Russia gives green light to drive-in shows
Russian promoters SAV Entertainment and Talent Concert International (TCI) have joined forces to launch a series of drive-in concerts at Moscow’s Luzhniki Stadium, bringing the show format to another market worldwide.
The Live & Drive series, which is to feature Russian rock, pop and rap artists including Mashina Vremeni, Diana Arbenina, The Hatters and Splean, kicked off on Saturday (18 July), with a 600-carpacity show by Russian rapper Basta.
Two types of tickets are sold for the events, with options for a two- or four-person car. Food and drink is available to order online to be delivered to the vehicle.
“The whole project is a big experience for us,” comments SAV Entertainment CEO Nadya Solovieva. “We are having to work in very limited time frames, and we didn’t have time to popularise this format.
“I’m sure that more and more people will appreciate this new form of entertainment in the near future”
“A lot of people still think that drive-in concerts are unable to replace “ordinary” ones in any way. But Basta’s show proves that drive-in concerts can be as successful and “live” as the ones that we’re used to.
“The atmosphere was fantastic, everyone really enjoyed it and I’m sure that more and more people will appreciate this new form of entertainment in the near future”.
Drive-in concerts have brought the live experience back to music-deprived fans across the world in recent months, with the format making its debut in Latin America earlier this month, in the form of a Move Concerts Puerto Rico-promoted show. A number of drive-in concerts are taking place Mexico in the coming weeks.
Drive-in shows have also offered fans some relief from lockdown in Germany, Denmark, the US, Lithuania and the Netherlands, among other markets.
Tickets for Live & Drive shows are available here.
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United in crisis: The view from Russia
Promoters in Russia view a fall in purchasing power and a reduction of disposable income as the main obstacles facing the reopening of the live business and have united with other sectors of the industry to form a new live entertainment industry association in an effort to safeguard their future.
In Russia, as in many markets worldwide, all concerts, tours and festivals have been officially banned for an indefinite period of time. Although many local summer festivals are still on sale, “nothing good is expected for summer 2020,” Sergey Podgorny, COO of majority CTS Eventim-owned promoter TCI, tells IQ. “It is obvious that large-scale events will be the last to return.”
Podgorny says TCI is “optimistic” about starting work again in September, but cautions that a “bad scenario”, which sees no live events for the remainder of the year, is a possibility.
Most of TCI’s local and international summer events – and even some autumn ones – have been postponed, with the company turning to “economy mode”, cutting costs amid a dearth of sales.
A similar tale is told by Maria Axenova, of Moscow-based promoter Melnitsa Concert Agency. The promoter is currently working to reschedule its July festivals, Moscow Park Live and Kiev UPark, which are set to feature acts including My Chemical Romance, Deftones, the Killers and Sum 41, to 2021, along with tours and stand-alone concerts.
“The most frustrating thing about this pandemic is that it is so very bloody unknown,” says Axenova. “What is clear, however, is that all live events are doomed at least before the fall.”
Sergey Babich of Colisium International Music Forum, which represents promoters in Russia, Ukraine, Kazakhstan and Belarus, agrees that events will most likely restart at the beginning of autumn in Russia, although this could differ across the country, as each region has the authority to select its own quarantine exit strategy.
“Both quarantine and the pandemic have revealed that we have a large industry, but we don’t have an authority that can negotiate with the government”
Of Colisium’s other represented markets, Kazakhstan offers the most cause for optimism, with venues planning to reopen in June and governmental support on offer such as tax breaks, rent holidays and unemployment benefits. Ticketing company Ticketon.kz is also allowing fans to buy tickets on credit, with the agreement of banks and credit card companies, in a bid to avoid complete stagnation of sales.
Elsewhere, Ukraine’s lockdown is due to be lifted on 10 May but, according to Dmytro Feliksov of Concert.Ua, events will restart no earlier than July.
“As for Belarus,” says Babich, “the situation is more difficult.” With no official event ban or lockdown enforcements, the government is simply recommending the public avoid “crowds”. The authoritarian nature of the Belarussian government has led to a general acceptance of the advice.
“No one ventures out to organised events,” says Babich. “There are a few sales for autumn, but there are a lot of doubts about summertime.”
As for promoters the world over, the issue of ticket refunds remains the “main problem” for TCI. In view of the current situation, the government has extended the grace period for issuing refunds from 30 days to 90.
So far, however, TCI has received few refund requests, as fans approach the situation with “stoicism”. “I want to believe that fans will be waiting for their artists,” says Podgorny. TCI is also working with ticketing partners to develop a strategy regarding refunds and compensation for fans.
Unlike in other European countries, the Russian government has not yet provided any direct financial assistance for different sectors. “At the very least, the industry is counting on a tax cut and a delay in ticket refunds of 12 months,” says Podgorny, adding that the government is expected to announce a new package of measures in May.
“We are bringing together those who were separate, and working together for the best future of the entire industry”
In order to gain more lobbying power with the government, Colisium and other members of Russia’s professional music industry have joined forces to create an official live music industry association. Promoters in Russia including SAV Entertainment, PMI and NCA were previously represented by the no longer operational promoters’ association Soyuz Concert.
“Both quarantine and the pandemic have revealed that we have a large industry, but we don’t have an authority that can negotiate with the government,” Vladimir Zubitsky of SAV Entertainment and Russian Show Center, said in an interview about the formation of the association.
“The Association will include all major players, all active people from the distant regions of Russia, and everyone involved in the industry: technical companies, producer centers, artist management, security, insurers.
“We are bringing together those who were separate, and working together for the best future of the entire industry.”
The 20-plus co-founders of the association are currently preparing documents for the registration process, and plan to begin in full force in the summer although, the founding group has been working together de-facto since mid-March.
The industry association is a welcome addition to Russia’s live community, as promoters predict a rocky road ahead.
“The market will not be able to recover for a year or so,” says Michael Shurygin, head of National Concert Agency (NCA). Shurygin believes that the impact of the pandemic will change even fundamental elements of the business.
“These [postponed] events have been transferred from the world of flourishing business to the world of recessions”
“Free online shows, possible new restrictions on attending live shows, decrease in peoples’ incomes – all these things will inevitably affect the customer and it is very likely there will be a drop of the show attendance in 2021,” says Shurygin.
The economic fallout from the coronavirus shutdown is a worry on the minds of all promoters IQ approached for this article. The commodity-sensitive ruble has been weakened by the collapse in oil prices in the past months, as global stay-at-home measures have led to a precipitous drop in demand.
“The drop of the ruble’s rate will greatly affect the local economy and possibly lead to higher costs (of everything),” says TCI’s Podgorny. “Combined with the collapse of many businesses affected by the epidemic and falling incomes this could be a serious problem for ticket sales.
“We will need to be more careful when choosing events and estimations for the upcoming concert seasons.”
Caution and uncertainty surrounding future shows is also affecting the deals that are currently being re-negotiated between agents and promoters for postponed events.
“All these events have been transferred from the world of flourishing business to the world of recessions, falling incomes, increased expenses and losses from 2020. So, such “re-negotiating” will not exactly be easy,” says Podgorny.
For Axenova, the “colossal fall” of consumers’ spending capacity is the main issue, especially that of the youth – “the very bulwark of our industry”.
“We all look forward to the return of a live dialogue between the artist and the audience”
“With so many businesses collapsing, we cannot expect a prompt bounce back of the market,” adds Axenova. In the meantime, Melnitsa is working on new online projects to generate financial assistance for artists and provide emotional support for fans.
Colisium’s Babich also sees the value of regular online activities to bring “additional monetisation” to the industry and for charitable purposes.
“We are very proud that online projects exist in our countries to support the medical sector, for example online concerts with donation systems in Russia, Belarus and Ukraine. All money collected from these concerts goes straight to support doctors.”
Online events are being supported by the largest media outlets in Russia, such as Yandex, Rambler, Mail.ru, Vkontakte, Odnoklassniki and MTS Mobile, with the opportunity for virtual reality (VR) and 360° video.
Although such virtual experiences offer a welcome respite from the tedium of lockdown life for many, the Russian live industry is raring to get back to the real thing.
“All online efforts are a good temporary substitute, but they definitely not replace a real live show, as a soccer game on TV will not replace a real vibe of a full stadium,” says Podgorny.
“We all look forward to the return of a live dialogue between the artist and the audience.”
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Market report: From Russia with live
Global election meddling, Novichok, Syria, Ukraine, London house prices – it’s not hard to find things to blame “the Russians” for. Then again, as Juha ‘Richie’ Mattila, veteran Finnish promoter and frequent Russian tourer points out, how would the rest of us like to be judged for the sins of our leaders and our oligarchs?
“We shouldn’t tour Russia because of Putin? Yeah, well, everybody should quit touring the USA then,” he hoots. “It’s [like] the old saying: don’t judge a book by its cover.”
Russia’s renewed role as the villain of international politics is so entrenched in the western narrative that it’s easy to forget there’s a real country under there – unimaginably huge, rich in culture and with plenty of good guys.
“You need to remember, Russia is part of Europe, even if politically it’s a little different,” says Mattila.
The international sanctions in place since Russia annexed the Crimea nearly six years ago have put a drag on the economy, destabilised the ruble and, from a live perspective, punctured the growth of cities other than St Petersburg and Moscow.
There was a period, not long after the beginning of the sanctions, when the prospect of seeing international acts in even Russia’s wealthiest two cities seemed in doubt. “Moscow Can’t Afford Foreign Performers,” read a 2015 headline in English-language newspaper The Moscow Times, citing a 95% fall in shows by western acts due to unaffordable fees.
“We shouldn’t tour Russia because of Putin? Yeah, well, everybody should quit touring the USA then”
In Moscow and St Petersburg, the market has bounced back – if not all the way, then enough that the relatively lighter schedule of international shows has sharpened demand for what tickets there are.
“It’s an interesting tendency in Russia lately,” says Ed Ratnikov of leading promoter Talent Concert International (TCI), which in October sold a 51% share to CTS Eventim.
“The market is going down due to sanctions and government politics, and people’s income is not getting any better but the business is growing.”
In the absence of a full complement of international stars, Russian acts including Basta, Max Korzh and Zemfira have graduated to stadium status. Leningrad, formed in the 1990s in St Petersburg, the city formerly of that name, made Russian music history this summer with a stadium tour, playing Kaliningrad, Moscow and Nizhny Novgorod in June, amidst a series of dates in arenas. Hot local pop stars include Zivert, Artik & Asti, Cream Soda and Shortparis.
“We have a new generation of kids who were born and live in the digital era,” says Ratnikov. “They have their headphones on 24 hours a day, they share tunes fast and make unknown artists well known in hours. Those kids are the majority of our ticket buyers now and are eager for quality entertainment.”
Russia’s instinct, where international music was concerned, was always to go big, and its early outdoor spectaculars – the 1989 Moscow Music Peace Festival at Luzhniki Stadium (featuring Bon Jovi, Ozzy and Scorpions), 1991’s Monsters of Rock at Tushino Airfield (Metallica, AC/DC et al), The Prodigy in Manezh Square in 1997, Chili Peppers and McCartney in Red Square in 1999 and 2003 – live long in the memory.
“The market is going down due to sanctions and government politics, and people’s income is not getting any better but the business is growing”
In spite of ups and downs, that pattern of serial one-offs has given way to a steady, professional business in the past decade or so. The most seasoned Russian promoters now have three decades of experience to draw upon, and the main cities have taken big steps too.
“Russian infrastructure has improved significantly,” says Ratnikov. “We have new airports, world-standard sports arenas and stadiums as well as recognisable hotel chains. Russia has improved very well during the last decade.”
Estimates of the size of the ticket market in Russia range from R45billion (£545m) to R60bn (£727m) per year [source: PwC]. Subject to more favourable economic and diplomatic conditions, there is still an enormous amount of room for growth. Moscow has a population of 12.4m, St Petersburg 5.4m, and in the comparatively dormant secondary markets there are 13 more cities of more than a million, led by Novosibirsk, Ekaterinburg and Nizhny Novgorod. Partly because prices are often out of reach for average incomes, concerts sit behind cinema and theatre in turnover terms. But an ever-growing contingent of promoters is working hard to shift the balance.
“The market is getting more and more competitive, while the incomes of Russians don’t tend to rise,” says SAV founder Nadia Solovieva. “But we are used to this economic reality –that’s the way things usually are here.”
As infamous art collective Pussy Riot can attest, politicians and the country’s legal system are not against interfering with the Russian music scene. Homemade hip-hop has come under fire for its poor moral character, and a spate of small shows were shut down last year in a crackdown on allegedly seditious youth music that affected artists including Siberian rapper Husky and teen band Frendzona.
Increasingly, big business is taking an interest in the Russian live sector
But increasingly, big business is taking an interest in the Russian live sector. European giant Eventim’s move into promoting follows its ownership of ticketing operation Parter.ru since 2006. However, in practice, the major corporate influence on the Russian live business comes from domestic tech, mobile and finance juggernauts, which have claimed entertainment tickets as a feature of their own wider online offering.
Russian Internet titan Yandex took its share of the e-ticketing market to an estimated 20% in the summer with the acquisition of TicketSteam. Yandex’s rival Mail.Ru Group invested in ticketing aggregator TIWO’s Moscow-based Ticketing Platform at the same sort of time, while Russian bank Tinkoff has held a 20% stake in concert ticketing market leader Kassir.ru since 2018, when mobile giant MTS also snapped up leading ticketers Ticketland and Ponominalu.
“It is about creating ecosystems and marketplaces,” Ticketland CEO Vitaly Vinogradov told the IQ International Ticketing Yearbook 2019.
The next step for Russia and elsewhere, believes Katerina Kirillova, co-founder of local blockchain distribution ventures Tickets Cloud and Crypto.Tickets, will be a shift to smart ticketing. When promoters and vendors can track and control tickets using blockchain technology, she suggests, data, marketing and anti-touting value will follow, while consumers are rewarded with secure tickets and music-driven social networking opportunities.
Existing tickets needn’t be threatened by the dawn of crypto, according to Kirillova, who adds that Tickets Cloud is in the process of securing its next funding round. “None of the traditional resellers wanted to integrate with us, because they considered us competitors, but now we have almost all the key resellers integrated as partners,” says Kirillova. “We don’t want to compete with them, but we want to provide the technology.”
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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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Live events, ticketing growth spell CTS Q3 success
German live entertainment powerhouse CTS Eventim has recorded strong financial results for the third quarter of 2019, driven by high performance in its ticketing and live entertainment sectors.
The company grew quarterly revenue by 20% from Q3 2018 to €378 million, with normalised EBITDA (earnings before interest, tax, depreciation and amortisation) increasing by 23% to €65.2m.
Live entertainment revenue grew by 22% to almost €277m and normalised EBITDA by 118% to €20.4m in a particularly strong Q3 performance. The ticketing segment also recorded substantial growth, with revenue rising 15% to €106.6m and EBITDA increasing 23% to €44.8m.
The Q3 results contribute to a successful 2019 to date for CTS Eventim, as group revenue in the year-to-date surpasses the €1 billion mark at €1.075m, a 17% increase from the first nine months of 2018.
The Q3 results contribute to a successful 2019 to date for CTS Eventim
Live entertainment revenue in 2019 is up 19% to €781.4m, with a 53% rise in normalised EBITDA to €57.8m. Ticketing revenue for the year grew 11% to €306.9m while EBITDA rose disproportionately by 17% to €119.2m.
The company expects unchanged growth in revenues and earnings for the fiscal year 2019.
It has been a busy year on the live entertainment side for Eventim, which created its pan-European promoter network Eventim Live in March. The company has since grown its portfolio with the addition of Russian promoter Talent Concert International, and is reportedly looking to add Austrian promoter Barracuda Music to its collection.
The German giant has also augmented its ticketing business recently, acquiring a minority stake in France Billet, the ticketing arm of Fnac Darty.
CTS Eventim takes control of Russian promoter TCI
Live entertainment powerhouse CTS Eventim has expanded into Russia, acquiring 51% of concert promoter Talent Concert International (TCI).
As previously announced at the International Live Music Conference (ILMC) in March, TCI will join the company’s pan-European promoter network Eventim Live. The transaction will be completed in the next few days.
The addition of the Russian promoter brings the total number of countries represented in the network to twelve. The network now comprises 28 promoters, who together organise more than 30 festivals and 5,000 live events each year.
“TCI complements our portfolio perfectly,” comments Eventim CEO Klaus-Peter Schulenberg. “The Russian market is very important to a growing number of internationally popular artists – and few companies bring as many acts from abroad to Russia as TCI. I am sure that our new colleagues will greatly enrich the work of our Eventim Live network of promoters.”
Founded in 1995 by Ed Ratnikov, TCI has organised live performances by Blur, Nick Cave, Deep Purple, Kraftwerk, Limp Bizkit, Motörhead, Rihanna, the Scorpions and Robbie Williams, among others, in its home market. This year, TCI has promoted show by artists including Jennifer Lopez, Rammstein and Whitesnake.
“CTS Eventim is the best possible partner for continuing TCI’s growth story long-term”
TCI founder and president Ratnikov and finance director Nikolay Sinitsyn will continue to serve as the promoter’s senior management, holding the remaining 49% of the company between them.
“CTS Eventim is the best possible partner for continuing TCI’s growth story long-term,” says Ratnikov. “Becoming part of a global player opens up additional opportunities for us and the entire Russian market.”
The TCI founder adds that it is “a great honour” to join Eventim Live, stating that, “we look forward to expanding our new partner’s portfolio with exciting shows, and its geographic reach all the way to the Pacific.”
For Eventim Live managing director Dr Frithjof Pils, the TCI acquisition “strengthens our market position in Europe”, opens up access to “many exciting acts that have long relied on the services of Ed Ratnikov and his team”, and offers Eventim Live promoters a “hassle-free way” to have their acts perform in Russia.
Eventim has owned Russian ticketing provider parter.ru since 2006. Parter this year handled the ticketing for Universiade, “one of the most complex sports projects in Russia”, according to the International Ticketing Yearbook 2019.
“A symbolic event”: Kraftwerk tickets sold on blockchain
Tickets for Kraftwerk’s upcoming show at the Kremlin will be sold on the blockchain, marking the first time the much-hyped distributed ledger technology has been utilised for a large headline show.
The German electronic music pioneers will play the concert hall (6,000-cap.) at the State Kremlin Palace (pictured) in Moscow on 13 February 2018. An agreement between promoter TCI and cloud-based ticketing platform Tickets Cloud will see fans given the option to buy a digital ticket, sold via the ethereum-based crypto.tickets blockchain platform, with admission to the show controlled by tearing a ‘stub’ stored on the user’s mobile device – eliminating the need to scan tickets.
“First, we had the paper ticket, then electronic, and now we are moving to crypto-tickets,” says Tickets Cloud/crypto.tickets founder Egor Egerev. “Kraftwerk became pioneers of an entire stratum of modern culture, and selling crypto-tickets to their concerts is a symbolic event.”
“First, we had the paper ticket, then electronic, and now we are moving to crypto-tickets”
Nikolay Sinitsin, TCI’s financial director, adds: “Technologies do not stand still, and the emergence of crypto-tickets solves the most pressing problems in the industry: counterfeits, fraud and scalping. TCI always tries to stay informed and is pleased to [embrace] new technologies that will help us and spectators feel safe and keep pace with the 21st century.”
Tickets start at ₽2,500 (US$42) and can be bought from kraftwerk2018.ru.
Following introductory features on blockchain by IQ and lawyer Joanna Morris, Tickets Cloud’s Katerina Kirillova recently explained how the technology is being used to combat some of the technical challenges associated with the modern live music business: