners (whose other live industry investments include Superstruct Entertainment, Tait Towers and Ambassador Theatre Group).
Marc Jenkins, CEO of Patron Technology, says: “This is an exciting and important day in our company’s history. It kicks off a fresh, new partnership alongside the thoughtful investment team at Vector. We are eager to work with them to propel the business through the age of social distancing and beyond.
“I’m extremely proud to be part of such an amazing team, past and present, that works tirelessly to serve our world-class clients.”
“With a great set of products, a strong balance sheet and an unparallelled management team, Patron Technology is well positioned to grow over the coming years,” adds Vector Capital vice-president Tom Smith.
“We look forward to partnering with Marc and his team as they continue to grow from this new position of strength and renewed investment.”
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Colosseum: Sziget unveils all-new immersive arena
Hungary’s Sziget Festival has revealed the Colosseum, a brand new, open-air electronic music arena, for 2020.
The Colosseum, featuring a 360° design, central stage and state-of-the-art sound and lighting, will play host to electronic artists including Honey Dijon, DJ Stingray, Chris Liebing, Dr Rubinstein, Gerd Janson and La Fleur.
Other acts announced for this year’s Sziget, which is taking place from 5 to 11 August, include Calvin harris, Dua Lipa, the Strokes, Lewis Capaldi, Major Lazer and Asap Rocky.
The Colosseum features a 360° design, central stage and state-of-the-art sound and lighting
One of Europe’s largest festivals, over 530,000 festivalgoers attended the seven-day long event in 2019, which saw headline performances from Ed Sheeran, Foo Fighters, Post Malone, Florence and the Machine, Martin Garrix, the 1975, Twenty One Pilots, the National and Macklemore.
In 2017, Sziget received backing from private equity firm Providence Equity Partners, becoming one of the first assets in the now-significant Superstruct portfolio.
Tickets for Sziget 2020 are available here, with a three-day tickets costing €209 (£183), a five-day pass priced at €279 (£244) and a seven-day ticket at €319 (£280).
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The decade in live: 2017
The start of a new year and, perhaps more significantly, a new decade is fast approaching – and while many may be thinking ahead to New Year’s Eve plans and well-meaning 2020 resolutions, IQ is casting its mind back to the most pivotal industry moments of the last ten years.
The memories of a turbulent 2016 were left far behind in 2017, as the concert business enjoyed a record-breaking twelve months, as the year’s gross revenue and number of tickets sold saw 2013 finally knocked off the top spot.
The success of the live business in 2017, however, was somewhat overshadowed by a number of devastating terror attacks, with the Manchester Arena bombing, the shootings at Route 91 Harvest and BPM Festival, the Reina nightclub shooting and other incidents targeting music fans.
In response to the tragedies, the live industry united and made a positive impact, in the form of the One Love Manchester and We are Manchester charity concerts and candlelit vigils and fundraising for victims of the Route 91 Harvest attack.
Elsewhere, the booking agency world continued to consolidate through 2017, with a number of acquisitions, mergers and partnerships while Live Nation welcomed several more promoters, festivals, ticketing agencies and venues to its fast-growing family.
2017 in numbers
The live music business reached new heights in 2017, with the top 100 tours worldwide generating a record US$5.65 billion, up almost 16% from the previous year.
The number of tickets sold throughout the year also saw a notable increase from the year before, climbing 10.4% to 66.8 million, at an average price of almost $4 more per ticket than in 2016, at $84.60.
Eleven tours surpassed the $100m mark in 2017, with U2 topping the year-end charts having generated $316m on their Joshua Tree tour. Guns N’ Roses narrowly missed out on $300m, grossing $292.5m on the Not in this Lifetime tour.
Coldplay came in next, as the band’s A Head Full of Dreams tour made $238m. Bruno Mars’ 24K Magic tour was also successful, grossing just over $200m, whereas Metallica’s WorldWired tour generated $152.8m.
Depeche Mode, Paul McCartney, Ed Sheeran, the Rolling Stones, Garth Brooks and Celine Dion were the other acts whose 2017 tour earnings exceeded $100m.
2017 in brief
January
A lone gunman attacks New Year’s revellers at the Reina nightclub in Istanbul, resulting in the death of 39 people and injuries to a further 70. Two weeks later, four are killed and 12 injured during a shooting at the BPM Festival in the coastal resort of Playa del Carmen, Mexico.
AM Only and The Windish Agency rebrand as Paradigm Talent Agency, signalling the next phase of their joint ventures, launched in 2012 and 2015, respectively.
Global asset management firm Providence Equity Partners acquires a 70% stake in Sziget Festival and reveals plans to launch eight to ten branded festivals, with James Barton, former president of electronic music for Live Nation, leading the international expansion.
AEG Live finalises negotiations to acquire New York-based promoter/venue operator The Bowery Presents.
February
Ticketbis, the multinational resale operation acquired by eBay in May 2016, is rebranded as StubHub, bringing to an end the Ticketbis name across Europe, Asia and Latin America.
Live Nation enters the Middle East’s biggest touring market with the acquisition of a majority stake in Bluestone Entertainment, one of Israel’s leading promoters.
March
Iron Maiden’s decision to use paperless tickets on the UK leg of The Book of Souls arena tour helps reduce the number of tickets appearing on secondary sites by more than 95%, according to promoter Live Nation.
Live Nation acquires a controlling stake in the UK’s Isle of Wight Festival.
The Australian leg of Adele’s Live 2017 tour makes concert history after playing to more than 600,000 people over eight stadium dates.
Sziget Festival 2017 © László Mudra/Rockstar Photographers
April
In the biggest primary deal so far for the world’s largest secondary ticketing site, StubHub is named the official ticket seller for Rock in Rio 2017.
Creative Artists Agency increases its investment in the Chinese market via a new alliance with private equity firm CMC Capital Partners.
May
Luxury Ja Rule-backed boutique event, Fyre Festival, descends into chaos on its first day, with visitors to the Bahamas site comparing conditions to a refugee camp.
22 people, including children, lose their lives after a suicide bombing at Manchester Arena, for which Islamic State terror claims responsibility. The attack targets people leaving the 21,000-cap. venue at the end of an Ariana Grande concert.
June
Pandora Media announces the sale of Ticketfly to Eventbrite. Despite purchasing the company for $450m less than two years ago, it sells for a package worth $200m.
AEG invests in Immortals, one of the world’s leading esports teams, with professional players in the North American League of Legends, Counter-Strike: Global Offensive, Super Smash Bros, Overwatch and Vainglory leagues. The team will now play their Los Angeles tournaments and matches at AEG’s LA Live entertainment district.
The organisers of ILMC announce the launch of the Event Safety and Security Summit (E3S), a one-day meeting focusing on security at live events.
The reality of Fyre Festival © Here_Comes_the_Kingz/Reddit
July
Helsinki-based Fullsteam Agency acquires Rähinä Live, whose roster includes some of Finland’s biggest hip-hop and pop artists.
Oak View Group, which counts Irving Azoff and Tim Leiweke among its founders, completes its acquisition of Pollstar, adding the US-based concert business magazine to its portfolio of trade titles.
August
Madison Square Garden Company makes a significant move into the esports sector by acquiring a controlling stake in Counter Logic Gaming.
Paradigm Talent Agency acquires Chicago- and California-based agency Monterey International, including its 14 agents and 200 acts.
Live Nation launches in Brazil with former Time for Fun (T4F) chief entertainment officer Alexandre Faria Fernandes at the helm.
September
Three quarters of staff at Function(x), the online business founded by former SFX Entertainment CEO Robert Sillerman, are effectively laid off, with the company telling investors it lacks the funds to pay them.
A sovereign wealth fund controlled by the government of Saudi Arabia, says it is forming a new SR10 billion ($2.7bn) investment vehicle in a bid to kick-start the kingdom’s entertainment sector.
Music returns to Manchester Arena as a capacity crowd turn out for We are Manchester, a benefit concert that raises funds for a memorial to the victims of the 22nd of May bombing.
The We are Manchester charity concert drew a full-capacity crowd at the 21,000-cap. arena © Showsec
October
A gunman kills 58 people and injures a further 546 at the Route 91 Harvest country music festival in Las Vegas. Local resident Stephen Paddock targeted the concertgoers from the 32nd floor of the nearby Mandalay Bay hotel.
WME-IMG rebrands as Endeavor, with company assets that include martial- arts promoter, UFC; ad agency, Droga5; Professional Bull Riders; the Miss Universe Organization; Frieze Art Fair; management companies, Dixon Talent and The Wall Group; and joint ventures such as Euroleague Basketball and esports championship ELEAGUE.
November
Ticketmaster confirms its long-rumoured expansion into Italy. The launch of Ticketmaster Italia, headquartered in Milan, follows the end of the exclusive long-term online partnership in Italy between Ticketmaster’s parent company, Live Nation, and CTS Eventim-owned TicketOne.
After 11 years in East London’s Victoria Park – now exclusive to AEG – Eat Your Own Ears’ Field Day Festival will head to Brockwell Park in South London. Live Nation’s Lovebox and Citadel are also rumoured to be moving to Brockwell Park.
Secondary ticketing websites will, from January 2018, be subject to stringent restrictions on their use of Google AdWords, as the search-engine giant cracks down on ticket resellers’ controversial use of its online advertising platform.
December
Leading self-service ticketer Eventbrite announces a series of new partnerships, rolling out integrations with events guide The List, festival package provider Festicket, word-of-mouth ticket sales platform Verve, and brand ambassador software Ticketrunner.
Michael Rapino, CEO of Live Nation Entertainment since 2010, will remain in his role until at least 2022 after signing a new five-year contract worth up to $9m per annum. Also re-upping are leading execs Kathy Willard, Michael Rowles and Joe Berchtold.
Primary Talent’s Dave Chumbley (1960-2017) picks up his Platinum Endurance Arthur Award at ILMC 25 © ILMC
Who we lost
Peter Rieger, founder of German promoter Peter Rieger Konzertagentur (PRK); Joseph Rascoff, business manager to the Stones, David Bowie, U2, Sting and more; ILMC’s long-time producer Alia Dann Swift; ShowSec International Ltd founder Mick Upton; Dave Chumbley, Primary Talent International director; Mary Cleary, former booker and tour manager; American singer-songwriter Tom Petty; pioneering concert promoter Shmuel Zemach, founder of Zemach Promotions; Australian country music promoter, agent and artist, Rob Potts; Linkin Park frontman Chester Bennington; Reading festival founder Harold Pendelton; Washington, DC, promoter Jack Boyle; Live Nation Belgium booker Marianne Dekimpe; rock and roll pioneer Chuck Berry.
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530k attend most headliner-focused Sziget yet
One of the biggest festivals in the world, 530,000 fans attended this year’s week-long Sziget festival, falling slightly shy of 2018’s record-breaking attendance.
The 27th edition of Providence Equity-backed Sziget took place from 7 to 13 August on Obuda island in Budapest, Hungary. Ed Sheeran, Foo Fighters, Post Malone, Florence and the Machine and Martin Garrix were among the more than 1,000 acts playing at the festival.
“The performances on Sziget’s main stage this year were outstanding in many ways,” says Sziget chief executive, Tamás Kádár. “We increased our funding for mainstream performers even more than last year as part of our ongoing growth strategy, bringing us nine headline acts for seven festival days.”
Hungary Today reported that organisers spent 500 million forints (US$1.7m) more this year on securing headliners, out of a total budget of more than 10 billion forints ($34m).
Two nights saw back-to-back headline performances, with Twenty One Pilots performing ahead of Foo Fighters on the closing day and a Saturday night combination of the National and Macklemore.
The first day of Sziget festival, headlined by Ed Sheeran, reportedly sold out with as many as 60,000 fans attending Sheeran’s show and 95,000 visitors on the festival site. Several fans complained about overcrowding and congestion on social media.
“The performances on Sziget’s main stage this year were outstanding in many ways”
Organisers told a Hungarian news outlet that “an unexpected, brief rainstorm” resulted in more fans leaving immediately after Sheeran’s performance than expected. “We decided to break up the crowd by only allowing visitors to leave intermittently from the festival area in order to avoid external congestion,” reads the statement.
Speaking of the extensive line-up of headliners, Kádár says that it was “a great pleasure for us to programme world stars who cover a wide, diverse fan base over different genres”, as well as “artists who fit in well with our [environmental] Love Revolution campaign messages, such as The 1975.”
Organisers celebrated Sziget festival’s most sustainable year to date, preventing the use of 1.5 million one-use plastic cups and 600,000 straws through a reusable cup system and “Don’t Suck” anti-straw campaign.
A new low-carbon dining block was introduced this year, providing attendees with sustainable food options.
Talks by Dr Jane Goodall of the United Nations (UN) peace envoy, the UN Refugee Agency’s Emitithal Mahmoud and former US vice president and climate change campaigner Al Gore also featured on the main stage.
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Providence’s Sónar allies with Paraíso
Advanced Music SL, the promoter of Barcelona’s Sónar festival, has acquired a stake in Paraíso Sonoro SL, the company behind fledgling Madrid electronic music event Paraíso.
According to Spanish promoters’ association APM, Sónar and Paraíso have “joined forces to develop content and create joint strategies”, though each company retains its independence and existing staff and management teams.
Paraíso will mark its second edition in Madrid on 14 and 15 June, with music courtesy of Chvrches, Charlotte Gainsbourg and Laurent Garnier and non-musical content that incorporates art, videogaming and gastronomy.
The 26th edition of Sónar Barcelona, meanwhile, runs from 17 to 20 July. Artists performing include Vince Staples, Underworld, Asap Rocky, Four Tet, Andy C and Disclosure (DJ set).
“This strategic alliance will be very positive for the development of Paraíso and its positioning”
In a joint statement, Paraíso organisers Jose Morán, Ana Sanabia and Nacho Santos say: “This strategic alliance will be very positive for the development of Paraíso and its positioning in the national and international market. We share something essential: the love of music and the way in which we understand this industry.”
“We are particularly pleased to work hand in hand with José Morán and his team, who we have known for 25 years,” add Advanced Music’s Enric Palau, Sergio Caballero, Ventura Barba and Ricard Robles. “Separately, we have created festivals that have become reference models. Now, together, we share a new and stimulating creative challenge.”
Since June 2018, Sónar has been majority owned by Providence Equity Partners, the parent company of Superstruct Entertainment, whose portfolio also includes Sziget, Øya Festival, Flow Festival, Elrow and, most recently, Down the Drain (Northside, Tinderbox) in Denmark and several UK events formerly owned by Global.
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Cashing in on live music: Meet the investors buying into the biz
The global live music industry has experienced a significant uptick in fortunes over the past decade. A switch in favour – from listening to recorded music at home, to physically attending the live event – has facilitated immense growth and profitability, driven by escalating ticket prices and the desirability to attend high-end live experiences.
This financial success has created a world of possibility for live music events, which are becoming more and more appealing to investors and fans alike. Thanks to consumer preference and industry adaptability, “the sector is growing more rapidly than the economy as a whole,” according to Lisa Boden, partner at Edition Capital, an investment company specialising in the entertainment and leisure industry.
“It is therefore an attractive space to invest into,” she adds.
Journalist and entertainment stock-market analyst Manfred Tari believes that while traditional industries are becoming saturated with investors, private-equity firms are speculating on different business sectors that have not previously been properly explored.
“The stock markets are not delivering the profit margins usually required by investors, so investors are looking into other industries to gain that 10% profit margin or more,” says Tari. “The live music industry is providing one of these different investment fields.”
Big money
Private-equity firms are pouring money into the live industry like never before, acquiring stakes in major talent- booking agencies, buying up popular festivals, and entering into partnerships with venue management companies.
“The live music sector is growing more rapidly than the economy as a whole”
“Whenever a deal takes place, it shows what kind of strategies are being used by investment companies,” explains Tari. “One particular deal that comes to mind is the merger between AEG facilities and SMG, backed by the huge private-equity company, Onex. This merger explains well what is going on in general – private-equity companies are looking for opportunities and just jumping in.”
The recently announced ASM Global merger could boast a portfolio of 310 arenas, stadia, convention centres and performing arts venues, if the deal is given the green light by monopoly watchdogs. The venue management colossus would span five continents and has been hailed by supporters as a “major step” for the live music industry.
Meanwhile, in the outdoor space, festivals are proving to be a highly lucrative aspect of the industry. Providence Equity Partners is the private-equity backer of Superstruct Entertainment, a festival owner and operator led by Creamfields founder James Barton. The company has acquired stakes in major European festivals, including Barcelona’s Sónar, Hungary’s Sziget, Norway’s Øya and Flow Festival in Finland.
Also tapping into the potential profitability of the festivals sector, Edition Capital serves as an example of one of the investment giants gambling on the continued popularity of the business. Investing in festival promoter Impresario Festivals was “one of the most prominent investments that we as a team made,” says Edition partner, Boden.
Through the Impresario Festivals investment, the company acquired a number of UK festival brands “with clearly unique audiences,” such as London’s Field Day, 80s-themed Rewind, and laidback surf festival, Boardmasters. “We sold that business in 2016, more than doubling the investors’ money,” Boden tells IQ.
Tari notes, “A main effect that we will see from these kinds of investments, like in the case of Superstruct and Waterland Private Equity, is that private-equity firms will now be looking to consolidate their place, investing in multiple similar companies and synchronising between them.”
“Private-equity firms will now be looking to consolidate their place, investing in multiple similar companies and synchronising between them”
In December 2018, Netherlands-based investment firm Waterland Private Equity acquired six leading Scandinavian promoters and agencies to create All Things Live, which it described as a “new independent market leader in Nordic live entertainment.” The company, comprising ICO Concerts and ICO Management; Friction and Atomic Soul Booking; Blixten & Co and Maloney Concerts, represents 140 Nordic artists and promotes almost 3,000 local and international events. All Things Live has a combined annual revenue of US$96 million, according to the company.
“Headliners coming to one event can now be supplied to many concerts across the private-equity firm’s portfolio. That is how these kinds of investments will change business structures,” observes Tari.
It’s all about the experience
Live shows and events have not always proved as financially fruitful. Indeed, recorded music dominated the industry as the chief generator of cash flow up until a decade ago, and according to collection society PRS for Music, the change in fortunes for live music in the UK occurred in 2008, with the United States following suit a few years later.
The origin of this movement of value from recorded content to live experience transcends the music business, extending to the wider entertainment industry and consumer habits in general. “People, particularly millennials and Generation Z, are spending increasing amounts of disposable income on doing things rather than owning things,” notes Boden.
This tendency to favour live experience over material possessions is commonly referred to as the experience economy, of which “the live entertainment sector is at the forefront,” says Boden.
That shift is proving enticing for large investment firms who can see that the live music industry is revelling in changing consumer preference, as leading festival and event promoters tap into the specific trends that accompany the era of the experience economy.
“People, particularly millennials and Generation Z, are spending increasing amounts of disposable income on doing things rather than owning things”
“The live experience – festivals and events – brings in a lot of other trends, such as personalisation, relevance and the availability of additional content to augment the experience,” says David Fisher, investment director at Edge Investments, a venture-capital company that specialises in creative industries finance.
Fisher explains that the businesses with most growth potential are those that “think about the experience economy and live events in a different way,” making a particular effort to target customers and personalise services.
“We are seeing this trend towards personalisation in every industry,” says Fisher. “Being able to understand the customer – what they’ve bought before, which kind of content they enjoy – is vital for offering the right solution to each customer’s requirements.”
In February 2019, Edge completed a $4.6 million investment in Festicket, a ticketing platform that packages together festival tickets, travel, accommodation and add-ons. “An attractive element of Festicket is that they get to know their customers,” Fisher tells IQ. “They identify a target, personalise their services and bring that target to specific customers, hence the ease of their tailored packaging, with festival tickets, accommodation and travel all in one place.”
Festicket sent 70 million emails last year, according to Fisher, “ensuring the development of a personal relationship with consumers.”
An individualised service and fresh outlook is a must for Boden, too. According to the Edition partner, the most attractive element for a potential investor is “an ability to attract and retain a loyal audience.” She adds, “Ultimately, the event needs to have a unique niche – it can’t just be another middle-of-the-road festival or event.”
“These investments mean that tickets will get a bit more expensive for fans and the entire industry set-up is going to change”
Indeed, the burgeoning international festival scene and the increasing willingness of festivalgoers to travel abroad is allowing further expansion of the festival market and offering ever more lucrative opportunities to investors.
Edition recently invested in Mainstage Festivals, a company that blurs the lines between music festivals and travel, offering festivalgoers a holiday as well as a live music experience. Last year, Mainstage launched Kala, the first international music festival to take place in Albania, receiving critical and public acclaim.
A bright future?
As long as the experience economy continues to thrive, the trend of external investors injecting funds into the live music industry shows no signs of slowing down.
The creativity and inventiveness of industry professionals, as well as swift technological advances, are enhancing the quality of live experiences, prolonging their impact and keeping both consumers and investors hooked.
Boden expects to see “increasing numbers of active firms and active funds” taking an interest in the sector in the short term. If larger players become involved in the future – a prospect that she deems likely – investors will gain more exit routes and the public will receive a greater size and diversity of offerings, she says.
Fisher is similarly optimistic: “Bringing investment into an industry is a good thing, as it means businesses can then invest themselves, leading to employment, growth and profit,” he says. “In the UK, the creative industries make up 10% of the GDP. It is important to get investment into such a large sector of our economy.”
These investments are providing attractive cash flows for many major festivals, agencies and venues, facilitating further expansion of the booming international live music industry and proving beneficial for all involved.
“Recipients of funding in the live events arena need to be able to provide that return, otherwise the money will dry up and go elsewhere”
However, the influx of investment may serve to change the live music industry in some less favourable ways, especially for concert attendees and festivalgoers.
“Firstly, these investments mean that tickets will get a bit more expensive for fans,” warns Tari. “Secondly, the entire industry set-up is going to change.”
In the past, the music industry received funding from impresarios or standalone investors who would work with artists and audiences on a more local, personal level. Nowadays, these kinds of investors are making way for huge corporate companies, dealing on a global level.
As a result, “agents now almost have the role of a product manager, so direct relations between the artists and the agent are less meaningful and the industry is becoming more corporatised in general,” says Tari.
Artists benefit from this, to a certain extent, due to the significant financial and professional advantages corporatisation brings. However, “fans are mostly not aware of these kinds of developments, and most have no idea that they are paying higher ticket prices for the benefit of investors,” Tari believes.
Furthermore, the sector cannot rely upon private-equity cash flows to boost the industry indefinitely. “Any sensible financial investor is investing for one reason: to make a return,” explains Fisher. “Recipients of funding in the live events arena need to be able to provide that return, otherwise the money will dry up and go elsewhere,” he says.
Tari echoes the sentiment. “These kinds of investors are looking for live events companies that already have a significant number of artists and a certain financial capacity – they aren’t concerned by the talent involved – it’s all about the financial potential.”
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Providence invests in partnership automation firm
Providence Strategic Growth (PSG), the growth equity affiliate of Providence Equity Partners, has led a US$75 million investment in Impact, a partnership automation platform used by Ticketmaster.
PSG forms part of asset management firm Providence, targeting investments in middle market software and technology-enabled service companies.
Providence’s flagship private equity firm, Providence Equity Partners, is the parent company of festival operator Superstruct Entertainment and event tech company Patron Technology.
Providence Equity Partners has recently invested in a host of live event-related businesses including concert touring infrastructure supplier Tait, venue operator Ambassador Theatre Group and sports marketing agency Learfield.
Impact automates discovery, recruitment, onboarding, engagement and optimisation across all types of partnerships and aims to become the “fastest-growing revenue channel” for participating organisations.
“Impact’s platform allows us to create and scale direct partnerships to drive new revenue more efficiently than in the past”
“Impact’s platform allows us to create and scale direct partnerships to drive new revenue more efficiently than in the past,” says Dan Armstrong, senior vice president and general manager of distributed commerce at Ticketmaster, one of Impact’s users.
“We’ve enabled discovery and purchase through unique partnerships with social media platforms, music streaming services and major publishers on a global scale. Impact helps us understand the value we create through these partners, allowing us to focus more of our time on innovation,” adds Armstrong.
“There’s been an explosion of innovation around new types of partnerships being forged to grow enterprise revenue,” comments Impact chief executive David Yovanno. “With support from PSG, Impact will be able to further evolve its integrated platform to empower businesses to grow their revenue effectively and efficiently.”
PSG’s marketing managing director, Marco Ferrari, says the company is “excited to invest in and partner with Impact as they grow and develop new technologies to automate, scale and optimise partnership programs for enterprises worldwide.”
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Ambassador Theatre Group makes live music moves
Theatre operator Ambassador Theatre Group (ATG) has announced a major move into live music venues, as it reopens historic north-east England venue, the Stockton Globe (+3,000-cap.).
The move signals ATG’s intention to strengthen its foothold in the live music and comedy industries, leading the expansion of the venue operator’s portfolio of music-focused venues.
Providence Equity Partners-backed ATG runs close to 50 venues worldwide, including theatres in London’s West End and on Broadway.
ATG aims to utilise its network to bring music and comedy talent back to Stockton Globe for the first time in over 40 years, as the art deco venue is due to open its doors again in 2020.
Stockton Globe first opened in 1935, playing host to artists including the Beatles and the Rolling Stones, before closing in 1974.
Post-refurbishment, the venue will accommodate over 3,000 people in a flexible auditorium suited to standing and seated events. A smaller 250-capacity venue will open in the adjoining building.
“We’ve been working with the council to tailor the Globe so that it is one of the best in the industry for hosting live music and comedy events”
“We’ve been working with the council to tailor the Globe so that it is one of the best in the industry for hosting live music and comedy events,” says Adam Kenwright, ATG group board director.
“With over a year to go before doors open, ATG are already in discussions with household music and comedy acts so that we can bring these stars to the Tees Valley community and back onto the Globe’s stage after having no live entertainment inside the venue for over 40 years,” adds Kenwright.
The opening of the Globe is expected to bring in £18 million annually to the local economy and will give Stockton the biggest live entertainment venue between Newcastle and Leeds. The venue’s refurbishment is funded by Stockton-on-Tees Borough Council and the National Lottery Heritage Fund.
For more information and to find out about memberships and ticket sales, join the Stockton Globe mailing list.
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