Levels of touring activity in the first half of the year have been robust, but with the festival market evincing signs of a slowdown and now the uncertainty of Brexit, could it be that the sector is on the verge of more challenging times? David Davies reports
The unsettling air of complete uncertainty and trepidation that descended upon the UK on the morning of 24 June — the day after a thin majority of the electorate decided to vote in favour of leaving the European Union — is difficult to describe with total clarity even from the vantage point of one month’s distance. At the time of writing, a new prime minister has been installed and a new cabinet taken shape — but the timetable and nature of the actual ‘Brexit’ process are still very much up in the air.
‘If there’s one thing that business doesn’t like it is uncertainty’ — or variations thereof — has been repeated so much over the last month as to become almost mantra-like. But of course it is true, and so perhaps inevitably this concern has been voiced in many of the interviews that fed into PSNLive’s latest overview of the current touring and festivals markets. Possible long-term drawbacks — and even the odd advantage — for the live industry were aired by multiple contributors, but until the roadmap is clear (turn off junction 50?), no one is really in a position to make confident predictions.
All of which is rather unfortunate given the fact that the UK and mainland European live business is generally felt to have had a strong first-half of the year. Bruce Springsteen, Beyonce and Coldplay have been among the acts keep things busy at the arena and stadium level, while Latitude, Reading and Roskilde were among the many festivals either at or approaching ‘sold-out’ level at the time of writing.
But even without Brexit, there had been some troubling signs that the long-term future of the sector might not be quite so rosy as it seemed a few years back. In June, new research from ParcelHero revealed a picture of precarious finances at festivals, with a prediction that as many as 1 in 10 might not reappear in 2017. In addition — and there is no easy way to put this — the remarkable number of rock-related deaths during the first half of the year has raised further questions about the current reliance in some quarters on the ability of ‘heritage acts’ to shift tickets.
“Change begets change”, as Charles Dickens famously wrote, and that could prove to be true of the live industry over the next few years.
By common consent, declining and/or unpredictable income from recorded revenue has led to a substantial increase in live activity over the last ten years. At the higher-end of the market, 2016 has showed few signs of a slowdown, with Phil Bowdery (pictured) — the London-based executive president of touring at Live Nation, the world’s largest live entertainment company — describing the year as “without question one of the busiest outdoor years” (that is, at stadiums).
“Our business is very much feast or famine,” he says. “You will go through years where people are out of touring or album cycle, and that is sometimes simply down to the law of averages. You might have everyone out of cycle, and then all in cycle where there is an abundance of things going on.”
This year is clearly very much “feast”, with Rihanna, Coldplay, Beyoncé (pictured below. Photo credit:Daniela Vesco) and Billy Joel among the Live Nation-promoted acts to be doing strong business. Bowdery and team have even made a start on 2017, with Jeff Lynne’s ELO picking up encouraging sales for a Wembley Stadium show that isn’t due to take place until next June.
Bryan Grant, managing director of Britannia Row Productions, alludes to tours with The Cure, Kasabian, Munford & Sons and Robbie Williams as he describes what he thinks has “probably been our best first quarter ever. There has been a lot of activity and we are fortunate that people want to use us.” The company’s current buoyancy is underlined by the fact that it has already invested £1.7m in new equipment this year – with more due expected to be added in the second half.
In which context, the post-Brexit mood of uncertainty can hardly be seen as welcome. “It’s possible we could see a reintroduction of the ATA Carnets [international customs document] — oh god, those days! — as well as the necessity to have visas everywhere you go. But the honest answer is that nobody knows,” says Grant.
Bowdery says currency fluctuations might cause “some US acts to think again about coming here. There are certain cases where it will be a problem because the currency is killing them in terms of being able to make the offers work.”
UK Music is an umbrella organisation representing the UK recorded and live music industry. Director of communications James Murtagh-Hopkins (pictured) acknowledges the current uncertainty and says that any future “changes in free movement, taxation and the application of other duties would obviously inhibit both exports and, in particular, live music professionals. At this stage it is really too early to speculate.”
In order to be prepared for whatever eventuality, UK Music has put together a working group from its members to generate a list of key concerns that will be brought to the attention of “the Departments of Culture, Media and Sport, and the newly-formed Department of Business, Energy and Industrial Strategy in order to ensure that our sector needs are part of the wider discussions when the Government begins to negotiate our exit from Europe.”
As well as its own working group, UK Music is also contributing to an initiative by the Creative Industries Council that will identify challenges and opportunities for each creative sector caused by the referendum. Other members of the CIC include Arts Council England and the British Film Institute.
Among the most pressing concerns, Murtagh-Hopkins highlights the “sharp drop in the value of Sterling, which means fees and guarantees in Euros and Dollars are immediately affected.” Having hit a 31-year low in early July, Sterling had rallied somewhat at the time of writing — although as with nearly everything these days, it seems, all bets are off when one ponders the long-term trajectory.
The same might be said of the escalating number of international terrorist incidents. Speaking ahead of the devastating truck attack in Nice that killed 84 people, Grant says that “the more these incidents take place, the more reluctant audiences might become to gather in public places. I would also say that it has had an impact on some American bands’ decisions about coming to Europe since they regard it as being more dangerous than America — which is one of the great ironies when you think about Orlando or any number of the terrible mass killings that seem to occur there all the time. But ultimately, it’s all about perception, isn’t it?”
It is perhaps just as well, then, that there isn’t too much time to sit around and worry about the future. ‘Peak’ festival season ensures that equipment and people are in heavy rotation, and certainly at the medium to large end of the market, summer 2016 appears to have been another successful chapter.
Dom Harter, the recently appointed managing director of Martin Audio, is among those to acknowledge the demand at the vendor end. “The MLA [Multi-cellular Loudspeaker Array) family continues to be a massive hit – Martin Audio having six Glastonbury stages this year, and the switch of the main stage at Lisbon’s ‘Rock in Rio’ to Martin Audio, being just two examples of our growing presence. We have a number of orders for both new partners and existing companies’ expanding inventory.”
But while the likes of Glastonbury, T in the Park and Latitude continue to perform strongly year in, year out, there are signs of stress at the lower end of the market. The aforementioned ParcelHero research highlighted the scale of the expansion in recent years, with an estimated 1,000 festivals taking place in 2016 — six times as many as 12 years ago. But it also indicated the extent to which many exist on a shaky financial footing, with VAT, energy costs and security provision all meaning that profits can be minimal-to-non-existent. The situation is likely to be particularly acute at those smaller festivals run by enthusiasts, suggested the report.
The Temples heavy metal festival in Bristol and Forgotten Fields in Tunbridge Wells are among the British events to have been cancelled outright — although it’s hardly a trend that is restricted to the UK. There has also been a spate of cancellations in the US, Canada and Australia, among other countries, as multiple markets evince signs of over-saturation.
The Association of Independent Festivals (AIF) represents more than 60 UK festivals, and general manager Paul Reed (pictured) confirms the suspicion that “this has been a bit of a slow year. People are not quite where they were in terms of sales at this point last year. A number of factors play into this — the weather, the economic uncertainty after Brexit, and the increasing competition in the marketplace. One of the trends we are seeing now is that festivals experience an uplift in sales much later on — for example, I know of one event where they saw significant sales in the last two days before it was due to take place.”
But the competition aspect is critical, and as regrettable as it may be to see any event close there is a feeling that this year’s spate of cancellations was inevitable given the phenomenal growth of the sector in recent times. “I think there is the element of it being a correction as there are only so many events people can go to physically, irrespective of how much they cost to attend,” says Bowdery, who in addition to his Live Nation duties is chairman of the Concert Promoters Association. “It’s unfortunate but there will be some natural wastage, for want of a better word.”
Reed readily acknowledges the pressure on organisers and promoters, noting that it “can take a minimum of four years for our members to break even, and as long as seven years in some cases. It’s a high risk activity.” Nonetheless, he is optimistic that new events with “the right formats” can continue to find an audience, and by way of example points to “strong sales” for this year’s debut appearance of Blue Dot. Taking place at the Jodrell Bank site in Cheshire, the diverse event promises headline sets from Jean-Michel Jarre, Caribou and Underworld — alongside a full science and cultural programme that includes lectures, workshops and a live recording of BBC Radio 4’s The Infinite Monkey Cage.
“Promoters do have to work harder than ever to carve out an identity for a festival in what is quite an overcrowded marketplace,” says Reed, who thinks there may also be an argument for promoters to avoid over-fixation on digital marketing and newer platforms as a way to reach potential audiences. “I’ve noticed that there has been a bit of a reversion to more traditional marketing methods, such as flyers. That can work particularly well in the case of smaller independent festivals, which may be appealing to a localised audience. And those small events are really important as gateways for young people. Their parents might not be willing to let them to attend Glastonbury, but may be fine with them going to LeeFest, for example!”
Further challenges no doubt lie ahead – not least what is destined to be a final ‘encore’ by many ‘heritage’ acts — but the dynamism of the live business over the last ten years means that we should perhaps not be too concerned about its long-term future. The desire of young people, in particular, to escape the digital world for a while and re-engage with the live experience shows no signs of abating – and is perhaps part of a wider cultural movement in favour of ‘realness’ when so much of life is lived out online. In this context, it seems inevitable that those promoters and event organisers who are able to offer something new, fresh and attractively-priced will flourish in the years ahead.