“It’s worse to have fun”: will concert agencies survive without foreign artists

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Darkness and balalaika

“Friends, the group” Nerves “suspends its activities in Russia indefinitely,” – said in a statement appeared March 9 on the official page of VKontakte rock band “Nerves”. In June, the band was scheduled to perform at the annual Wild Mint Festival, but two days before the announcement on social media, the group’s soloist Zhenya Milkovsky told the event’s producer Andrei Klyukin that he refused to perform. “It simply came to our notice then. And he can be understood, because “Nerves” is a Ukrainian band, it was very difficult for him to perform in such conditions. He left Russia a few days later, ”Klyukin recalled in early March in an interview with Forbes.

Nerves is not the only group to cancel its performance in Russia after the start of Russia’s “special operation” in Ukraine. Green Day, Till Lindemann (soloist Rammstein), Imagine Dragons, Bring Me the Horizon, Twenty One Pilots, The Neighborhood, Franz Ferdinand and many others refused to come. The organizers of major music festivals have announced their cancellation or postponement to 2023.

According to Klyukin, there are only about 10 major festivals in Russia, which sell a total of about 200,000 tickets a year. The most popular of these, Invasion, sells 45,000 tickets, he said. A source close to the organizers of the festival told Forbes that the decision on whether the “Invasion” will take place in 2022 will be made after April 7.

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Co – organizer of another major festival “Pain” (up to 20,000 spectators) – the concert agency Pop Farm – announced its cancellation on March 1. “We do not know when, in what conditions and in what format we will be able to return to work, and we only hope that the ongoing horror will end as soon as possible,” wrote organizers on the page “VKontakte”. A Pop Farm spokesman declined to comment. An employee of a major music company told Forbes that Pop Farm “was going to gain momentum after the coronavirus”, but was able to hold only a concert by Zemfira on February 26. Pop Farm co-founder Andrei Samorukov wrote on his Facebook page on February 25 (recognized as extremist and banned in Russia) that “tomorrow will be the last great concert, and then – darkness and balalaika.”

The cancellation of the annual Park Live festival was announced known March 28. Earlier, the agency “Mill”, which organizes the festival, said that the headliners Limp Bizkit, Gorillaz, Placebo and My Chemical Romance canceled their performances.

“Not all musicians have given up concerts in Russia. Moreover, under favorable circumstances, several artists intend to perform at the festival next year, “- said in a statement Park Live. The Mill declined to comment.

“Concerts can be held, but most artists find it unacceptable to do so in such times,” said an employee of a major music company. Semen Halperin, the former director of the Poster for Artists and Repertoire, agrees with her. “The vast majority of international artists will not have the moral, reputational or financial ability to come to Russia for a long time,” he said. Halperin said that the event department of “Afisha” was closed due to cost optimization, because after February 24 there was no need for it: it is impossible to hold events, so there is nothing to do with the team.

Prior to the events in Ukraine, the “Poster Picnic” was planned to be held in two days, both in Moscow and St. Petersburg, so the organizers focused on the festival budget two or three times higher than usual, said Halperin. According to him, the headliners were to be the Australian Tame Impala and the American Kings of Leon. A source close to the Picnic organizers said that the fees from ticket sales and investments of sponsors amounted to about 100 million rubles per day, and in 2022 it was planned that they would reach 400-500 million rubles (in two days in two cities). Most of these funds went to artists’ fees, added the Forbes interlocutor.

Concert for the ruble

However, some events in Russia will still take place, for example, the organizers will hold a “Wild Mint”, but will not earn on it, says Klyukin. According to him, the current festival is an opportunity to meet with the audience and close the debts to them, as in 2020-2021 the concerts were canceled en masse due to coronavirus restrictions.

In 2021, “Wild Mint” canceled a few hours before the festival, and the organizers lost 96 million rubles because of this, says Klyukin. About 50 million rubles of them are the proceeds from ticket sales, from which spectators asked to return 4 million rubles, he said.

“Tickets have already been sold, the artists unanimously supported the festival, offering to perform in 2022 for one token ruble, there will be no marketing costs, because after the cancellation of the festival, many media outlets promised free information support,” said Klyukin. As a result, costs will be reduced by about half this year, to 65-67 million rubles, he added. Foreign artists (Aurora from Norway, Ren and The Big Push from the UK) were supposed to be in addition to the domestic line-up, but their loss for the festival will not be critical, said Klyukin.

The entertainment sector in the 2020 pandemic collapsed by 70-75%, in some months – by 95%, said a representative of the company Intermedia, which conducts research in the field of culture and entertainment. If in 2019 the volume of the market of concerts, performances, shows with the participation of performers (open or on tickets) reached 212.4 billion, in 2020 it decreased to 145.9 billion rubles. Despite the ban on coronavirus, the industry began to recover in 2021, but the loss of a significant number of top artists and reduced solvent demand in 2022 will negatively affect the industry, according to Intermedia.

According to the company’s estimates, in 2019 the share of commercial performances (without the use of the state budget) reached 100.1 billion rubles, and in 2020 – only 27.6 billion rubles. If nothing more happens this year, it will amount to 40-50 billion rubles, which is 30-40% more than in 2021, but twice less than the pre-pandemic year 2019, the company said.

The concert business did not recover after the pandemic, when two years ago in Russia banned all events over 50 people, said the director of projects of the concert agency TCI Julia Doroshina. During this time, people have become accustomed to buying tickets in advance and have lost confidence in the organizers, she said. “The organizers were exhausted in search of a solution to the problem: it was necessary to return the money for canceled concerts, but they went to prepay artists, to reserve venues, and something was spent on advertising, office maintenance,” she said.

After two years of banning concerts, Russian agencies were in a difficult financial situation, but it was hoped that the situation would improve with the end of the pandemic and the active return of artists to touring in 2022, says Halperin. “Because of [«спецоперации» — изменено Forbes] in Ukraine and the refusal of artists to come to Russia will not happen, and the money for tickets to postponed concerts to most organizers will be difficult to give in full, “- he said.

Most concert agencies took an advance from ticket operators, paid a fee to the artist, and then returned the advance from ticket sales, says the head of Delta Mekong Concerts Vladimir Doronin. “Now the money is hanging in the” unfriendly “countries, there is no way to get it back, but refunds for tickets must be made,” he said.

If viewers start demanding a refund through the courts, it will lead to many bankruptcies and the destruction of the industry, according to the producer of “Wild Mint”. However, he believes that the industry will be able to revive.

For example, the concert agency Line Up rebuilt its business model in 2014 after the fall of the ruble: reduced the share of foreign artists from 60-70% to 5-10%, says the owner and manager of Line Up Nikita Novitsky. “In fact, we refused concerts of foreign artists because of currency risks,” he said. According to Novitsky, the agency began to develop, among other things, related areas: equipment rental, concert venue management, as well as investment in its own music EdTech project. “We will definitely lose profitability, but we must persevere, keep the business and do without staff reductions,” he hopes.

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“People have not gone anywhere, in a difficult emotional state they are even more eager to resort to culture, want to reboot regardless of political beliefs,” – said managing director and promoter of the club “16 tons” Pavel Kamakin.

However, according to Doronin from Delta Mekong Concerts, someone who “knows something in this life other than organizing concerts” is likely to go out of business. “We should not forget that people’s money has begun to run out, they are losing their jobs, respectively, their solvency will fall many times over. And have fun in the background [«спецоперации» — изменено Forbes] it is worse for a normal person, ”Doronin said.

“And yet there is a feeling that people need positive emotions,” says an employee of a large music company. “I was at Richter over the weekend, where [музыкант] Pasha Artemyev was playing the piano: there was a full hall and a cafe, which had been empty for many days. For small chamber events, the audience will flock like moths to support the artist, a favorite place and themselves, because at such a time it is important to stay together, “- concluded the Forbes interlocutor.

* According to the request of Roskomnadzor, when preparing materials on a special operation in eastern Ukraine, all Russian media are obliged to use information only from official sources of the Russian Federation. We cannot publish materials in which the operation is called an “attack”, “invasion” or “declaration of war”, if it is not a direct quote (Article 53 of the Federal Law on the Media). In case of violation of the requirement from the media, a fine of 5 million rubles may be imposed, and the publication may be blocked.

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