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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.”

 


Continue reading this feature in the digital edition of IQ 87, or subscribe to the magazine here

Putin to foot bill for touring artists?

Vladimir Putin is known for many things, but his love of music isn’t generally one of them. For this reason, reports that the Russian president has supported the idea of subsidising flights for touring musicians may come as a surprise.

Putin is believed to have agreed to offer cheap flights to Russian artists flying with national airline Aeroflot. The decision comes following a meeting in which Valery Gergiev, artistic director of St Petersburg’s Mariinsky Theatre, drew attention to the high cost of flights for artists.

The subsidies would significantly reduce the cost for touring musicians in the country. Air travel has become an “unbearable financial burden” for artists and the music industry, said Gergiev, according to local media.

Air travel has become an “unbearable financial burden” for artists and the music industry

The Russian president has taken a heightened interest in his country’s music industry of late. In December – amid a nationwide crackdown that saw forced cancellations and arrests of artists, in an evocation of Soviet-era censorship – Putin called for authorities to guide the direction of Russia’s burgeoning rap scene, which he said is “based on three pillars: sex, drugs and protest”.

“If it [rap music] is impossible to stop, then we must lead it and direct it,” the president told advisors in December.

It remains unclear whether the flight subsidies extend to rap artists and other popular musicians, or if they are solely reserved for classical tours. IQ has contacted the Kremlin for more information.

 


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Russian state must “lead and direct” rap music, says Putin

Amid growing censorship of Russian rap artists, Vladimir Putin has ordered advisers to devise a means of controlling hip-hop music.

Alarmed by the burgeoning popularity of rap among Russian youth, the president says the state must shape the direction of urban music in the country, while warning that an outright prohibition on rap performances could actually bolster the genre’s popularity.

“If it [the growth of rap music] is impossible to stop, then we must lead it and direct it,” he told cultural advisers on Saturday (15 December), according to AP.

Putin further noted that “rap is based on three pillars: sex, drugs and protest”, adding that his government is especially concerned with “drug propaganda”, which  “is a path to the degradation of the nation”.

“If it is impossible to stop, then we must lead it and direct it”

Putin’s intervention follows a crackdown by authorities on urban music in Russia, with various security agencies accused of pressuring artists and promoters to cancel planned hip-hop shows.

Husky, one of Russia’s most popular rappers, was this week jailed for 12 days for his impromptu, unsanctioned gig in the city of Krasnodar, which followed the cancellation of an official concert for alleged “extremism”.

According to AP, Husky climbed onto a car, surrounded by hundreds of fans, and chanted, “I will sing my music, the most honest music!”, before being taken away by police.

Other rappers forced to cancel shows in recent months include Gone Fludd and Allj, while authorities have also targeted punk bands such as Friendzona.

 


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Blavatnik, IMG’s Shustorovich drawn into Trump Russia probe

Two prominent entertainment business figures have been drawn into the ongoing investigation into alleged Russian interference in last year’s US presidential election.

Sir Len Blavatnik, whose Access Industries holding company owns Warner Music Group, and Alexander Shustorovich, the chief executive of performing arts agency IMG Artists, are reportedly under scrutiny from investigators led by special counsel Robert Mueller, who is overseeing a probe into the Trump presidential campaign’s alleged links with the Russian government.

According to the Dallas Morning News, political contributions by Sir Len – a Ukrainian-born American/British businessman who had previously donated to both parties – took a “hard right turn” in 2015–16, when he gave more than US$6m to Republican party political action committees (PACs).

Of that $6m, the paper says, the majority, $3.5m went to a PAC associated with Kentucky Republican senator and Senate majority leader Mitch McConnell, with smaller amounts donated to PACs backing senator Marco Rubio ($1.5m), Wisconsin governor Scott Walker ($1.1m) and Trump’s Inaugural Committee ($1m).

Len Blavatnik and Alexander Shustorovich are reportedly under scrutiny from investigators led by special counsel Robert Mueller

Shustorovich, a Russian-American business magnate with business interests in TV, radio and other media, similarly gave $1m to the Inaugural Committee, which was accepted by the Trump team – despite the rejection of a previous attempt to donate to the Republicans, in 2000, because of concerns over his ties to the Russian government.

Two other men, Andrew Intrater and Kukes – neither of which have any history of political donations – are also reportedly of interest to investigators. Both have been employees of Sir Len: Intrater is chief executive of Columbus Nova, a division of Renova, an investment company co-founded by Blavatnik and his business partner Viktor Vekselberg in 1990, while Kukes worked for Blavatnik and Vekselberg’s TNK from 1998 to 2003.

In addition to owning Warner Music, Access Industries is an investor in Spotify, Deezer and Songkick, the latter of which Warner partially acquired in July. Blavatnik was knighted in 2017 for his philanthropy.

Democratic representative Adam Schiff told ABC News he believes the contributions to be legal, as all donors are US citizens, “unless the contributions were directed by a foreigner”. He added, however, that they “could still be of interest to investigators examining allegations of Russian influence on the 2016 campaign. Obviously, if there were those that had associations with the Kremlin that were contributing, that would be of keen concern.”

 


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