Live-music titans building China strategies

By | January 19, 2008 at 2:06 AM

There’s nothing like 1.3 billion potential ticket buyers to attract the attention of the live entertainment business. With the world’s largest population and an exploding economy, China may represent the future for international touring artists.

That’s why the three biggest players in the U.S. live entertainment business — Live Nation, Anschutz Entertainment Group (AEG) and Ticketmaster — have all staked claims in China.

It’s virgin territory. “In China you have a huge potential market, a clean slate and opportunities you don’t see in more mature markets,” Ticketmaster CEO Sean Moriarty said. “There is no established way of doing business yet, and I think everybody in the market gets a shot at a fresh start.”

The overall ticketing, production and venue infrastructure in China is improving, spurred on by preparations for the 2008 Beijing Olympics in August. As these three companies jockey for position in China, Ticketmaster, with its Emma Ticketmaster operation and a deal to provide ticketing for the Olympics, seems to have the early lead.

While certainly active in the region, Live Nation seems to be taking a more cautious approach. “(China) is not going to be one of our top markets for a while, but it’s a market with great potential,” Live Nation International Music CEO Alan Ridgeway said, citing the 50 cities with populations of more than 1 million as positive attributes. “And knowledge of Western acts is growing all the time.”

Below, Billboard assesses each of the three major U.S. live entertainment players in the Chinese market.

TICKETMASTER

Ticketmaster’s operations in China are run by Emma Ticketmaster founder/CEO Jonathan Krane, who founded Emma four years ago, focusing on the live events and ticketing markets in mainland China. Emma has promoted shows by the Rolling Stones, Eric Clapton, Avril Lavigne, Linkin Park, Christina Aguilera and Beyonce.

Headquartered in Shanghai and Beijing, Emma is a full-service ticketing operation in six cities across China, with many venue partnerships in place. The Ticketmaster deal was completed in April, and China marks the only market where Ticketmaster is both a ticketing company and a risk-taking promoter.

Ticketmaster’s status as ticketer for the Olympics is strategically crucial. Emma will also produce and promote several Olympic celebration shows and related concerts, where Western acts are sure to appear.

“There is big demand for anything international here,” Krane said. “First-time events are very popular now.”

Linkin Park’s November 2007 sellout in Shanghai showed an appetite for U.S. acts, though ticket-buying patterns demonstrate cultural differences. “(On-sale dates) have not meant a lot in China. A lot of the tickets are typically bought within the last three weeks,” Krane said, though that’s changing. “At the on-sale on the first day we sold 10,000 tickets, which is great.”

Ticket distribution includes the same channels as in North America — online, outlets, phones, box office — but the allocation is different. “We’re probably doing 10 percent to 15 percent online, but that’s a big jump from a couple of years ago, when it was about 5 percent,” Krane said.

Krane sees the upside of investing in live entertainment in China as massive. In his view, China will one day become the anchor market for Asian tours. But don’t expect a big Chinese land rush for U.S. music companies. “There’s a big learning curve. It’s very relationship-driven — you can’t just come here and have instant success,” Krane said. “For any company entering China, it will definitely take them three to five years to start establishing themselves, especially now that there’s some early market entrants.”

LIVE NATION

Live Nation’s operations in the Far East include offices in Hong Kong, Singapore, Beijing and Shanghai that have promoted tours by acts as diverse as Roger Waters, the Cure, Christina Aguilera, Muse and Gwen Stefani. Live Nation also staged the 2007 Live Earth concert in Shanghai. The region is overseen by Live Nation senior vice president of Pan-Asia Colleen Ironside, who reports to Ridgeway.

Live Nation strengthened its presence in Hong Kong in January by appointing Luke Hede director of booking for Asia. Hede was previously with leading Australian promoter Dainty Consolidated Entertainment.

Ironside’s “agreement was to promote shows in Hong Kong and Singapore, and now she is booking shows into other parts of the region,” Ridgeway said. “At the same time we were looking at joint ventures with various cities in China.”

The latest news from Live Nation in the market is an agreement with Chinese company Cosmedia Group to manage Hong Kong’s new multipurpose outdoor Pop TV Arena (Zhong Tian Di). The 10,000-capacity venue in West Kowloon opens January 25 with a series of concerts by Chinese superstar Jacky Cheung.

Establishing relationships with local artists and promoters “is key in a market like China,” Ridgeway said. “Although some international acts go over there and are successful, the major part of the market is still very much the local artists.”

Even so, Live Nation has successfully promoted such acts as Waters and Il Divo in China. Opportunities for Western artists are improving, Ridgeway said, as the country becomes westernized, Internet penetration improves and international acts are discovered.

While Ridgeway and Live Nation view China as a market with great potential, “it’s just going to take some time for the level of interest in Western acts to build up,” he said. Competition in the promoter market will only improve artist paydays, he added.

AEG

AEG and its live entertainment division, AEG Live, have been venue-aggressive in the United Kingdom and Europe, and the same seems to hold true for their plans in China.

“Our drive is to consult, design, build and operate venues throughout China in addition to bringing an abundant array of programming options,” AEG Live CEO Randy Phillips said.

Ed Cunningham, formerly CEO of Clear Channel Entertainment Asia, is a veteran of doing business in China and oversees the company’s initiatives from Beijing. He has visited and evaluated more than 80 Asian cities and is in the process of determining the sports, entertainment and media projects that will form the foundation of AEG’s development in China.

Cunningham said China’s high concentration of young people (355 million people between ages 15 and 29) makes live entertainment a compelling business and marketing opportunity. He said that AEG will develop in China like it has in other international markets.

“Our arenas and entertainment districts in these leading cities are the culmination of years of strategic planning and discussions with the top political, cultural and business leaders of China,” Cunningham said.

AEG envisions a Chinese network of large-capacity arenas and entertainment districts comparable to those the company has developed in Los Angeles (L.A. Live), London (the O2) and Berlin (the O2 World).

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