‘Large Can Become Even Larger’: The State Of Business In Germany

Pollstar reached out to a cross-section of Germany’s live entertainment professionals, to get an idea of how the German live entertainment market has been doing since last September. A clear picture emerged: While there is dense competition in the festival sector, most professionals still see room for the right event.

As far as concerts and tours go, people seem to enjoy them more than ever. All promoters, independent or not, grew or maintained their respective businesses compared to this point in time last year. In short: business is booming.

A few examples: the country’s promotion and ticketing powerhouse CTS Eventim is going from earnings record to earnings record, and reached a stock market valuation of $5,5 billion for the first time in company history in August. 

FKP Scorpio, a CTS Eventim subsidiary, celebrated a record weekend, June 21-23, when it promoted both its twin festivals Hurricane/Southside and Ed Sheeran’s two biggest concerts on the entire “Divide” tour, counting 580,000 guests in total, turning over close to €50 million, “undoubtedly the highest turnover in the history of FKP Scorpio,” according to CEO Folkert Koopmans. Hurricane and Southside both profited from stable weather conditions, which wasn’t the case in the years prior.

The same can be said for Germany’s flagship festivals Rock am Ring and Rock im Park, a co-promotion of Live Nation and MLK, which is also part of Eventim Live. Both events experienced miserable weather and even a terror warning between 2015 and 2017, leading to a loss in visitors in 2018. This year, both festivals sold more than 150,000 tickets together, thereby finding back to old strength. 

Andre Lieberberg, president and managing director of Live Nation GSA, said, “it’s been a tremendous year for LNGSA. We have had outstanding stadium tours with Metallica and Bon Jovi playing six, respectively five stadium/outdoor shows in GSA this summer, with over half-a-million tickets sold across the two sold-out tours alone! 

“Muse selling out Cologne stadium in June to a capacity crowd of 40,000 fans also added to a very successful outdoor season. International arena tours such as Slipknot, Tool, Ariana Grande, Backstreet Boys, The Eagles, and domestic acts such as Rea Garvey or The BossHoss where also among our biggest touring projects in 2019. Furthermore our 2019 festival season has been the best yet, with record attendances at Openair Frauenfeld (Switzerland), Wireless Germany as well as Rock am Ring & Rock im Park.”

German band Rammstein completely sold out some 800,000 tickets for the first leg of its European stadium tour 2019 in mere hours, earning ticket agency CTS Eventim a sales record in the process. Dates were added, and Rammstein ended up selling 1.25 million tickets for 31 shows across 17 countries, according to promoter MCT.

The majority of concerts took place in Germany, where only one artist even came close in terms of ticket sales for open air stadium shows: Andreas Gabalier, the Austrian Schlager sensation. Promoter Semmel Concerts, also part of Eventim Live, sold 350,000 tickets for eight concerts in stadiums across Germany, July 1-13. CEO Dieter Semmelmann said his business has remained stable on a high level compared to Sept. 2018: “The market is crowded; the intensity and capacity of tours is enormous. Still, it’s impressive to see the demand from the audience and high volume of ticket sales.”

No wonder CTS Eventim CEO Klaus-Peter Schulenberg is content: “Our Live Entertainment segment is en route to yet another record year, with big contributions from our promoters. We’ve had a solid festival season with Rock am Ring, Rock im Park, Hurricane, Southside and many others drawing larger audiences than the year before. Our touring business has been outstanding both from a business and an artistic standpoint. Ed Sheeran’s FKP Scorpio-promoted shows were a particularly impressive highlight for us. Making more than 100,000 fans happy at the same venue never looked easier – and Ed Sheeran did it twice on the same weekend! Being part of his record-breaking ‘Divide’ tour was a great pleasure for everybody involved.”

He added, “while Ed Sheeran demonstrated that large can become even larger, we’re also witnessing a renaissance of club concerts: So far in 2019, our web portals have been particularly successful in the ‘long tail’ – i.e. we’ve sold more tickets for a multitude of smaller events, for artists across all genres, and for events in a wide variety of locations.”

Peter Schwenkow, CEO of Deutsche Entertainment AG, said, “for DEAG and its subsidiaries the last 12 months have been the best in the course of the last 10 years. Therefore, I am more than satisfied with our current development and I am looking forward to the next steps we take.”

Schwenkow said he didn’t see any saturation at all: “Looking especially at our own festivals this year, we can record success in all European markets – ranging from Rock The Ring in Switzerland to record selling Belladrum Tartan Heart Festival in the UK and to Nature One in Germany which completely sold out for its 25th anniversary this summer.”

Ben Mitha, MD of Karsten Jahnke Konzertdirektion, one of Germany’s last truly independent promoters, said, “we managed to increase the number of shows we promoted in GSA from 1,000 (2017/2018) to 1,200 |2018/2019). While our local department mainly experienced an increase in smaller clubs shows in the range of 200 – 500 cap venues, our touring department especially experienced a growth in the midsize arena range with way more shows in the range of 3,000 to 5,000 capacity compared to the year before.” Overall, Karsten Jahnke’s touring department promoted 250 shows more than in the season before. 

Mitha said it felt like “the demand for major rock and pop festivals is going down, as many of the major festivals struggled to reach their targets this year and had to deal with sales that were way behind their expectations.  Therefore loads of the well curated midsize festivals in the 20,000 cap range seemed to have a very good year, so maybe there is a shift away from the big festivals to the smaller festivals.” 

Independent talent buyer for corporate events and cultural festivals Stefan Lohman confirmed: “The business is increasing.” From 3,000-capacity cultural festivals to a 60,000-capacity mega event he couldn’t talk about at press time, there is a lot of demand for talent, be it artists, DJs, keynote speakers, or the Berlin Show Orchestra, one of Lohman’s most in-demand clients. 

The live boom is felt by the production sector as well. Celine Kühnel, CEO of infrastructure powerhouse eps in Germany, said, “after a slower open-air summer in Europe 2018, the past year saw a significant boost in touring of international artists through Germany. Whereas the open-air activities of mayor national artists stayed on its high level from 2018 (Helene Fischer) to 2019 (Rammstein and Herbert Grönemeyer).”  

Kühnel explained how the dense competition in the festival business led to promoters taking more financial risks in terms of artists fees. 

The increasing ticket prices that come with it could lead to a problem in the long-run, according to Oliver Hoppe, MD of Wizard Promotions, a DEAG subsidiary: “For a healthy development of the touring market, it would be nice if the top-selling artists recognized their social and cultural responsibilities, which is also important for building artist careers, seeing that fans may soon no longer be able to afford tickets to club shows.” 

Hoppe added, that while his company was “doing better every year despite the changing market circumstances, we’re experiencing an over-saturation with club tours.”

Mitha said the saturation could be felt in the higher-capacity range, as well: “With more and more bands being out on the road we’re definitely facing a lack of venue avails in pretty much all cap sizes during the high touring periods in spring and fall. It seems to get tougher and tougher each year to get a decent routing together if you want to tour a band in these periods. Certain acts already hat to leave out key markets because we couldn’t fit them in the routing and it’s quite frustrating if you check avails and only get a hand full options in a certain venue for all of March 2020. This seems to get worse and worse every year.”

Venue operators confirm this. Jörg Klopfer, spokesman at in.Stuttgart Veranstaltungsgesellschaft, which operates the 15,500-cap Hanns-Martin-Schleyer-Halle and the 7,200-cap Porsche Arena, among others, said: “Demand for our venue duo in Stuttgart’s NeckarPark is very high, as proved by our bookings for the coming year.”

Michael Brill, CEO of D.Live, which operates venues with a capacity-range of 3,000 to 60,000 in Düsseldorf, said the compan’s turnover doubled within the last 12 months, fueled by a growth in shows across all venues. He said, Düsseldorf city-council decided to develop the site with a permanent permit for the future for up to 80,000 visitors. “We are confident that the process will be successfully concluded in the next year hoping to take first bookings for 2021,” Brill said.

Stefan Lehmkuhl is a member of the executive board and head of booking at Goodlive, the promoter of Lollapalooza Berlin, Melt and Splash, among other large-scale festivals in Germany. He told Pollstar that Goodlive has experienced a “very solid” business year without feeling any kind of saturation. “It depends on the concept and the product. If it all hits the demand and the zeitgeist at the right place at the right time, there is still some room for new formats. Touring wise new entertainment formats from podcast tours to comedy also become more and more relevant. So, quite the opposite of saturation in my view,”  he explained.

Lehmkuhl said that one way to counter the giants in this industry dictating the fees that artists can charge, was to build globally acting, but independently run businesses. Figuring out how, may be the biggest challenge for independent promoters at the moment. “In times of market consolidation, I think it’s also more important than ever to think strategically and understand the game,” he said, adding that “the industry has finally become a speculative market and there are some big dangers, but also potentials for culture and music involved.”

Live entertainment companies have become increasingly attractive to investors. DEAG went public in 1998 already, committing to a model of transparency previously unheard of in this business. In April this year, U.S. billionaire Michael Novogratz acquired a three percent stake in the company, which has been on an acquisition spree lately, buying new businesses and taking full control of others it previously owned stakes in.

CTS Eventim broke the billion-dollar revenue mark for the first time in 2017, and has been dynamically growing since, reaching the highest share price in company history in August. 

And then there’s Superstruct, the incredibly media-shy, Providence Equity backed investment company owned by former Live Nation exec James Barton. Superstruct has been investing in festivals worldwide for years, but only entered Germany in August 2019 – via an investment and partnership agreement with Next Events, which owns and operates Parookaville, one of Germany’s largest electronic music festivals. 

Not even two weeks later, Superstruct announced that it invested in Wacken Open Air promoter International Concert Service GmbH. Wacken just celebrated its 30th anniversary. Traditionally, tickets for the next year go on sale on the last day of the festival. This year, it took fans only 21 hours to snatch up all of the available 75,000 tickets for the 31th edition of Wacken, July 30-Aug. 1, 2020, conforming what Lehmkuhl said earlier: that events with the right concept need not fear losing ticket buyers anytime soon.

To make sure it stays that way, Semmelmann said it was important to continue to find innovative and emotional content that was produced on a high professional level. He is convinced that even niche content will sell if done well. 

Klopfer said, it was important to keep tickets to live shows affordable. 

For Lohmann, sustainability was the key factor: “Without climate friendly and sustainable events and tours, the industry will not use the full potential of growing the business,” he explained. Kühnel confirmed, that “showing eco-awareness will be a big part of the image of any event or producer, especially for winning a new and young audience.”

Mitha mentioned a potential rise in touring costs in case of a no-deal Brexit and the continued fight against secondary ticketing, which could both affect the growth potential of this business negatively. Lehmkuhl emphasized the need for experienced people that wanted to work in this business, and of which there weren’t enough at the moment. 

Said Prof. Schwenkow: “From my standpoint the most important pillars for a continuing growth are the following three fields of live entertainment: classical music, exhibitions and family entertainment. We’ve been pursuing the strategy to expend in these fields for a long time and we will continue to do so. ” 

Lieberberg said, offering a wide array of services for artists, across all relevant areas of the live music business was the key to future growth. “This goes beyond the traditional fields of operation for a promoter and is in line with Live Nations overall strategy. Brand Partnerships, content creation & production, optimized digital marketing strategies and new live-music platforms are only a few areas where we strive to offer our artists the best combination of creativity, security and strength,” he explained.

Schulenberg summed it up as follows: “The Live Entertainment industry of the future will be as exciting, joyful and creative as today. But behind the scenes, it will also be increasingly driven by professional, data-based, tailor-made solutions. Artists want to reach as many fans as possible with their live performances. And we have the tools at our disposal to help them do so. 

“With Eventim Live we not only transcend national borders, but support artists in data-driven tour planning and marketing campaigns, provide them with validated information about their audiences, ticket sales figures, and much more – all this in a one-stop shop. These services will help grow concert audiences and, in turn, our business.”