‘The Expertise Of Our Team Is Our Biggest Asset’: Q’s With Detlef Kornett, CEO, DEAG

Deutsche Entertainment AG (DEAG) just released its 2024 earnings, which showed record revenues: €370 million ($420 million), a year-on-year sales increase of around 18 percent compared to 2023. It marks significant growth in what is a transformative year for the company – the first full business year with Detlef Kornett as sole CEO.

DEAG has been significantly expanding business in its core markets Germany and UK, but also in other European territories, including Italy, and Spain, over the past couple of years. Pollstar reached out to Kornett to talk about his first year since officially taking over from Peter Schwenkow; the state of play at DEAG; the challenges and opportunities he identifies, and more.

Pollstar: Being able to report record revenues in the first year since officially taking on the CEO role must feel quite satisfying?
Detlef Kornett: What is indeed satisfying is that we managed to transform and change the company while at the same time continuing to do business and reach a new record level of revenues.

Aside from you taking on the leading role within DEAG, what other transformations have been implemented at the company?
We strengthened the level right underneath the board, the executive vice presidents. We want to empower our people a lot more, and give them the tools to make an impact. I’m pretty big on team, and I want all team members to get the recognition they deserve. You cannot continue to grow and grow, and still have it all run through one person. That’s not how you’re going to be successful.

If you look at DEAG Group as a whole, what are the main drivers of this growth?
It’s a number of things. It’s important to note, that our core business – putting on concerts, events and festivals in music – have done very well, and have continued to grow. And in 2024 that growth was driven by smaller to medium-sized events. I think that’s a very good indication for the future, because there’s opportunity for some of these to become the next big thing. 70% of our business is music, tours, concerts, and festivals, and that core has grown.

Within non music, our segment spoken word & literary events has been our most important initiative, and one that has seen tremendous growth. I see that continuing for a number of years, at least, because we’re just on the verge of discovering the various fields of interest for people. We’re now doing Mika Häkkinen and David Coulthard. We’re doing a tour with Andy Murray. There’s a whole world of personalities and sports heroes that are of interest to people. Spoken word’s not just about the authors, although they’re doing great. I don’t know whether you follow the continental European book fairs, but they had record attendance from young people. There’s a bit of a revival of reading.

So, we’re in interesting times: within music, we have a revival of rock, hard rock, metal, all of that is really doing well. And we have a revival of reading, something that at times seemed like it had been written off. You may read on a Kindle rather than from a book, but reading has come back, and we cater to an audience that is growing. Spoken word has done so well, it helped us balance some issues we had with weather that caused festivals to not do so well, and so forth.

And it’s interesting that, like with rock music, it’s young people discovering books for the first time.
It’s very good news for the industry. I like to say that there is this one group of young adults that were 18 when the pandemic hit. They missed two very important years. They didn’t go to a festival, or spent nights out to see live music but are rather now cocooning at home. But the kids who were 15, 16 when the pandemic hit, you see them coming out now, to the secret concerts, and the one-off, specially curated club gigs. That’s all young kids. And, yes, rock has become a lot more cross-generational, even at Iron Maiden concerts, and that’s very healthy. Now we just need more young rock acts to emerge, even though I do see a number of bands coming up.

What is it that appeals to people about these spoken word events?
It’s a cool, intimate event. Those things are usually only 1,000 people, maybe even 500. David Coulthard sits there, and you feel close. You may even get a personal word in. They’re not reading from a book, or giving a speech from a prompter. It’s an interaction between the host and the audience, which makes it such a great experience. And these events will be closer to your hometown, as well. They’re not focused on capital cities. I think 80% of our events in the UK take place outside of London, that makes a big difference too.

You’ve increased group ticket sales by about a million tickets year-on-year. Driven by the above mentioned growth, I suppose?
Yes, in addition to sales generated in Spain and Italy, where we now have a presence. Our ticketing businesses in the UK and Germany, in particular, have grown significantly. We just have more tickets we can feed into that machine.

What exactly is the advantage of having your own ‘machine’?
It gives us an advantage, because we can do the best for the acts we’re working with. You have Ticketmaster and Eventim, and we work with them, too, they put our events on sale. But if there’s a big Live Nation tour, guess who gets the top advertising spot. With our ticketing engine, the event is always the most important event that day, and we time it in a way as to avoid conflicts and crossovers, and give every event some room to breathe. It really pays off, because we continue to build data. But the targeted approach shows, and it builds confidence with agents, managers and artists, that we can maybe do something for them that others won’t.

How many tickets to your events are sold through your channels nowadays?
Somewhere between 30% and 40%.

See: Lutz Grotehöfer Joins DEAG As Executive Vice President Operations

In what ways does investing in digitalization help run your business more effectively?
There’s more reasons to do it than just effectiveness. Most importantly, through digitalization, you can reach the target audience directly. We don’t have the classic media anymore to reach the target audience, like linear television and radio once did. It’s very difficult to target your audience on Spotify. So, our digitalization efforts to get in touch with the exact target group is very important to our success and further growth.

And, if you ask yourself, why there’s still all these posters out there. Funnily enough, the out of home advertising creates online activity. People see something outside, and the next time they have a moment, they’ll check it out further online. That’s why promoters are still doing the big billboards and everything else to create online activity. Last but not least, it’s about efficiency, it’s about saving time on settlements, exact invoices, getting them machine-generated rather than writing them yourself, etc.

Your latest earnings report mentions adjustments in reaction to the market shakeout. Does that mean you dropped certain events in some markets that just weren’t doing well anymore?
Yes, in the UK we dropped six or seven “Let’s Rock” events, mainly because the costs of putting on open-air events are so high. We had almost 10,000 people in Shrewsbury, and you still cannot make money of it. Everything from stage to band to security to bar staff has increased in cost, and with an offering that is kind of middle-of-the-road, it just doesn’t work. Therefore, we took the opportunity, not only in the UK, but also in Europe, to clear out some open-air, and festival events we had recurring every year. We’ll do less of them this year, but I believe we can be more successful with a more focused portfolio.

The whole festival world continues to be in turmoil. The scarcity of headliners is very obvious, and it’s interesting to observe changing consumer attitudes towards festivals. One category of festival that has continued to be really stable, is electronic music. Different artists, different stages, different styles come together to create a very good mix. It’s one reason, why electronic music events have continued to do really well. In Germany, we’re probably in a market-leading position. In terms of size, we have the number two and number three festivals, in addition to 12 more in the genre. Across the board, demand for these events hasn’t let up. They’re not easy to curate, but it’s worth putting in the effort.

You said in the beginning that your small and medium events, the level below arenas, are doing great and growing. How do you make those work?
It’s all about the execution. On a theater show, you cannot fail. You cannot overspend on anything, in order to make it work. And you have to have content that is attractive, that is not overplayed on every street corner, and so on and so forth. I think we do reasonably well on pulling exactly the right kinds of acts together for the right kind of people, and then we work feverishly against the cost of those events, and it usually turns out just about right. 2025 will be very different picture. This year, we, as a group, have a lot of bigger stadium acts, as well as arena shows. And we have good visibility on 26 already, and even 27 is already getting started, and not only for the big brand names: even mid-tier acts are already booking arenas, because otherwise they don’t get the dates.

Could we do with more arenas?
I think that is a fair point. There may not be enough cities with good arenas to host those events today

Any other trends that stand out about the coming year?
Variety. Chinese acts, Japanese pop, K-pop, Afrobeats – the variety gets bigger, and creates new opportunity within continental Europe. You have music from the Balkan or Eastern countries finding their audience, because of migration and such factors. These acts have their audience, and it works.

What are the key issues you have to be aware as a promoter to make sure the business remains as buoyant as it is right now?
It’s April. We still have to sell the remaining tickets. The promoter’s business is about the last 1,000 tickets you sell, not the first. Our biggest challenges is to pick our events carefully. There’s so much on offer within the same city at any given time, you have to be mindful of when and where you go in. The biggest challenge for the whole industry is not to oversupply. Secondly, the costs on all fronts remain the biggest challenge to our business. Thirdly, there is an interesting development taking place right now: the big agencies are getting away from the one-agent-one-artist relationship. They now put teams on one act, asking the promoter for more detailed marketing plans, a restructuring of the pricing, or the production rider, whatever it is. It creates more work on our side, so we actually had to add personnel, which goes straight against what I said about having to watch costs wherever we can. But, obviously, the agent-promoter relationship is the most important one, and we need to service them the best way we can.

To sum this up, it’s all about finding the right audience for the right event. There’s this entire world of events that create ticket demand below the blockbuster shows. The big acts seem to be just the tip of the iceberg, there’s a big chunk of amazing business below the water.
Exactly, and a good example for that is Newcastle. Newcastle stadium is difficult to produce and not easy to work in. But we focused on it early, because we felt there was an opportunity. This year, we’re doing three stadium concerts with Sam Fender in Newcastle, all of them are sold out. That requires expertise, and really understanding the market, which is the biggest asset within our Group, and one that we cherish.

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