Live music faces up to a challenging 2012

With the organization and promotion of live events differing from country to country, comparisons of how one country’s live music sector is performing against another are not always easy to make. However, the live industry has, in recent years, seen the emergence of a small number of global players, such as Live Nation and CTS Eventim, and their financial details have provided an insight into current and possible future trends.

For 3Q11, Live Nation reported a fall in revenues for its concert business of 7.3%, to US$1.28 billion, from US$1.38 billion in the same period last year. The number of concerts promoted in North America increased from 3,801 to 4,135, while the number of concerts promoted abroad by the company’s international department remained almost unchanged, at 1,136. For the first nine months of this year, a slightly different picture was evident. Live Nation said the number of concerts in the US was up to 11,418, from 10,511 in the same period last year. But the number of concerts abroad dropped from 4,606 to 4,248.

Although Live Nation is the world’s biggest concert promoter, CTS Eventim is the biggest ticketing company in Europe. CTS Eventim also promotes concert and festivals, mainly in Germany and to a certain extent in Austria. For the first nine months of 2011, CTS Eventim’s live-entertainment sector suffered a sharp drop in revenues, falling 21.6% to €198.8 million, from €253.7 million in the same period of 2010. CTS Eventim said the decline was due to the lower number of attractive live events compared with last year and the deconsolidation of the FKP Scorpio Group. To avoid difficulties with the German cartel office, CTS Eventim lowered its stake in FKP Scorpio from 50.2% to 45% when it acquired the German branch of See Tickets.

The revenue decline in the concert divisions of both companies is an indication that the market for concerts is under pressure. Annual reports issued by a number of collection societies and concert associations back that position up. For example, PRS for Music reported a decline of 6.7% in live collections for last year, and Dutch promoters association VNPF reported a decline in revenues of 2%.

Touring schedules
Live-concert revenues have also been affected by changes in the touring schedules of big-name artists, and artist availability will become a bigger issue for the sector. The development of the concert markets in Eastern Europe, and to a certain extent Latin America and Asia, is partly to blame for world tours lasting considerably longer than in previous years. In the past, a big-name artist could complete a world tour in a year. But tours today can take up to two years to complete.

The European and US concert markets have seen big increases in fees for leading artists, and ticket prices have risen to cover these higher costs. However, these concert markets have also become fragmented, mirroring a rising demand for a number of music genres, such as metal and dance music. This increased interest in genre-specific live performance has been reflected by a rise in the number of festivals devoted to specific genres.

Headline acts remain the big draw for festival-goers, but festivals have also become especially important for midsize artists, who can now play a complete festival season in the summer, a season that until a few years ago had traditionally been quiet for touring artists. But despite the continued popularity, the festival sector is also coming under pressure. A number of notable festivals in Europe, such as Rock Am Ring in Germany and the Reading and Leeds festivals in the UK, experienced slowdowns in ticket sales this year compared with the 2010 events. Competition in the festival sector itself could be partly to blame. Recently, “boutique” festivals have become popular, and there has also been a significant increase in festival tourism. For example, events such as the Exit-Festival in Serbia, Sziget in Hungary and Benecassim in Spain have benefited from increased accessibility facilitated by low-cost airlines, such as EasyJet and Ryan Air.

Economic problems, particularly in Europe, will cause difficulties for promoters staging concerts by new artists because of fewer guarantees regarding ticket sales. However, the turmoil caused by the uncertainty in the eurozone is also already causing schedule changes for big-name acts. Metallica’s manager, Cliff Burnstein, revealed in an interview with The Wall Street Journal recently that festival dates for the band have been brought forward. Instead of playing festivals in 2013, the band will now appear at some festivals next year. Other big-name acts are expected to reschedule dates because of the crisis.

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