International Live Music Conference - March 9 to 11, 2001

The Emerging Market's Place
Saturday, 10 March 2001
10:30 - 11:45
The Albert Suite
Adults In Charge:

• Tim Dowdall (Multimedia, Hungary)
  
• Nadia Solovieva (SAV Entertainment, Russia)

Introduction: Emerging, Emerged or Emergency Markets?

We discussed what has happened to the so-called emerging markets since the subject first became part of the ILMC agenda 5 years ago.

• Have any of the emerging markets emerged?
• If not, are things getting better or worse? Have any of the emerging markets deteriorated to the extent where they could be called emergency markets?

The picture painted by the responses was generally positive. No promoter felt that his market had actually emerged, but most felt, like a delegate from Serbia, that things were improving. An Argentinian delegate did point out that he believed emergence was dependent on the improvement of the national economy, which was very slow in his country. However, this could be positive for those countries of the old Eastern Bloc, which will soon be joining the European Union, as their economies are improving rapidly.

Competition & Sponsorship

We looked at the effect competition is having in the emerging markets. A Czech delegate described the result of the competition war between himself and another promoter from 1997 to 1999. He said that it drove up artist fees and ticket prices, and led to significant losses for the combatants and to the virtual collapse of the concert market in the Czech Republic. The only beneficiaries were the artists and their representatives.

There was however a general feeling that the situation had stabilized in many countries by the end of the 90's, and that there were now less promoters, and above all less 'rogue' promoters, in operation. One worrying development though was the emergence of sponsors, who preferred to promote free shows themselves, than work through the established promoters.

A Polish delegate, who works for the sponsorship/events arm of a radio station, defended the sponsors' position, saying that she did not believe that the free concerts in Poland had affected ticket sales for other concerts. Another Polish delegate, a promoter, disagreed, saying that free concerts were de-motivating his potential audience.

A Hungarian delegate suggested that the established promoters should talk with the Governments of their countries, and arrange for a strict promoter licensing system, which would prevent sponsors from avoiding to work with them and thus undermining their business. This was supported by a delegate from Dubai, who said that precisely such a system existed in Dubai, and that he considered it extremely important from the point of view of public safety.

85/15 & Globalization

The question was raised whether there is an argument for a better deal in the emerging markets than the standard 85/15. Is it fair that the biggest promoter in Romania, for instance, is expected to run his business on the basis of 15% of profit from those of his 5 shows that are profitable, while the biggest Dutch promoter runs his on 15% of profit from 500 shows?

Surprisingly, it turned out that this was not (yet) an issue for some emerging markets, as the promoters there were able to persuade the agents that percentage deals were impossible or unworkable. This may have come as an eye-opener to those delegates who were used to 85/15 deals, but an Estonian promoter said that he was actually trying to persuade agents to do percentage deals in the countries he worked in, firstly because he believed the guarantees were then lower, and secondly because he thought it reflected well on the professionalism of his operation. As for getting a better deal than the standard 85/15, it was generally felt that it was quite hopeless to try to explain the logic of this to most agents, as deals are generally driven by market forces and not by logic or a desire to attain fairness.

Moreover, everyone, even a delegate who had been a tour accountant for some major artists, accepted that the 85/15 deal is a universally recognised pretence, which does not correspond to reality - to quote the late Bill Graham, "we don't steal, we cheat". When it was suggested that it is a shame that the business is based on a fundamental lie, an English delegate pointed out that this was part of the rules of the game, and therefore had to be accepted as such. The retort came, of course, that rules are only there to be broken, and that perhaps it was time for the business as a whole to grow up, and start basing its deals on reality, rather than on mistrust.

This led conveniently on to the question of whether the forces of globalization might help to tip the balance of power more towards the promoters and help to give a firmer foundation for the live music business as a whole, which, in turn, led to a conclusion of the session, as none of the delegates seemed to feel that the emerging markets were much affected by the current wave of globalization. On balance, termination was a good thing, as we had over-run by half an hour, though perhaps this last topic will provoke more reaction next year...

Tim Dowdall

[ Pollstar Review ]

The Engine Room
Saturday, 10 March 2001
10:30 - 11:45
The Victoria Suite
Adult In Charge: Brian Croft (Vari-Lite Europe, UK)

A collection of production industry heavy-weights look into the high costs of touring - and who is responsible for them. The answer may be surprising, because it doesn't seem to be our long-suffering supply companies as some might have otherwise thought..

The Chairman (Brian Croft) kicked off by briefly telling the story so far, which goes something like this.......

There has been an argument raging for many years now, in which promoters and agents accuse the supply companies of gouging (overcharging is more polite) the artiste to a point where there is no money left in the deal for the promoters. The supply companies' response has always been "how can this be?".

• Firstly, they claim that they are merely fulfilling a specification laid down by the sound engineers, lighting designers, set designers and production managers, all of who are on the payroll of the artiste, not them.
• Secondly, there has been pretty fierce competition between supply companies since the beginning of time - there has always been an over-supply situation in this area. This was principally because many early sound and light companies were founded by people attracted to the glamour of the business who saw it as a kind of 'vocation' rather than an economically sound business venture. (In this 'vocation' weakness I'm sure that they are joined by numerous promoters, agents and managers.)
• Overcharging implies that cartels exist. Fierce competition denies the possibility of any cartels/price rigging. Therefore, say the suppliers, we are innocent of the charge.

On their part, the artiste's creative team always says that the costs of production come out of the artistes end of the deal so what's all the fuss about? But there clearly is a problem; otherwise it would not have come up for discussion AGAIN at conference, so can we try and move the discussion on a bit at this session.

By way of a prompt, Brian suggested that the problem possibly lay with the manager not having the bottle to tell his act that they cannot afford (yet, or no longer) the level of production they are demanding/expecting. Or perhaps the whole live music industry is the victim, by attempting to re-create, live, those sophisticated audio and visual 'effects' which are so much easier to obtain during the making of the CD or the Video.

Then the panelists spoke.

• First up, Chris Beale. Sales Director of SSE Audio Group, who have been hiring out sound systems with crew for live performance for more than 20 years. He reinforced what Brian had said about the fierce competition and stated that prices were actually being driven down, not even allowing for inflation. He cited cases where his company was getting no more per week now, for very much more sophisticated modern sound systems, than they had charged 15 years ago. Dennis Arnold, as a manager in those days, had been one of his clients and could confirm the prices charged then. Chris pointed out that his comparative operating costs had gone up dramatically - for example his crew costs used to represent 30% of the total charge; they are now 60%. Another problem was that, on festivals, his crew were getting paid for an 18 hour day half what the act's sound engineers were getting paid for less than 2 hours work; this was leading to loss of experienced crew to go work for bands. Chris had just returned from the big music fair in Frankfurt and reported that the new sound systems on show there had a very high price tag indeed and that, naturally, these were the very systems that his clients' sound engineers were absolutely insisting on. 500,000 for an arena size system plus another couple of hundred thousand for a digital sound console, many of which were experimental and were likely to receive their road testing in front of a paying audience. The manufacturers had a direct line to the engineers and spent a lot of time and money demonstrating their wares; wining and dining and stroking. So culprit number one is in the dock - the manufacturer. Of course, they would claim that competition was strong in their business too, that prices were pegged accordingly and that they were delivering good value for money when considering the level of technology involved. Perhaps, suggested Chris, the level of technology was not affordable. He re-emphasized the potential problem of the specifier (sound engineer) being courted direct by the manufacturer.

• Next up, Dave Crump. MD of Screenco, part of the Avesco Group. Leading supplier of large screen video services. Dave endorsed everything that Chris had said about the downward price spiral. Because of suicidal competition, he was now able to get well less than half of what his charges should be, and used to be. He said that the current situation in the live music world was probably not sustainable. (Screenco are very active in the world of sporting events.) He could not understand why touring costs are claimed to have risen dramatically. After all, his modern screens are now a fraction of the weight of the previous generation and take up much less truck space. The same is true of sound systems and moving light systems which replaced hundreds of old par cans. Consequently, the number of trucks on a tour, together with their associated costs, should have been dramatically reduced. Similarly fewer stagehands were required with the new improved technology.

• Next up, Dennis Arnold. One of the partners of Triple A, a leading UK promoter and producer.
  Dennis kicked off by saying that he had never, as manager, promoter or producer, accused a supply company of 'gouging' the act and did not understand where this came from. (Brian made a silent promise to himself never to use the phrase again.) He said that, as a producer, he was satisfied that he got good value for money from suppliers. He appreciated that sharp competition was creating that value for him but he would not abuse it to the point of destroying relationships. If one of his shows was over budget he would work with his creative people and the suppliers to reduce the specification and size of production; even after the tour had started. He had recently done this successfully with his Shaolin Monks tour.

  Dennis believed that the problem lay with many managers of emerging and mid size bands allowing their production costs to run away. He had learned the hard way many years ago, when he managed a group whose brand new show would fit into only 20% of the venues on the tour! Although production managers were now much better organized and didn't let this happen as often, there were still unexpected items that hurt the promoter. For example, very expensive rigging calls and unacceptable seat kills. When asked why these were 'unexpected' Dennis stated that the shows very often went on sale before the show had been designed. The rider ALWAYS arrived after the deal was done and tickets were on sale. When asked why this happened he said that advance ticket sales funded the deposit to the band - this in turn allowed the band to pay for the production which would lead, in turn, to big rigging calls and to seat kills. True irony. So here is another candidate in the dock - the manager and/or the production manager. No manager was in the audience to answer that.

A couple of points from the floor

• Tina Waters (Travel Agent) said that many American tour managers were still very naive when it came to the cost of touring Europe. The budgets looked frightening on paper but, when it came down to it, she could often reduce the travel and hotel costs significantly.
• Pete Wilson (Triple A) thought that, these days, one culprit was the set designer. He said he no longer had a problem with sound and light suppliers but, too often, expensive and elaborate sets were built that could not fit into the venues in terms of size and time available; and much of the stuff stayed in the truck.

During the general discussion a few points emerged

• The punters' level of expectation, with regard to production values at live shows, was increasingly high. Because of the increasing sophistication of home audio and video equipment this was likely to intensify rather than diminish; so we had better learn to deal with it. Dennis Arnold said he had a couple of clients who still went out with modest production; they did longish tours and everybody made money; they tended to be 'real' musicians (singer songwriters); he admitted they were very much in the minority.
• It was universally agreed that the unaffordability of production values seems not to occur at the very top end of the business - firstly the top artistes tend to have excellent, experienced, production managers; secondly with big sell out tours there is enough dough sploshing about that nobody gets hurt?
• The act's personal touring party tended to be way too big but that really is their business and does come out of their end of the deal; however it would have a knock-on effect on the overall cost of touring. Again, it was felt that the manager needed to get tougher on this issue.

Conclusions

• The cost of touring is high because everybody says it is but we were hard pushed to put our finger on the exact spot. Maybe it is only too high in relation to (diminished) overall annual box office revenues. Belt tightening needed to happen across the board; not just by the suppliers
• Three possible culprits emerged.
  1. Manufacturers (hard selling to the specifier).
  2. Inexperienced Managers and/or Production Managers (but not at the top end of the market).
  3. Set Designers!!!!!

Brian Croft

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Speakeasy 3 - Women in Jazz - Press and Publicity 'What makes a successful campaign'
Saturday, 10 March 2001
10:30 - 11:45
Carl's Crypt, The Mezzanine
Adult In Charge: Dennis Armstead (Yellow Go-rilla, UK)

Florence Halfon, WEA Jazz publicity and Julie Allison, Universal Jazz press were my guests for this session, again bringing in the recording company to enlighten us on their work habits. This topic was a continuance from last year's Speakeasy 2 wherein we covered how the recording company places an artist in the media to work hand in hand with the new releases and how this is accepted or rejected by the publication and how difficult it is, even with established artists, to get coverage.

The arguments that were created this year were that in small regions, ie. Austria, versus the United Kingdom, the Jazz departments sometimes do not exist, or the person who is in charge of this genre of music has to also take care of classical as well as world music, thereby diluting the impact of that new release.

This made a very enjoyable debate once we got started.

Role Call (from last year who joined us this year again)

• Roby Schuler - Luxembourg City Tourist Office

Role Call (This year's participants)

• Christian Gerlach - Karsten Jahnke Koonzertdirektion GmbH
• Brian Thoebald - BPR
• Erich Zawinul - PromotersGroup
• Ewald Tatar - PromotersGroup
• Jacques Launay - Vienne Jazz
• Ilse Weinmann - European Tours & Management
• Alan Bates - Candid Productions
• Marc Connor - Candid Productions
• Lasse Nilsson Wihk - NW Productions
• Myles Weinstein - Herbert Barret Management Inc
• Laura Hartmann - L VanHart

Dennis Armstead

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Meet The Venues / National Arenas Association
Saturday, 10 March 2001
10:30 - 11:45
The Westminster Room
Adult In Charge: Peter Tudor (Wembley, UK)

At the "Meet the Venues" session at ILMC the National Arenas Association presented music concert market research for the year 2000.

Hosted by Peter Tudor (Wembley Arena) the presentations were by Phil Mead (Scottish Exhibition & Conference Centre), John Drury (SFX) and the NAAs Chairman Linda Barrow from the NEC Group.

The NAA concert research is based on concerts held throughout 2000 by fifteen member venues. The purpose of the research is to review the concerts held within the member venues in order to assess size and trends in the market. Since the 1999 report, two new venues have joined the Association, The National Ice Centre, Nottingham (opened April 2000) and Odyssey Arena, Belfast (opened December 2000).

Introducing the presentation, Linda Barrow, NAAs Chairman and NEC Group Director of Arenas, outlined that "the National Arenas Association has demonstrated the wide range of music events throughout the UK in the last year, and the economic importance of the Arena concert market throughout the country." She also predicted that with new venues opening, the Arena music market looks set for another buoyant year in 2001.

The highlights of the research presented included:-

• 419 arena concert days were held throughout 2000 in 15 venues across the UK. Historically there is a continuing pattern of growth in the number of concert nights.

• Total attendance at arena concerts was 3,053,055 people.

• Teen bands (such as Steps and Five) played the greatest numbers of concert nights in 2000 - 109 nights with pop, rock and Middle of the Road not far behind.

• The most frequent performers accounted for approximately 15% of total attendance. Teen bands played 56% of the most frequent performer nights and Steps, Five and Britney Spears alone represented 57% of most frequent performance audiences.

• The year 2000 saw Steps break the record set by Boyzone in 1999 by playing to 492,466 people over 55 nights. Previous records:
  • Boyzone 443,524 over 41 nights in 1999
  • Wet Wet Wet 443,337 in 1995)

• The year 2000 saw an increase in the average ticket prices paid for middle of the road, rock and teen, concerts and a slight reduction in pop prices. Overall the average ticket price has increased slightly from £ 21.00 to £ 22.50.

To receive a copy of the full research report, send a cheque for £ 50.00 made payable to National Arenas Association direct to:
Eileen Naughton NAA Administrator
National Arenas Association
27 Friary Avenue
Shirley
Solihull
West Midlands
B90 4SZ
United Kingdom
Email: Enaughtonnaa@aol.com

 

ADDITIONAL INFORMATION

1. National Arenas Association members 2000/2001 are as follows:
   • Aberdeen Exhibition & Conference Centre
   • Bournemouth International Centre
   • The Brighton Centre
   • Cardiff International Arena
   • Earls Court
   • G-Mex
   • London Arena
   • Manchester Evening News Arena
   • Green Glens Arena, Cork
   • NEC Arena
   • National Indoor Arena
   • Nottingham Ice Centre
   • Odyssey Arena, Belfast
   • The Kings Hall, Belfast
   • Scottish Exhibition & Conference Centre
   • Sheffield Arena
   • Telewest Newcastle Arena
   • Wembley Arena

    

2. Linda Barrow, NAA chairman, also spoke of the NAAs past and present initiatives:
   • "The National Arenas Association is celebrating its 10th anniversary this year and prides itself on what it has achieved in such a short time. Formed in 1991 to provide a forum for Managers of UK indoor seated Arenas, the NAA currently has a membership of seventeen."

   • "In 1993 in conjunction with the Home Office and the Scottish Office published the Guide to Health Safety and Welfare at pop concerts and other similar events. Consulted and acknowledged for their contribution were:
     • Alan Craig, SECC
     • Steve Dudley, NEC Group
     • Andrew Young, Wembley Stadium
     All representing the NAA."

   • "In 1998 the NAA in conjunction with the Home Office Emergency Planning College set up Health & Safety Workshops to raise awareness of how the various venues approach issues of safety management, audience welfare and contingency planning for different types of events.

     Thus far 130 have attended the residential workshops at Easingwold, York, and there are two further workshops planned for April and September of this year. The aim of these workshops is to provide a discussion forum for front-line duty managers on key health, safety and emergency planning issues relating to arenas and other major indoor events."

National Arenas Association website: www.ilmc.com/naa

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The Tax Office
Saturday, 10 March 2001
11.45 - 13.00
The Main Room
Adult In Charge: Dick Molenaar (All Arts, Netherlands)

Awaiting Text Input

The Festival Forum
Sunday, 11 March 2001
10.30 - 11.45
The Albert Suite
Adult In Charge: Herman Schueremans (Rock Werchter, Belgium)

Awaiting Text Input

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Everything You Always wanted To Know About... Insurance
Sunday, 11 March 2001
10:30 - 11:45
The Chelsea Room
Adult In Charge: Martin Goebbels (Robertson Taylor, UK)

A well attended breakout panel prompted lively debate, concentrating mainly on cancellation/non-appearance coverage, with those present including promoters, agents, venues, management and travel agents.

It was clarified that generally, separate policies are placed for:

• the band (for their own costs and expenses, or income whichever greater)
• the promoter (for his local costs and expenses and profit)
• the agent (for his commission)

with other policies to be considered by:

• the merchandise company (for their costs, expenses, profit and possibly advance to the band)
• sponsors

as well as the wider issue of service companies such as travel agents who, in the event of total cancellation of a tour could have a substantial loss of commission.

The travel agent present gave an example whereby the company may put in six months considerable work before a tour even begins, and whilst individual loss of shows would not cause them a problem, as hotels and possibly transport arrangements would still be used, if the were cancelled in its entirety, and the band and crew returned home, there would be a considerable loss of income.

With regard to payment of the premiums, it was generally agreed that each party should be responsible for their own insurance coverage although there were questions as to which premiums could be entered as a show cost. This area is not really up to insurance brokers, and needs to be negotiated by the agent at the time of arranging the tour.

It was highlighted by the panel chairman that it is vital to use an insurance broker experienced in the music industry, as so many of the horror stories on claims involve insurance brokers or insurance companies who have little or no knowledge of the industry.

This may result in cheaper premiums at the outset, but in the event of a claim will only cause problems. It was acknowledged that even using experienced insurers, claims can sometimes become rather involved, and inevitably questions raised, but ultimately a broker is acting on behalf of the policy holder, and not the insurance company, and will help in negotiating a fair settlement.

The chairman also highlighted the need to provide solid and full information to insurers both at the time a policy is effected, as well as during the tour if any changes are made.

Examples of this, which are based on information which it is felt could affect insurers judgement when agreeing a premium, include:

• Any previous, or pre-existing illness or injury to both the band members and their families.

• Any travel plans that may cause problems, particularly if a very tight schedule has been arranged.

• Any separate travel away from the tour, including any press or promotional work, or personal travel that may take them away from the main touring route.

• Whether or not a headline act would cause cancellation of the show if you were insuring a support band, or a festival line-up.

• The total amount of personnel performing at any show whose individual unavailability may cause cancellation of the show (including backing vocals and musicians).

• Any family matters such as pregnancies that may give rise to cancellation.

 

On the subject of claims, it was discussed as to whose responsibility it is to try and save money in the event of show cancellation, and it was agreed that this has to be the responsibility of the policy holder to try and negotiate the best deal for all sides, but with advice from the insurance brokers. A loss adjuster/claims assessor is generally appointed by the insurance company, but they are there to mediate between the two parties, and offer advice, but are not there to deliberately try and reduce the size of a claim on behalf of the insurance company.

Martin Goebbels

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The Grown Up's Room
Sunday, 11 March 2001
10.30 - 11.45
Westminster Room
Adult In Charge: Richard Taylor (Simkins Partnership, UK)

"Rebels Without A Clause" Panellists for this session were business affairs consultant Ben Challis of The Television Company, accountant Mark Robertson of Ernst & Young and insurance broker David Bishop of Robertson Taylor. They joined me for a relaxed, but lively, look at the use of "standard clauses".

Ben felt that live industry contracts will get increasingly complex, creating pressure to standardise agreements. We discussed force majeure provisions as an example. We were reminded about the age-old problem that because performance contracts so often get made very late, the protection of such provisions isn't available when it may be needed.

Mark also thought that standard provisions were on the increase. We discussed audit rights (better called "inspection" rights as Eric Longley reminded us from the audience). Settlement on the night is no longer the universal practice and any right of later inspection has to be spelled out carefully. Mark pointed out that language may be "borrowed" from one contract to another and if this is not done carefully it may produce the wrong result.

David said that standard language was also a feature of his work, warning against completing appearance contracts without making sure first that the risks were identified and insurable.

Thanks again to my panel and the audience, this year including Martin Hopewellq himself, for an informative session which could have carried on much longer.

Richard Taylor
The Simkins Partnership

The Booking Ring
Sunday, 11 March 2001
12.00 - 13.30
The Main Room
Adult In Charge: Emma Banks (Helter Skelter, UK)

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