The Year In Europe: Facing The Big Unknown

The means at one’s disposal determine one’s ability to overcome economic hardship. As such, it’s no surprise that you’re getting different assessments of the state of business in Europe depending on with whom you speak.

Those who’ve managed to produce big tours and shows over the past year are mostly well-established promoters and artists who’ve already been doing great before the pandemic. Folkert Koopmans, CEO of FKP Scorpio, told Pollstar last month “the fact that we’ve enjoyed some very successful years before the pandemic, [made] it possible to amass the necessary funds to fall back on.” He also explained that the demand for culture was still somewhat dampened after the pandemic, especially noticeable for smaller and middle-sized concerts. And with “energy prices skyrocketing at an unprecedented rate, all products and services are getting more expensive. Global inflation is soaring, resulting in less demand, and rising production costs,” he said—and which perfectly sums up the situation in the European biz.

According to Koopmans, some production costs increased by 30%, which jives with what other promoters and talent buyers from Europe have told Pollstar. The UK’s Association of Independent Festivals noted increases between 25-35% in infrastructure costs across the board during the summer season. The country’s Music Venue Trust found that member venues faced an average 316% rise in fuel bills. Rising fuel costs impact the entire supply chain. Trade body LIVE warned that the unfolding energy crisis may mark “the end of the UK’s live music scene as we know it.”

Add the over-saturation of the market this year, and “unless you’re in a certain few categories of artist, your live plans are likely to have been negatively affected by a downturn in sales, in one way or another,” Simon Jones, AEG Presents’ senior vice president of international touring, said. The saturation will resolve itself, once the postponed shows have been processed, but staff shortages, price hikes and reduced spending power are going to affect this industry for a long time.

In Germany, at a Nov. 24 meeting between event professionals and politicians, Cultural Minister Ehrhard Grundl said, “you can tell people are cutting back, after COVID has shaken the industry enough as it is. Rising inflation and the projected recession are having a profound impact on planning activities for major events.”

Prof. Jens Michow, outgoing president of Germany’s promoters association BDKV, said, “during the lockdowns, we all thought people’s hunger for culture would be so great, that every concert would sell out once the crisis was over. We were wrong. Wherever concerts are full, most of the tickets were already sold in 2019 – for prices calculated on that year’s cost basis.” The major success stories of this year almost worked against the wider business, said Michow: “The huge festivals of this summer with up to 120,000 attenders, made politicians and the media assume, business must run well again. But there are festival promoters, who lost a fortune on sold-out festivals and concerts.”

He said, that aside from the superstars most of the new shows announced during the pandemic and after weren’t even close to selling out. “Some people are afraid to catch the virus, others are observing how reliable concert announcements really are before buying tickets. And now we have the development of costs in general. If you’re confronted with double or even triple of what you paid before, the first place you start saving is your leisure spending.”

Europe’s biggest promoters are dealing well with the challenges, as many of Pollstar’s Year End Top 200 tours prove, including the biggest one in terms of ticket sales: Ed Sheeran’s “Mathematics” tour, a joint effort by the world’s best and brightest. Steve Tilley, Ed Sheeran’s UK promoter at Kilimanjaro Live, told Pollstar, “The pandemic wasn’t over when we actually went on sale, and yet the public responded in huge numbers.”

Kilimanjaro parent DEAG, CTS Eventim, Live Nation all outperformed the record year of 2019 in their Q3 results. John Reid, Live Nation’s president EMEA, recently summed it up, “The war’s driving up the cost of living, gas prices are up, but the banks are robust enough to weather to storm and at a consumer level we’re not feeling it. The good news is people are weathering it. They’re still buying tickets. In fact, they’re buying more tickets than we’ve ever sold. And there’s no price resistance. So, long it may continue.”