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Czech Republic

Market Focus
November 12, 2017
Guns-N'Roses-at-Letnany-Airport
Centrally-positioned for tours across Europe, the Czech Republic has a healthy live sector, with the only major challenge, apart from rising taxes, being the lack of mid-sized venues, although that situation looks set to improve. Neil Bracegirdle reports

 

Having been one of the more independent and enterprising states under the domination of the Union of Soviet Socialist Republics, Czechoslovakia emerged from communist rule in 1989.

Following a peaceful split with Slovakia in the early 1990s, the Czech Republic joined the European Union (EU) in 2004 and now has one of the highest Gross Domestic Product (GDP) growth rates, and lowest levels of unemployment, in the EU.

It’s export market, consisting predominately of motor vehicles, remains strong, while the decision to refrain from adopting the euro and retaining the koruna has also paid dividends.

Anthony-Jouet

Centrally located on the continent between Germany, Poland and Austria, it is attractively accessible for international tours, with its capital Prague being one of the region’s most popular tourist destinations.

The country’s biggest promoter is Live Nation Czech Republic (LNCP), which emerged after global giant Live Nation Entertainment bought Robert Porkert and Serge Grimaux’s InterKoncerts in 2004.

LNCP has put on 36 shows this year, including concerts by Kiss, Depeche Mode, Guns N’Roses, Robbie Williams and Scorpions. The largest show in its history was with the Rolling Stones at Letenska Plan (cap. 85,000) in Prague.

According to the company it has grossed around 544 million koruna ($25m) in 2017 and sold more than 360,000 tickets.

“The market is healthy and people are buying tickets fast,” says MD Robert Porkert. “I don’t think there are any fears here or holes of missing acts.”

What is perhaps missing though, are some top-quality venues.

“We don’t have a big enough stadium for proper outdoor shows – the biggest is Eden Park [30,000] in Prague – and therefore we need to stage big shows with the likes of AC/DC and Guns N’Roses on outdoor green fields,” Porkert explains.

“Over the last two years we have started to use the airport in Prague Letnany, where we need to build everything, but can accommodate more than 60,000 fans.

“There is also a shortage of modern venues with capacity of 4,000 to 8,000, although this might change soon, as the O2 Arena [20,000] is now starting to build a smaller brother next to them which should be open sometime in 2019.”

Preparations for next year are already well underway, with around 200 shows planned, 50 of which have been announced, including Ozzy Osbourne at Letnany Airport and Metallica, Roger Waters and Shania Twain, all at the O2 Arena.

Lenka-Murarikova

For the majority of the shows tickets are priced between 1,280-2,550 koruna ($59-117).

Promotion and production company Fource Entertainment also has an office in Toronto, Canada and has recently expanded into Poland with an office in Warsaw.

The company, which has been running for more than 20 years, has a close relationship with the O2 Arena and has put on shows there by Black Eyed Peas, Beyoncé, Kylie Minogue and Ellie Goulding.

“At the end of 2013, the local currency dropped significantly which made our offers less competitive compared to the euro zone markets, as we weren’t always comfortable in offsetting that shortfall with a ticket price increase,” says Fource founder Anthony Jouet.

“It’s slowly getting stronger this year though. It helps that touring revenues have taken more importance for the artiste and markets like the Czech Republic are being included more frequently into the touring plans.”

The location of the country, four hours drive from Berlin and Vienna and five hours from Munich, certainly makes it an attractive proposition, but also presents challenges.

“We are constantly being approached by agents to work early on their new acts,” explains Jouet. “As much as we try to find opportunities for them, we also need to be selective as we like to offer the same level of services for all acts we promote. We like to take the time to build the acts the right way.”

As Fource promotes around 70 shows annually, Jouet is among those who believe the country suffers from a lack of venues, with a need for something to fill the 1,000 to 2,500 capacity void.

“The market has changed a lot over the last five years. The club scene is currently extremely dynamic, which is essential to build a strong base for the whole local music industry,” he says.

“Except for Forum Karlin [2,500], we only have a couple of old hockey arenas between 2,500 capacity and the O2 arena.”

Forthcoming shows by Fource include Imagine Dragons at O2 Arena, alt-J at Forum Karlin, Noel Gallagher’s High Flying Birds at Velký sál Lucerna (2,500) and Nothing But Thieves at MeetFactory (1,000).

 

The time is right

At 10:15 Entertainment, established in the early 1990s, Milena Paleckova says it is enjoying its best year since 2013 and has most recently put on Gorillaz at O2 Arena (configured at 11,342), with tickets between 1,690-1,990 koruna ($77-90).

“Tickets are selling well, most of our shows this year were sold-out,” says Paleckova. Among these were Nick Cave & the Bad Seeds at O2 Arena, Suzanne Vega at Archa Theatre (1,200) and Diana Krall at the Congress Center (2,764), both also in Prague.

Despite the success, the focus on the capital can be problematic due to the city tax on tickets, which has risen to five per cent on live shows. This used to apply only to venues over 3,000 capacity, but was altered last year to include all venues.

Congress-Center

“The problem is that promoters in Prague do not really talk to each other and are not able to act together against it,” says Paleckova. “Only clubs and events financially supported by the city do not pay this tax.

“A further issue is that ticket prices for international acts are pushed too high if we compare it to salaries to people, especially the young. The reason is a combination of artiste fees and competition.”

Over the course of the year 10:15 has promoted 11 shows and although it was the exclusive booking agency for Open Air Festival (now Trutnoff Open Air) between 2010 and 2013, bringing in acts such as Kasabian, Underworld, Fatboy Slim and Chemical Brothers, it has no plans to establish an event of its own.

“I would say the Czech Republic has one of the highest number of festivals for the size of the country,” says Paleckova. “It is not only about festivals with international artistes on a bill, you can find a festival with local artistes in every big city during the summer.”

 

Charm offensive

Another significant player is Charm Music, the concert division of Charmenko, which also has offices in Turkey and Poland. It has promoted shows with Ed Sheeran, Green Day, Portishead and has upcoming gigs in the capital with The Kooks at Mala Sportovni Hall (4,500), and Franz Ferdinand at Forum Karlin. The average price of tickets for both events is 971 koruna ($44).

“I think that ticket prices for concerts here are quite stable,” says Charm’s Lenka Murarikova.

“Of course, there are concerts that are more expensive lately, that depends on the artiste name, but at least in the past few years there has been little growth in ticket prices. On the other hand, there is a bunch of shows which we were not able to confirm and we could not push ticket prices much higher, so we were not able to meet artiste’s fee requests.”

Murarikova says tickets for established acts are selling well, as they attract an older audience, but emerging artistes can struggle as the younger generation often prefer watching and listening to music online, rather than attending live shows, she believes.

“Higher VAT on ticket sales [up from nine to 15 per cent], city tax and currency exchange rates are the reason we cannot offer the same money to artistes who played Prague in the past, and definitely not more,” she says.

“Czechs are also delayed in knowing rising acts – artistes playing small arenas abroad would be in small club shows here, so obviously we cannot meet their expectations, unless we get a filler date or they are keen to play Prague.”

Staging between five to 10 major shows each year Murarikova sees potential for growth in the market, despite the difficulties.

“There are definitely good signs for live music in the Czech Republic, we have a lot of artistes coming back every year,” she says.

“The Czech audience is very culturally advanced, so attendance of events will definitely not decline”

Vladka Zahradnikova

Classical offering

JV Agentura has carved out a niche for itself, promoting classical concerts and live orchestra shows featuring soundtracks from films such as Lord of the Rings, Pirates of the Caribbean and Fast and Furious.

It is also promoting Andrea Bocelli to a 10,000-capacity audience at O2 Arena, with tickets between 857-12,294 koruna ($40-560).

“Ticket prices correspond approximately with those in Western Europe, as it would not be possible to pay for more ambitious projects,” says JV co-owner Vladka Zahradnikova.

“Surprisingly enough, local salaries are much lower than the European average and it shows that the Czech public is willing to spend a lot for culture and entertainment. But of course we would be much happier if we could offer lower ticket prices.”

Robert-Schaffer

As well as staging around five big concerts in Prague each year, the company also runs a couple of tours at regional venues. Zahradnikova believes the country’s cultural scene is thriving and has established itself as a part of any major world tour.

“The Czech audience is very culturally advanced, so attendance of events will definitely not decline, and we didn’t even experience this during the last economic crises,” she says.

“We believe that by importing good-quality artistes and prestigious projects we will be able to increase their appetite still further.”

Main attraction

Arguably the best-known venue in the region, the O2 Arena, which can accommodate up to 20,000 people.

On average the venue stages around 100 events each year, 30 to 40 of which are concerts, including artistes such as Madonna, Lady Gaga, Rihanna, Robbie Williams and Paul McCartney.

“The market is going well and this high demand for entertainment might stem from the growth in purchase power of the local population,” says Robert Schaffer, CEO and chairman of Bestsport, which owns and operates the venue.

Michael-Jacobsen

“It is also important to note that our market exceeds the borders of the Czech Republic. The catchment area in central Europe covers the population of 15-18 million. The O2 Arena is a destination for visitors from Slovakia, Poland, Germany, Austria, Hungary and Russia, with a catchment area in central Europe of 15-18 million people.”

Responding to the need for increased venue options, the arena is in the process of building an adjacent multi-functional centre, which will include up to 24 halls.

“This centre is to be physically integrated into the O2 Arena and will add another dimension,” says Schaffer.

“Together we will be able to accommodate indoor events for up to 30,000 people. Also, we will be able to run different events at the same time in both spaces, in the O2 arena there can be a huge pop concert, while in the smaller hall we can hold a rock show for several thousand people.”

Shows taking place at O2 Arena include two shows with Roger Waters, Metallica, Imagine Dragons and Depeche Mode.

“We hear our audience and we hope and expect to bring more international stars and other performers to the Czech Republic and central Europe offering them state-of-the-art environment and services,” adds Schaffer.

Keen to harness the demand for shows is venue operator European Leisure Management, which runs open-air Vychonda Amphitheatre (10,000) across the border in Slovakia.

“We see the Czech market as a strong one and a growing music and creative scene which can support reasonable ticket prices,” says MD Michael Jacobsen, whose family previously managed venues in Australia and New Zealand, including Sydney’s Entertainment Centre (13,250) and Auckland’s 12,000-capacity Vector Arena (now Spark Arena).

“The live music market is strong and diverse, especially in Prague, and we have new venues under management in the Czech Republic that we intend to announce in 2018.

“The market is placing increasing demands on the existing venues and new and diverse venue facilities need to be in place to cater to the organic evolution.”

“The club scene is currently extremely dynamic – which is essential to build a strong base for the whole local music industry”

Anthony Jouet

Looking ahead

Occupying 60 per cent of the country’s primary ticketing market, according to the company, is Ticketportal, which works with around 600 live music shows annually.

Although facing increased competition in the sector after Ticketmaster acquired Ticketpro, founded in 1992, earlier this year, Ticketportal claims not to be phased and counts shows by Rammstein, Justin Bieber and AC/DC among its biggest sellers over the last 12 months.

“Obviously it depends on the artiste, but generally speaking tickets are selling well,” says MD Lucia Bočánková. “I think prices have a tendency to rise from year to year, but that’s a question for the promoters and artiste managers as to why.”

Bočánková feels the only issues blighting the market, are the rise of secondary ticketing, with Swiss-based resale site Viagogo causing the majority of the problems through its “misleading Google ads”, while the emergence of a homegrown world star would be welcomed.

“We are missing a U2, Coldplay or an Adele,” says Bočánková, who adds that the company is currently working on new software which will be launched next year.

Prague-based Obscure Promotion will soon have put on 110 shows this year, at venues ranging from 100 to 15,000 capacity. Founder Thomas Fiala says the market’s other most prominent venues are Tipsport (12,000) and Sono (1,200) in Brno.

“I would personally consider the biggest issue in our market as a lack of venues in Prague, which makes my life more difficult,” says Fiala. “One or two additional halls with 1,000-2,000 capacity would be vital.”

The company’s biggest shows this year have featured HIM, Architects, Persistence and Mastodon.

“It looks that the crisis is behind us and people want to enjoy themselves,” adds Fiala.

 


Supporting act

Founded in 1994 by Czech national Frantisek Zykan, MILOS is one of the largest truss manufacturers in Europe, providing ready-made structures and products to a wide range of events. In 2012 the company became part of staging manufacturer Area Four Industries, which is headquartered in the Czech Republic and includes subsidiaries LITEC, TOMCAT and Xstage.

Among the events the company has worked on include Lollapalooza Berlin (cap. 75,000), Italian singer Gigi D’Alessio’s tour and Oak Point Park Amphitheatre (1,500) in Texas.

“With a firm foundation in the Czech Republic, our vision and the ongoing sales activities of our truss, support structures and staging products are global,” says MILOS MD and CEO of Area Four Industries Zykan.

This year MILOS created the largest roof it has ever engineered. The MR5 Heavy-Duty roof measured 31 x 18 metres and covered the main stage of the first edition of TIMESHIFT Bucharest Music Festival (15,000) in Romania, featuring Bloc Party and David Guetta. It had a clearance height of 11 metres and featured a cantilever of two metres in front and 0.7 metres in the rear of the stage.

“We designed the roof to handle a 24,000 kg uniformly distributed load on the horizontal beams above the main stage, and an additional 7,000 kg for PA and LED-screens in each side house,” says technical director Norbert Tripp. “The total load was 38,000 kg.”

Also new to the market the company has designed a MILOS MT-PA5030 PA fly tower, for live events that require a compact PA fly tower for small systems and can be used both indoors and outdoors.

 

Facts

Population: 10.6 million

Language: Czech

Currency: Czech Koruna (CZK)

US$ exchange rate: 0.04535

GDP per capita (US$): 18,266

Broadband households: 3.4m

Internet users: 7.6m

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