Live Music inteLLigence An ILMC Publication. Mar 2011, Issue 34
dare You enter iLMc 23?
ILMC meetings and events firm up
the art oF WarbY
Agent Russell Warby profiled
going to Market
Germany’s resilient live music business
Facing uP to Face vaLue
New options for distressed ticketing
euroPean arenas rePort 2011 Decline fails to dent optimism in arenas
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Dying or Simply Evolving?: Wayne Forte the ProMoters’ rights: JuLes Frutos A Plan of Action: David Messer rock in india: Farhad k Wadia
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European Arenas Report 2011
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Above: The grand opening of the Turk Telekom Arena (52,000-cap) in Istanbul in January
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It’s now four years since IQ published its first European Arenas Report as a response to the lack of available information for this vital sector of the live entertainment business. While the UK’s National Arenas Association (NAA) publishes data from its members, there’s still currently no equivalent on a pan-European basis, and so hopefully, these short studies prove of use to the wider industry. This year’s report polled 50 arenas in 16 countries, a similar number and geographical spread as previous reports. Because the participating arenas vary slightly between years, it’s impossible to draw direct comparisons between results in some cases, but such a near fit allows us to look at average figures and also compare qualitative results. Between them, the arenas account for over 30 million tickets annually and well over €1billion in ticket sales, let alone the additional revenue from food and beverage; merchandise; car parking; and extras, all income streams that arenas either own or share in. In order to gain as accurate information as possible, no individual figures have been quoted in this report, merely aggregated data published as one result. And finally, not all arenas have answered every question, so where necessary, we have illustrated the sample size of respondents. Right, with all that out of the way, let’s take a deep breath, and… Greg Parmley, Editor
Attendance 09/10 Total attendance (all shows) 2010: 31.77 million Total attendance (all shows) 2009: 33.96 million
6.9%
economic climate is having on the business. With figures from North America showing an industry-wide drop of 10% in 2010 (according to Pollstar), promoters are currently far less likely to gamble on a show that might have come good a few years back. At the arenas, while the dip in attendance is widely acknowledged, there’s also optimism overall. “It wasn’t a record breaking year but it was still a strong year, particularly when you look in comparison to what the economy’s been through,” says National Arenas Association chairman Phil Mead, who is MD of arenas at Birmingham’s NEC Group in the UK. “We had 260 performances across both our arenas last year, 91 over the last quarter, compared to 95 in 2009. Overall, we can’t complain.”
“ The upcoming season, anyway, seems to be quite promising as big tours are on the road again.” A spokesperson for Mediolanum Forum and Pala Lottomatica in Italy concurs, saying: “We’ve been observing a slight fall in the attendance. This could be also due to an increase in ticket prices and the general economic crisis whose effects are still present. The upcoming season, anyway, seems to be quite promising as big tours are on the road again.” With 2011 outings from the likes of Kylie Minogue, Justin Beiber, Iron Maiden, Roger Waters, and Rihanna all scheduled across Europe, the signs are certainly positive. “We’re aiming for between 120 and 130 events next year,” says Peter van der Veer, general manager of The Ahoy in Rotterdam, which reopened in January following a €40million refurbishment. “It’s a difficult market at the moment, but we’re confident that our new world-class facilities will see us far beyond next year.”
Total attendance (music) 2010: 14.68 million Total attendance (music) 2009: 17.01 million
1,806 full-time 23%
15.9% (sample size: 46 arenas)
Attendance and Capacity whIle the results from 2008/2009 showed a flat year for music and a 6% increase for all other shows, the 2010 results show a downturn on both fronts. Close to a 7% drop across the board for all entertainment types, is relatively small compared to the 16% decline in music shows. The touring market is typically cyclical, and a quieter year than 2009 can explain part of this drop, but it can also be viewed as a sign of the effect the ongoing
5,973 part-time 77%
Staff Ratios (sample size: 47 arenas)
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“ If you can reduce the amount of multiple dates local artists perform because there are more seats, you can offer the promoters a better deal.– – Jan van Esbroeck, Antwerp Sportspaleis Of the arenas that reported an increase in attendance for music shows, many are in Eastern and Central Europe, including all the major Baltic arenas – Arēna Rīga, Saku Suurhall Arena (Tallinn) and Siemens Arena (Vilnius) – and Budapest Arena. But Brian Kabatznick, European VP of business development for AEG Facilities, points out that tertiary markets are still more exposed. “Some aren’t getting the number of shows or the level of corporate and sponsor support they used to and it’s reflective of the economic downturn,” he says. “It’s not the same as in London and Stockholm where if you lose 5% of your VIP boxes you can make it up.” One indicator that this year’s 7% dip is a temporary blip in a longer upward trend, is that the capacity of arenas keeps getting bigger. Average capacity increased again last year, from 14,657 to 14,876. It’s a 1.5% boost that comes after a 2.5% growth in 2009 and a 2% increase in 2008. In addition to The Ahoy, which added 3,500 seats when it reopened, and Jaguar Indoor Hall in Coventry (UK) that has been upped to 10,000, other major boosts include the Sportpaleis in Antwerp, which will undergo a €25m refurbishment over three summers, beginning in June. In addition to a new balcony and
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completely rebuilt interior, the capacity of the 78-yearold building will increase from 18,400 to 23,000. “We have the biggest shows in Belgium and they usually sell out, and we have a lot of national artists and local events which play multiple dates,” says Jan van Esbroeck. “If you can reduce the amount of multiple dates local artists perform because there are more seats, you can offer the promoters a better deal.” In Germany, the Westfalenhallen in Dortmund is increasing its capacity by removing the cycle track on its ground floor over two summers, a move that will add 1,000 extras seats to its current limit of 14,000 at a cost of approximately €800,000. And both Odyssey Arena in Belfast, and Palais Omnisport de Paris Bercy are among those looking to increase their capacity in forthcoming renovation plans. Sitting close to the average, the figures won’t be skewed too much by the new 14,000-capacity MCH Multiarena in Herning, Denmark, which opened in October last year. Although for sound quality, it may well raise expectations after Live Nation Denmark head Flemming Schmidt described it as the “best sounding” arena he has ever visited. However, as much as those extra few seats can yield that extra promoter profit to make a venue attractive, so to are arenas continuing to become increasingly flexible through draping systems or smaller rooms on site. This year the O2 Arena in Prague will complete the 4,000-capacity venue it’s building adjacent to the main arena; while the Palacio Vistalegre in Madrid opened The Box, a 3,000-cap venue inside the main arena complex, in November last year at a cost of €300,000.
Above: Artist’s impression of the revamped Antwerp Sportspaleis
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51-75% 5
76-100% 1
0-10% of sales 13 arenas 26-50% 5
11-25% 8
Proportion of ticket sales via in-house box office
Ticket Price the overall dIp In attendance Is not reflected in average ticket prices, which have risen consistently since IQ began collecting data. However, the rate of increase for music tickets appears to have slowed over the last three years, from 12% in 2008, to 5% in 2009 and just 2% last year. As the economic climate continues to make consumers more sensitive to pricing, perhaps the rapid increases of a few years ago have now been tempered. The same cannot be said for non-music events, however, which after remaining flat in 2008/2009 have risen 16% to €32.41. This perhaps reflects the widening breadth of entertainment on offer in arenas that carry a range of price tags.
In addition to ticket price, this year we also asked arenas whether they had box office facilities, and if so, what proportion of tickets they were selling through them. Of the 44 arenas that responded, 74% had box offices, with an average of 24.8% of all event tickets sold through them. Even with rough calculations, using the average ticket price for all reported attendance (€1.19bn) and assuming a booking fee of 10%, that’s an additional €30m spread across our participating venues. Of particular note here is the NEC box office, which rebranded as Ticket Factory in October 2007 and has made significant inroads into becoming a national agency this year, winning several high profile contracts and taking over the ticketing for promoters 3A Entertainment (Kylie, Eric Clapton, The X Factor). “Three years ago we were selling about 1 million tickets annually, but we’re now closer to 3 million,” says Mead.
Ticket Prices 08/09 Average ticket price (music) 2010: €43.33 Average ticket price (music) 2009: €42.54
2% Average ticket price (non-music) 2010: €32.41 Average ticket price (non-music) 2009: €27.06
16.6% (sample size: 42 arenas)
Above: Die Fantastischen Vier at O2 World in November
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VIP and Sponsorship when the o2 opened In london in June 2007, brand partnerships and VIP hospitality were concepts in relative infancy across the business. Overnight The O2 forced the sector to up its game, and many arenas have been playing catch up ever since. Of our polled venues, 24% still offered no VIP area or suites, although many are increasing or adding to the menu. Pavilhão Atlântico in Lisbon is building a new VIP lounge, and a “new social area designed to provide a unique experience of leisure and comfort to the public,” according to spokesperson Alexandre Barbosa. “It is also an improvement to the conditions offered to the box owners who now benefit from a common area.”
Madrid is upgrading VIP areas, and O2 World Hamburg is refurbishing its 24 sky boxes and building a new VIP entrance and lounge. Meanwhile, AEG Facilities’ knowledge of VIP areas and brand partnerships has been key in them growing from one European site to 18 (owned, managed or consulted on) in just over three years. In 2010, AEG announced fresh relationships with the new Scottish National Arena, Bercy in Paris, and last month it added Ülker Arena in Turkey, a new 12,500-capacity build opening later this year, to the portfolio. AEG’s formula is based around four major income streams. “Each market is different but the true economic health of an arena is four important factors – naming rights, sponsorship, premium seating, and food and beverage. The rental income is a comparatively low amount,” says Kabatznick, who adds that VIP options are evolving with the market. “You’ll see a unique set of premium seating options, where it’s not just a 16-seat box, but other choices that give the consumer more flexibility when it comes to premium seating. At The O2, we have a club seat programme where people can buy one or multiple seats in a club seat section, as well as VIP boxes which range from 16 to 30 seats. Berlin has club seats, suite tickets and party boxes, so it’s different at each arena but there must be a wider range of options.”
“ Each market is different but the true economic health of an arena is four important factors – naming rights, sponsorship, premium seating, and food and beverage.” – Brian Kabatznick, AEG Facilities
Tallinn’s Saku Suurhall is opening an additional VIP lounge to complement the 55-capacity sky box complete with sauna already in place; and Siemens Arena is improving existing VIP areas, adding additional VIP parking and implementing a new mobile phone system to take orders in boxes. König Pilsener Arena say VIP upgrades are being prepared, Palacio Vistalegre in
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The naming rights income that Kabatznick mentions has continued to move apace over the last 12 months, with several existing arenas now sporting the colours and name of their new partner. Color Line Arena became O2 World Hamburg, doubling the number of O2 arenas in Germany; Live Nation-owned Sheffield Arena became Motorpoint Arena after striking a five-year, “seven-figure” deal with the car supermarket giant; and Nottingham’s Trent FM Arena in the UK became the Capital FM Arena Nottingham, after sponsors Global Radio scrapped several radio stations. But Kabatznick says that sponsorship is moving far beyond “just signage.” “We’ve created active, unique engagements with our sponsors,” he says. “At The O2, Sky invested in a backstage bar because they wanted to highlight HD and 3D TV. Nissan, which just built the Innovation Station, wanted to talk about their new technology; and hybrid and fuel efficient cars. These are far more dynamic relationships.”
Left: Scissor Sisters at The O2, London. Photo Matt Kent
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Other 9.6% Comedy 7.2%
Music 43.3%
Sport 24.2%
Venue Usage
Family 15.7%
Venue Usage the splIt between dIfferent entertaInment types has remained relatively unchanged over the last four years. Music accounts for 43% of all content, with sports the second most popular at 24%, then family entertainment (16%). The only type of content to have changed significantly is comedy, which has more than doubled in two years from 3% to 7.2%. “Comedy has been growing
year-on-year,” says Mead. “It wasn’t quite as big in 2010 but there was a fair amount out there and this year will be a huge comedy year – we’ve got ten nights with Peter Kay and five with Lee Evans and they’re all sold out already.” But while it’s growing, comedy is still just one ingredient, and increasingly arenas need a dynamic menu on offer. “With a decreasing number of music acts touring at arena level, the arena market is attracting more and more family and entertainment events, and other events,” says Wembley Arena’s general manager John Drury. “While concerts will probably always bring in the best returns, thanks largely to ancillary sales from catering and merchandise, the sector can’t rely on this business and must continue to diversify as much as possible.” As the effects of the recession continued to bite, the NAA scheme to co-develop new shows (mentioned in last year’s report) failed to materialise and venues focused more on home ground. But Mead says that arenas are beginning to develop their own content, an example being LG Arena’s BRMB Live show in the UK, co promoted with a local radio station in November and featuring ten pop artists, which sold 11,000 tickets. “We will need to diversify more away from the reliance on concerts,” says Colin Revel at Metro Radio Arena. “We’re looking at our own promoters and own content development,” adds Kai Müller at O2 World Hamburg.
“It’s not just about offering smaller capacities but doing flexible deals that give promoters an opportunity to take a risk on something,” Mead says. It’s an idea that could offset other predicted changes in the market, such as those mentioned by Patrick Wiechert at Velodrom Berlin who predicts that, “bookings will be fixed more on short notice as the promoters wait longer till they trust in promotion set-ups and local impact of international artists.” Karin Mårtensson at Malmö Arena (which opened in November 2008 and is just 20 minutes from Copenhagen via the Öresund Bridge) also predicts further diversification in venue usage, including “More corporate events, more concerts for 3,000-5000 people and more TV shows.” And the relationship between the different spaces at arenas and the audience is also predicted to change. “We have to be more interactive with the audience,” says John Pagerup at Scandinavium in Gothenburg.
Business Factors sInce IQ began surveyIng european arenas, high artist fees and ticket prices have always come top of the list of concerns. This year, more arenas than ever pegged it as their primary concern, perhaps as the ongoing result of tightening budgets and consumer sensitivity to pricing. (“We expect production, security and energy costs to rise as well as artist fees,” says Stefan Pichler at Austria’s
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Salzburgarena.) The state of the economy was the second most popular concern after artist fees, followed by a lack of suitable headliners and competition from other venues. The competition question is an interesting one, especially with several new builds threatening to upset the status quo.
“ In the next three years, the landscape will have changed completely – the ticketing system, the promoters system, everything.” – Philippe Ventadour, EAA/Paris Bercy When it opens in Amsterdam later this year, the 15,600-capacity Ziggo Dome could prove a strong contender to The Ahoy, which has long been the principal arena in The Netherlands. And while nowhere near as developed a market, even Lithuania is getting a second arena, in the shape of Žalgiris Arena, a 15,160-capacity space that could well give Siemens Arena a run for its money. But multiple arenas jostling in the same catchment area is not always an issue, says Wembley Arena’s John Drury. “Thanks to the size of the market, London can, and does, sustain two major arenas,” he says. “Many events now regularly play both main London venues, which allows promoters to play more dates to more people in and around the capital, and gives the ticket buyer more choice.”
‘What are the first and second most important factors affecting your business?’
200 155
First most important factor Second most important factor
100
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Licen s legisl ing ation
Comp for ar etition tist to urs
In conso dustr y lidatio n
tion c osts Produ c
Comp eti othetrion from and vaenues renas
A lack
State econ of omy
Artist ticket fees/ price s
0
of sui ta head ble liners
5
Of the business factors question, one of the key differences this year was ‘market consolidation’, which although not one of the major concerns, saw more than twice as many responses as last year. European Arenas Association president Philippe Ventadour is also director general of the Bercy in Paris, which is embarking on an extensive €80m refurbishment. He says: “The market is moving fast in France, and Europe also. Many promoters are selling their company to bigger international companies. In the next three years, the landscape will have changed completely – the ticketing system, the promoters system, everything.”
Conclusion whIle the numbers mIght have dropped in 2010, it’s hard to find an arena – publicly, at least – that’s still anything other than cautiously optimistic. With the arena market now making up such a significant portion of the entertainment market, it’s a sector that has witnessed and responded swiftly to changing expectations from artists, promoters, sponsor partners and the audience in general. The range of content on offer continues to diversify, and with many sites now developing their own shows (albeit carefully, so as not to tread on any toes) the possibilities look set to increase still. With VIP choices widening; ticketing and the myriad options it brings adding extra figures to the bottom line; and involvement by brand partners charting new ground and in new ways, the arena business isn’t getting any easier. Likewise, with the customer experience now beginning long before the front door, and expectations of production standards and comfort higher than ever, there’s more to running a profitable site than ever. But then the success story of arenas over the last ten years (and even more so now) has been the ability and desire to innovate and stay ahead of the curve. And as long as this sentiment remains, the sector should continue to capture the hearts and wallets of many for years to come.
In the Pipeline Here’s a far from exhaustive selection of the innovations goings on at arenas across Europe… • König Pilsener Arena, Germany: New roofing of entrances and VIP areas. • National Indoor Arena (NIA), UK: Planning a major two-year renovation of the arena including naming rights deal. • O2 World Hamburg: Refurbishment of 24 sky boxes and new VIP entrance and lounge area. • Palacio Vistalegre, Spain: upgrading VIP areas, new rigging and access points. • Palais Omnisport de Paris Bercy, France: Shortly to begin a major €80million refurbishment, in partnership with AEG, that may also increase the capacity. • Pavilhão Atlântico, Portugal: New VIP lounge and comfortable public areas outside of the main arena. • Scandinavium, Sweden: Undergoing a feasibility study to either build a new arena by 2017 or renovate existing site. • SECC, UK: New 12,500-capacity arena under construction for completion by 2013. • Siemens Arena, Lithuania: Roof renovation, changing interior of restaurant and general renovation. • The O2, UK: Crew catering is changing, and developing more flexible configurations of VIP boxes. • Ülker Arena, Turkey: New 12,500-capacity arena opening later this year. • Wembley Arena, UK: Installing contactless payment points, and large external video screen. • Žalgiris Arena, Lithuania: New 15,160-capacity arena currently under construction. • Ziggo Dome, The Netherlands: New 15,600-capacity arena opening late 2011.
ParticiPating arenas AECC’s Press & Journal Arena (Aberdeen, UK), Ahoy Rotterdam (NL), Amsterdam ArenA (NL), Arena Leipzig (DE), Arena Riga (LV), Beogradska Arena (Belgrade, RS), Capital FM Arena Nottingham (UK), Cardiff International Arena (UK), Echo Arena Liverpool (UK), Főnix Hall (Debrecen, HU), GelreDome (Arnhem, NL), Hallenstadion (Zurich, CH), Hanns-Martin-Schleyer-Halle/PorscheArena (Stuttgart, DE), Hartwall Areena (Helsinki, FI), Heineken Music Hall (Amsterdam, NL), König Pilsener Arena (Oberhausen, DE), Kultur- und Kongresszentrum Jahrhunderthalle (Frankfurt, DE), Lanxess Arena (Cologne, DE), LG Arena (Birmingham, UK), MEN Arena (Manchester, UK), Malmö Arena
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(SE), Max-Schmeling-Halle (Berlin, DE), Metro Radio Arena (Newcastle, UK), Motorpoint Arena (Sheffield, UK), The NIA (Birmingham, UK), The O2 (London, UK), The O2 (Dublin, IE), O2 World (Berlin, DE), O2 World Hamburg (DE), Odyssey Arena (Belfast, IE), Palacio Vistalegre (Madrid, ES), Palais Omnisports de Paris Bercy (FR), Pavilhão Atlântico (Lisbon, PT), Rittal Arena Wetzlar (DE), Royal Albert Hall (London, UK), Saku Suurhall Arena (Tallinn, EE), Salzburgarena (Salzburg, AT), Scandinavium (Gothenburg, SE), Siemens Arena (Vilnius, LT), Sportpaleis Antwerpen (BE), TUI Arena (Hannover, DE), Velodrom (Berlin, DE), Wembley Arena (London, UK), Westfalenhallen (Dortmund, DE).