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‘Business Was Never Easy, And Should Not Be’: Q’s With Detlef Kornett, CEO, DEAG
Pollstar speaks with Detlef Kornett, who took over operational management of DEAG from company founder Peter Schwenkow earlier this year, and is now gearing up for the two most important quarters of the year. Given his vast experience in the live events business, Kornett is the perfect man to speak to when trying to gage the health of the industry in a market that’s usually an important node in any tour coming through Europe.
We wanted to know about the main economic challenges in 2024, DEAG’s plan to maneuver through them, his team’s knack for finding, sometimes non-traditional events, that attract large numbers of visitors, ambitions to be recognized as a European company, and more.
Pollstar: How’s life and how’s business?
Detlef Kornett: Life’s pretty good, and business is growing despite the macro challenges we’re facing, which is very good.
What are the main challenges in your view?
There’s a bit of a reluctance of consumer spending across Europe. We do feel the pressures, cost of living, cost of services, cost of goods – those are affecting us as well.
Wherever new contracts, new service, and suppliers come in, you’re facing different economics compared to 2022 or 2023.
You’ve been writing and reading about the challenges of festivals and open airs in particular, there seems to be a market cleansing going on. It would be wrong to say that it doesn’t affect us, but it doesn’t affect us as much as the market in general. We have a number of outdoor brands, and they are doing well given the circumstances. Business was never easy, and should not be. It should be a challenge and fun, and I can still say that it is.
See: 60 UK Festivals Canceled in 2024
Talking about outdoor events for a bit: why is that segment of the trade particularly challenging right now?
There’s a number of things at play. We’ve been arguing, that the live entertainment sector is so strong, and has such great outlook, because we live in an experience economy. People are seeking experiences, and are willing to spend money on them. When you look at the outdoor and festival market in particular, I think all of us are challenged to actually deliver an experience. If the experience are roadblocks on the way to the festival; delays and long queues to get on site; sanitary areas offering only the bare necessities; warm beer, and cold food – we have to question whether that truly is the experience people are looking for. Whether looking at the indoor or the outdoor market, the expectations on anyone putting on an open air event have grown tremendously.
For many years, a festival was a stage, lights, sound, people coming to see different bands, and everyone having a good time. It’s not that simple anymore. Curating the right bill, bringing together the right bands is more challenging. It’s why a Wacken Open Air is indestructible, because it has a very singular, narrow focus, making it easier to deliver the ultimate mix of bands for its fans. If your festival defines itself by a variety of styles on stage, it’s going to get a lot harder.
Secondly, the top bands that could headline a festival may, for many reasons, decide they’re better off doing a solo tour, because they can show off their full show, and play to people in the audience, that came specifically for them. And the amount of stadium tours a lot of these top bands are doing had increased a lot, which has add-on effects on outdoor events.
Then you have the consumer, who buys later and later. One, because of the current costs of living. Two, because of the weather. It has become less a matter of if the weather will hit you, than when and how hard it will hit you. The consumer thinks, ‘if I buy later, I’ll have a better idea of what the weather is going to be like.’ That used to be different, too. The perception used to be, ‘I need to buy early to secure my place on the festival.’ It gave fans a feeling of comfort to already have their ticket secured. That’s changed, and that makes it more challenging for every festival producer to finance the entire operation.
And then, finally, if you manage to get through all of this, you come to the services, the costs of building a stage, getting the rigging and the lights up – all of which has increased tremendously.
It is the result of COVID making people leave our industry and move into different sectors. Some of them have come back, but some have not, resulting in the suppliers having a harder time securing the workforce they need to deliver the job. That results in cost increases, simple as that. That’s not even touching on trucking and fuel.
Calculating a festival has never been harder. With festivals, because you control more revenue streams, you used to be able to calculate more safely than on a tour. But that seems to be getting out of hand for all the above-mentioned reasons. In the UK, 60 festivals got called off this year.
What makes you optimistic for the future of the outdoor business?
Overall, there’s still great enthusiasm for outdoor open air events. On a consolidated basis, going forward, you will get more of a balance again, and have opportunities to create better results than in 2024 – if your brand is in the right place, has a reputation, delivers an experience, is well organized, and has the right bill on stage.
We got 30 plus festival brands. We had some successes, and we took some weather hits. We did very well in Scotland with the Edinburgh Castle concerts, with Summer Nights at the Bandstand, and we did very well with Belladrum Tartan Heart festival, where we improved the experience by making it easier to access the site. We can see from the onsales figures for next year that fans are giving us credit for that and are encouraged to come back. It is challenging, it’s a lot of work, nothing is a given, and we will see how that will affect the market in 2025, 2026.
EDM festivals, in particular, of which DEAG runs quite a few in Germany, must have especially high production costs?
Very much so. The electronic dance music community expects a whole world of experiences: multiple dance floors, decorations, swimming pools, saunas, you name it. It’s part of diving into a different world for a couple of days. Production costs for that are phenomenal, at the same time, if you get it right, if you’re in the right location, and you have a brand with an opportunity to create a loyal customer base, and you complement that with the right bill, you can make it work. Airbeat One is a great example. It has been around for more than 20 years, and has a loyal audience. The great weather we had this year also helped make it a memorable edition.
Another big one is Nature One, which has been around for almost 30 years now. This year we got washed out. We had 25 liters of rain [per mm] on the day of arrival. We had to turn people away because we couldn’t get them on site. 45,000 made it on site in the end, and they had brilliant time. It was still a success, but it would have been fantastic if the weather would have been great.
What is the reason the people are expecting a lot more from festivals and events in general these days?
We are in competition with Disney every day. Think about all of the amazing experiences that are provided at all times outside of music events. But even within the market, look at the development of major facilities, first The O2, London, now, Co-op Live in Manchester. Going to an indoor event is not like in the old days. I ran the London Arena in the Docklands. You walked into a former banana shed, and it felt at times like that. And it was great, because it was the place where you could see bands, and that was enough. Today, the consumer is much more picky. People truly have a choice, and they have to make decisions all the time: do I do this, or do I buy a ticket for that?
Moving on from festivals. What are other success stories you’d like to highlight?
We do more than 6,000 events, so it’s a bit unfair to pick from such a wide variety. Kili [KMJ Entertainment] does Joe Hisaishi, as well as Rick Wakeman, both of them sell a great amount tickets. But in-between that, we got new music, indie music, smaller bands, bigger bands, and all of those need focus, attention, and you shouldn’t just elevate some. However, I’m very much looking forward to Fontaines DC in Ireland, playing 3arena two sold-out nights in a row. That’s a huge development for the band, and for us as their promoter.
One of the examples in Germany is the tour of Böhse Onkelz, a big German rock band, who sell 300,000 tickets within two hours. We opened an exhibition in Berlin, Tim Burton’s Labyrinth, and even though it’s a hot summer, our numbers are good. We got queues outside the door, which has been really encouraging. It will run until November, and I’m confident it’ll be a big success for us. Family entertainment continues to grow, Monster Jam was a big success in the market, as was Disney on Ice. It’s a children’s show, but it does a big amount number of tickets.
Our friends in Denmark have created an original Abba tribute show 35 years ago. It’s the 50th anniversary for Abba this year, and we never had as many bookings internationally for the show as we have this year. It plays to the variety I mentioned earlier. Once in a while, one gets lost in the world of international rock, pop, and main acts, but there is so much more in the business that we care for, that we cater for, and that is very important to our mix of things. Spoken word has grown tremendously, we promote more than 500 spoken word events in the UK this year, and will have 200-plus events in Germany. We also tour in Europe, Yotam Ottolenghi will be in Italy, Spain, and other markets. We also do tours in Australia, and just recently started to do events in the U.S., where we will have Stanley Tucci at The Theater at MSG in October.
Any other German acts that are doing well?
We’re working with Lindemann, we stood by him through the crisis, which turned out to be a non-crisis and pre-judgment, and we’re touring not only in Germany, but also in Europe. So that’s a big name coming up, and we will have a number of midsize acts that are very important to us, but may be not known internationally. Riverdance is one example from the family entertainment segment that’s coming up, and we’re doing a trial run of War of the Worlds in Germany. We also have a very strong light trail business in Germany around the Christmas period, which is all set to grow come fall and winter.
The launch of District Live earlier this year suggest, that German rap is still a very popular genre in the country. Is that fair to say?
In terms of music consumption, meaning streaming, it is by far the most popular genre. Not all of that translates to live, but District Live wants to focus on those that do translate into live. It felt necessary to have a special brand within that segment, to work directly with the artist and offer something new.
As DEAG founder Peter Schwenkow once said, this company has always had a knack for finding events that sell tickets, from spoken word to EDM to Christmas Markets to concerts. How do you find these events?
It’s a philosophy that everyone who joins DEAG gets exposed to and, hopefully, soaks up. We have created an environment where the realization that a light trail may create as much business as an Iron Maiden tour concert can, makes the two promoters of these events equals. That atmosphere and philosophy has encouraged everyone to look out and say, ‘Spoken word? People like reading, people like to see personalities. They’re not promoted well, they don’t have much production value, that’s where Fane can get in, and add expertise. We may not be the best readers in the world, but we know how to promote. We know to create an event that delivers value to the audience.’
If you combine those two, all of sudden, there’s a very viable market segment that so far has been underserved. We currently have 22 offices. The hope is that out of each office something emerges, and we encourage interaction within the group. It’s one of the key points we communicate all the time. There’s lots of exchange, and open dialog. We try to support rather than compete with each other, and that results in great ideas coming to life. The majority of our businesses is still rock and pop concerts and festivals, and we continue to grow the segment in line with the market, some 3% to 5% per year. But the same people have all the skills to do Stanley Tucci in an arena, or a light trail, because these events need eyes and ears on the ground. You have to promote and produce them, egress, ingress, they need to be safe. We have all of that knowledge. It just needs to be applied. And those who join us have soaked up that philosophy, which has created the opportunity to grow the business overall, to continue to grow within our core of concerts, events and festivals, and at the same time build additional lines of business that help us weather the storm that is out there.
You’ve been doing this for quite a while. Has anything changed for you since you officially took over as CEO earlier this year? Or was that a mere formality?
On the one hand, we’ve been preparing for a long time, so, really, nothing has changed. On the other hand, everything has changed. The reason everything has changed is due to the market, due to challenges to the business that have not been there a year, two years, and five years ago. So, it’s a bit of both, and both aspects have been enjoyable: no change, but also a lot of change. DEAG’s business has a strong seasonality. Our strong quarters are the third and the fourth quarter, so you have to manage expectations. You now have to now deliver the third and fourth quarter, and at the end, as always, the fans have to buy the last remaining tickets in order to make everything work. So, there’s heightened expectations ahead of us. It almost feels like at the end of August, everything comes to life again.
What’s next for DEAG?
We will continue to grow, organically, but also inorganically. We made 22 acquisitions since 2019, and will continue to have news in that regard. Secondly, it’s important to note that we have expanded our reach. We now have an office in Spain. I mentioned Fontaines DC in a complex and difficult environment like Ireland, where we’ve made some strides to become an alternative in the marketplace. It’s a story of an expansion that happened during the COVID period, and needed the time to ramp up. And I actually feel very positive about that.
Exhibitions is a new segment for us that has done well and will continue to do well, The Arches and Elvis in London, or the Tim Burton exhibition in Berlin are cases in point. There will be additional news coming soon. DEAG has been put into this German corner in the past. But we make more revenue outside of Germany than inside. We are more European than ever. We’re clearly not Live Nation, I cannot say we’re pan-European yet, but we’re more European than ever, and I think that’s a very good and healthy development. We’ll take it from there.