WARY WILLKOMMEN

Live Nation Germany Launch Spurs Worries About Pricing, Local Artist Impact

Live Nation Entertainment’s entry into Germany promises to shake up the local concert biz.

The March launch of Live Nation Germany gives the U.S. promotion and ticketing giant its first direct presence in a market that dropped 7% in value during 2008 (Billboard.biz, Nov. 25, 2009), but still generated ticket sales of €3.6 billion ($5.4 billion), according to promoters’ trade group IDKV.

“It’s the world’s fourth-largest market,” London-based Live Nation International CEO Alan Ridgeway says. “Clearly, we should have our own presence there.”

But IDKV chairman Jens Michow warns that Live Nation’s financial clout will inflate artist fees beyond the reach of domestic promoters. “Money will now be the sole decisive factor” in choosing a promoter, he says. Moreover, Michow adds, higher fees could force ticket prices upward even though “the threshold for prices audiences are willing to pay has already been exceeded.”

Ridgeway downplays such fears. “We’ll be competitive,” he says. “But I don’t see this as a move that’s going to push up prices.”

Since 2003, Live Nation had been represented through a 20% stake in Frankfurt-based promoter Marek Lieberberg Konzertagentur. But in December, Live Nation sold its stake to Bremen-based ticketer/promoter CTS Eventim, which now owns 71% of MLK and is Germany’s largest promoter.

“Having a 20% shareholding doesn’t really give you what you need,” Ridgeway says. “The intention was to build it up and ultimately have our own promotion business. But [MLK is] an important part of [CTS’] business; they weren’t keen to give up more of it.”

Ridgeway dismisses speculation that the timing of Live Nation Germany’s launch was related to CTS’ recent appeal to the U.K. Competition Commission against the proposed Live Nation/Ticketmaster merger. He also says that the move won’t affect CTS’ long-term ticketing deal with Live Nation outside Germany (Billboard.biz, Feb. 11).

Live Nation Germany began selling tickets March 12 for its first shows—three arena dates by Lady Gaga in May. Ridgeway declined to comment on the number of Live Nation Germany shows planned for 2010, but industry insiders expect the company to substantially increase the number of German gigs by top international acts.

That could drain consumers’ available cash for smaller shows, says Mira Pfetzing, manager of chart-topping German pop/rock band Juli. “National artists outside the top 10, small and midsize promoters and bookers will all suffer,” she says.

MLK founder Marek Lieberberg is sanguine about losing its Live Nation business, claiming that throughout their relationship, Live Nation shows accounted for only 15% of ticket sales and no more than 5% of MLK’s profits. CTS CFO Volker Bischoff adds that shows by domestic acts usually generate higher margins than those of international acts with higher overheads. As a result, losing its Live Nation connection should have “a negligible effect on the group’s profits,” Bischoff says.

MLK has a string of international acts lined up during 2010, including Green Day and Michael Bublé. Berlin-based DEAG, Germany’s second-largest promoter, also has several on the way, including Katie Melua and Chris de Burgh. Live Nation Germany managing director Johannes Wessels was previously a partner at DEAG.

AEG Germany has dates by the Black Eyed Peas scheduled. However, it primarily operates in Germany as a venue operator, and managing director Detlef Kornett is optimistic that Live Nation’s arrival will “lead to a greater number of concerts.” But DEAG CEO Peter Schwenkow takes a less rosy view. “There won’t be any increase in sales,” he says. “The market leader will simply be ceding sales to Live Nation.”

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By Wolfgang Spahr

Additional reporting by Tom Ferguson, in London