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Oak View Group CEO Tim Leiweke At Midem: ‘I Can’t Sing, I Can’t Play Guitar, But We Can Build Great Arenas’
Tim Leiweke, the CEO of Oak View Group (Pollstar‘s parent company), recently said in an interview with Music Business Worldwide that “there’s never been a better time to be a part of the music business.” During his MIDEM keynote, he left no doubt that he meant it.
Leading the talk was Natalia Nastaskin, head of U.S. music operations at United Talent Agency. She started off by asking Leiweke about his specific reasons for launching OVG just more than two years ago.
Gideon Gottfried – MIDEM 2018
Oak View Group CEO Tim Leiweke in conversation with UTA’s Natalia Nastaskin
“If you look at what Michael Rapino has done with Live Nation, he’s tripled the value of that asset in the less than 10 years. If you look at the live business in America, it did $10 billion last year. Fans spent more money on live music in North America last year than [on] going to movies, for the first time in the history of the country, of both Canada and the U.S.
“Thirty years ago, the largest tour in the world was Pink Floyd, and it did $27 million. Last year, there were more than 27 tours that did over $27 million. The industry is going to continue to grow, and it is going to continue to prosper. And our part in that is building great venues that allow the artists and the fans to experience the moment in a world-class venue with world-class acoustics, and maximize the revenue for the promoters.”
Given that the world’s Top 50 arenas are 25 years old on average, Leiweke sees an opportunity to think outside the box and build new, state-of-the-art arenas and theaters throughout the world.
When questioned about his vision for “the arena of the future,” he said that while he didn’t have as big a vision as [MSG CEO] Jim Dolan and MSG had for London and Las Vegas, OVG was investing between $600 million to $800 million in arenas in places like Seattle and New York to make sure they became “acoustically perfect.”
“The bowl is about the artist and the fan, and that direct connection. And so our job is to create the greatest environment and experience for the artist and the fan within the bowl. We’ll use technology in and around that experience,” Leiweke said.
Said technology could assist with pre-reserving parking space, being guided through the arena, making purchases without having to walk up to a counter, unlocking VIP experiences, and getting food and beverages in a much faster, easier manner. Leiweke envisions a day and time when drones will guide visitors on their last miles when approaching the arena.
Leiweke put North America’s $10 billion dollar 2017 live industry into perspective when pointing toward the estimated $8 billion secondary ticketing market, the revenues of which didn’t go to artists, agents, promoters, managers and buildings.
“We have to partner with the artists and promoters to recapture that $8 billion, by creating new venues, new VIP opportunities, new experiences that enhance what people are willing to pay for, so we can keep that $8 billion within the cycle, where it should be,” he explained.
This meant finding the balance between VIP and premium offerings without pricing one’s self out and ending up in a situation where no one could afford to go to concerts anymore. “People are willing to spend an enormous amount of money for the best seats and the best experience. The key is trying to get the artist comfortable that we can do that without them feeling that they are gauging people.”
Leiweke also took the time to explain the business model of OVG to the MIDEM audience. “The concept was initially taking the best arenas in North America and bringing them together, so we can book together, buy together, sell together, and think together.
“We have 28 arenas, that’s the most we can do. We have an agreement not to grow outside of that. We have about eight baseball stadiums where we book all the content during the summer months. We stay out of the promotion business. We have a great partnership with Live Nation, we don’t need to be in the promotion business.”
Leiweke said MIDEM was a great example of the merging of music distribution and the live side, as was the most recent Pollstar Live! conference, where Apple’s Eddy Cue was a keynote speaker at what was traditionally a live-only event.
“And here we are today, at a conference that was traditionally about the label and producer business, about the distribution of music, and now we’re beginning to integrate live. I believe the music business is going to be fully integrated going forward,” Leiweke said.
Speaking about his daughter Francesca Bodie, who is a partner in OVG, he said: “We need more great female leaders in the industry, and she’s certainly going to be one of them, and I’m proud of that. She’s probably a better leader than I am, so the sooner she takes over, the better off we’ll all be.”
He said that OVG would make eight new arena announcements in the next six months, “and, yes, some of them are going to take us outside of the footprint of North America. If you look at Europe, they’re in dire need of new arenas.”
Leiweke predicted that there was going to be a massive growth and expansion of live venues in places like Japan, China and Singapore.
“We haven’t even started to tap what I think is going to be the next great potential, [which is] the growth of South Africa and the ability to build world-class arenas there.”
He said OVG planned to invest almost $3 billion in the next few years on new arenas with the help of private-public partnerships, “where we do the majority of the financing.”
Leiweke expects OVG to operate worldwide in 2018: “We love Europe. One of my great thrills was building the O2 in London and the Mercedes-Benz-Arena in Berlin, and we’re not done. We have a vision, and a partnership, now, with Silver Lake, who have joined our ownership group, that gives us the capital and the equity to continue to think, to find these opportunities, and to continue to expand our vision.”
He pointed toward Sacramento, Calif., which completed the Golden 1 Center in 2016 and went from the 137th-largest music marketplace in the world to No. 38. “These new arenas will continue to help us build this business from, in North America, a $10 billion annual industry to what we think will be a $20 billion industry in the next five years.”
“I can’t sing, and I can’t play guitar, but we can build great arenas for the music industry.”
Leiweke also talked about streaming, of which he is a big fan. He was especially pleased that the format helped the labels turn the corner and grow their businesses again. “The labels, to me, are critical because they’re the ones out doing a lot of the heavy lifting.
“Streaming allows us to have a direct relationship between an artist and their fan. Streaming now allows us to expand that to live. The ability for someone to be listening to their favorite artist and suddenly hearing from their streaming service that their favorite artist is coming into their marketplace to play a live event, and they can buy their ticket through that particular service.
“Streaming is going to be a one-stop opportunity to have a 360 relationship with your favorite artist.”
One of OVG’s subsidiaries is Prevent Advisors, which was launched to deliver a safe and secure environment for customers, and Nastaskin questioned Leiweke on security, too. He said: “We must be able to look our fans and artists in the eyes and tell them that they’re going to be safe.
“Prevent Advisors goes out and thinks a lot about the bad things that could happen and then we make sure they don’t happen. Whether it’s facial recognition, whether it’s cameras, whether it’s bomb-sniffing dogs, this is going to be our world going into the feature, and it’s important that we do it. Because the one biggest threat to our industry as a whole, especially the live side, is if there continues to be acts of terrorism at live events.
“There’s a lot of bad people in the world. And what we need to do is make them understand: not here, not now, not ever.”
Check out the full MIDEM keynote below, if you want to find out about Leiweke’s first concert experience. He also shares an anecdote of when he first came to Canary Wharf, London, to take a look at the Millenium Dome, which is now the O2.