Producers on ticket fear, Morgenstern's money and concert cancellations

Music producers Iosif Prigozhin, Yana Rudkovskaya and Igor Matvienko told RBC how much artists lose without concerts,why show business cannot reach an agreement with the authorities and what prevents the export of Russian content

For the first half of 2021, about 1-2 thousand concerts took place in Russia, the figures for the pre-pandemic 2019 in six months were 40-50 thousand. The turnover of the concert industry collapsed by about 85-90% compared to the results of 2019: then in the first half of the year, it was 110-120 billion rubles, of which 85 billion came from private business, the rest - from budget events (city days, forums and state concert venues). According to experts, now the audience has about 5 million unsold tickets worth about 8 billion rubles. All of these events have been postponed due to the coronavirus.

How much the concert industry is losing due to the pandemic and what musicians are now earning, RBC was told by producers Iosif Prigozhin, Yana Rudkovskaya and Igor Matvienko.

“People are afraid to buy tickets”

- Mass events have been stopped almost throughout the country. New data on the increase in the incidence of COVID-19 appear every day. Sanitary and epidemiological standards have been tightened in St. Petersburg . How is the Russian music business developing in the context of the ongoing pandemic?

Iosif Prigogine: Everything is absolutely unstable. People are afraid to buy tickets. It seems to me that people who give orders for mass events do not understand how this business works. It's not just renting a hall or selling tickets. The organization of the concert is logistics, which is planned for six months or a year. In this logistics, there are things that cannot be canceled.

What rights do customers have

Government Decree No. 830 dated June 6, 2020 canceled the client’s right to a refund for tickets to events postponed due to the introduction of a high alert regime in a particular region due to a pandemic. When transferring concerts, the previously purchased ticket remains valid for the new date.

There is no economy at all even in the 50% hall. The gross collection from ticket sales forms the entire budget of the event. Let's take the concert theater "Cosmos" in Yekaterinburg. There are 3 thousand rubles. average ticket price. Multiply this by 50% of the occupancy of the hall (the capacity of the large Cosmos hall is 1924 people, respectively, the average profit from the sale of half of the tickets will be 2.9 million rubles -). From here you subtract flight, transportation, hotel, per diems. You subtract the rent of the hall and equipment, the advertising campaign. If we are talking about female artists, then there are additional costs: the girl needs a make-up artist, hairdresser and stylist. And finally - the fee, which includes the salary of the team. What kind of profit can we talk about here? In addition, the artist must be present at various shootings for TV channels, Internet projects. However, many shootings are not paid. The artist himself invests in his appearance on the screen.

Yana Rudkovskaya: While we exist in limitations. The reality is that we have 1,500 seats at the Ice Palace in St. Petersburg (the capacity of the site without restrictions is 12.3 thousand people. -). We do not understand whether Dima Bilan, for example, will have a concert or not, or Evgeni Plushenko will have his show "Union of Champions". In Moscow, the situation is still stable. We sell 75% in Crocus. But in any case, we have been suffering losses for the second year already. Many regions have been lost, especially St. Petersburg, which is still in question. Gathering 15% of the audience in the Ice Palace is not profitable for anyone. In order for the hall to pay off, it should be 80-90%. If there are restrictions now, we will postpone everything to April.

Igor Matvienko: It is impossible to talk about business development at all. We can only talk about his survival. I believe we are the #1 industry hit by the pandemic. Even tourism suffered less damage. The numbers are not for me, but I see the big picture. Restrictions apply to public events. Everything works: restaurants, shops, tourism. But it is worth a little worsening the situation - immediately a blow to mass events. I do not know what it is connected with.

“Our industry now is a swan, cancer and pike”

— Is the industry in dialogue with the authorities about easing restrictions?

Joseph Prigogine:Our industry now is swan, crayfish and pike. Everyone has their own interests. There is no one leader who would be respected, who would be considered and who would consolidate everyone. Moreover, I will say exaggeratedly, but here everyone hates each other. Therefore, there is no one to conduct a dialogue with the authorities. We do not have a musketeer approach, there is no guild solidarity. Sergey Shnurov, for example, is doing well, he performs in the entertainment genre, sells obscenities and receives a fee of $ 200 thousand. What does a pandemic mean to him? He worked four or five gigs, took his million dollars a month, and it seems to him that everyone has this. If we are talking about classical music, subsidized, with state support, then they both received a little and still get it. But not all artists have a colossal name, like Kirkorov, Valeria, Meladze or Agutin. Their brand is already formed, it will be different at different times, but in demand. And there are people who do not yet have a brand, who have just begun to invest in themselves. The pandemic has slowed them down.

Yana Rudkovskaya: This is a double-edged sword. Last year we held Swan Lake at 25% and went to zero, but at least we gave people jobs. This year we are making a new Nutcracker, and so far we have VTB Arena planned at 50%. At the same time, we will remain at least in some plus. For us, a 50% boarding is better than a COVID-free system (under which the organizers can sell all tickets, provided that visitors are required to present a QR code. -). For many, taking a PCR test is additional money to the ticket. The family, for example, will have to pay plus 5 thousand rubles.

Igor Matvienko: There is an Association of Concert, Theater and Ticket Organizations, headed by Nadezhda Solovieva. They are trying to do something. But there are no particular preferences for our industry. Now Vladimir Putin has lowered the VAT for the tourism industry. The same could be done for culture. Especially for concert activities, especially for commercial structures. It's easier for those on a budget. But commercial organizations do not have any replenishment at all.

- What do performers earn now?

Iosif Prigozhin: Advertising and corporate parties. But corporate parties are either casual events or planned weddings and birthdays. It's not a mass audience. And there is a question of taste of the customer. Often it does not matter to him who sings with him, he just needs an actual artist with a dance repertoire. People have fun and forget. By the way, the cost of a corporate party has grown by an average of 30-40%.

Yana Rudkovskaya: Thanks to corporate events, we have evened out the balance. And, of course, streaming, YouTube. Copyright and related rights bring in a lot of money. It is now well monetized. All great artists live normally. Those with provincial-scale events suffered.

Igor Matvienko: On streaming. Not all artists work at corporate parties. There are different genres: jazz, rock, hip-hop, rap. I can’t say that these performers are expected at corporate parties. Advertising is also irrelevant. Young artists are not guided by this, it is closer to bloggers.

— How do artists work with streaming services?

Iosif Prigozhin: Platforms have begun to bring in much more revenue than radio, and young people are mainly focusing on them. Here the scheme is simple: the number of plays is multiplied by money. There is a certain budget for each service, which is distributed among the performers. Relatively speaking, you can be played 100 times on the radio, but you will not earn anything. And if you were listened to 100 times on streaming, it will return to you in the form of money. Young people listen to radio much less. If you get into a taxi, your radio is not playing, but, for example, Morgenstern, which you turned on by connecting via Bluetooth. And Morgenstern sees online how much money fell to him at that moment. And the task of such artists is to stream them listened to as much as possible. I think one Morgenstern single per day will allow him to earn $ 2 million on streaming alone. But there are those who will receive 20 million rubles per month. Adult artists are not streamed as much as youth.

Yana Rudkovskaya: The streaming system is built in such a way that when you get into the charts, including in other countries, you get money. Such services now bring significant income to artists.

Igor Matvienko: Streaming is, perhaps, the main income in the current conditions. For a certain group of artists - the only one.

“How can Russian-language music be in demand?”

— What are the export volumes of Russian music?

Joseph Prigogine:We do not export music. There is an import, grandiose. We listen to Western music, which they do at the highest level. And our performers only make a copy of it - rap, hip-hop. Nothing is created. Who needs us? Both politics and business influence here. On what basis should we export? Are we making music that can be repeated in the West? No. Plagiarism. We export only classical music and classical artists. Yusif Eyvazov, Anna Netrebko, Eldar Abdurazakov, Valery Gergiev, Yuri Bashmet, Denis Matsuev. These people are exporting. Everything else is local consumption. There were export things, tATu, Gorky Park, for example. But they did not take advantage of their success, quickly ended their careers. We export artists, galleries, theater, ballet - also mostly classics.

Yana Rudkovskaya: There is export, of course. Bilan, for example, is listened to in other countries. These are Kazakhstan, Ukraine, Belarus, Uzbekistan, Estonia, Latvia, Lithuania, Eastern Europe. These are not the same income as from Russia, but still.

Igor Matvienko: What kind of export? It is possible through streaming, YouTube channels, and we are talking about Smeshariki or Masha and the Bear. If this can be attributed to show business, then this is all our exports. Music is not. How can Russian-language music be in demand? Unless some of our fellow citizens who live abroad will listen. But it is impossible to talk about any trend.

“Many artists left the profession”

- Tell us by your own example, how do musicians and producers manage their finances now?

Joseph Prigogine:I do not have risky assets that would make me dependent on the banks. I tried to shape the economy of my family in such a way that in case of a crisis we would not have debts. In terms of work, Valeria and I complement each other. I am responsible for the business component, she is responsible for creativity. We had a big consumable associated with video, with recording in the studio, with buying clothes for performances. Now it's all minimized. There are fewer songs, videos. We began to save, place funds in the form of deposits, for example. In addition, rental business, securities. It helps us get through the pandemic. Previously, our team was assigned to us permanently. Now we allow them side jobs. If Valeria does not have a concert today, the team can perform with another performer. I want to emphasize that I have not fired a single person.

Yana Rudkovskaya: Dima Bilan has a lot of corporate events. They give us the opportunity to normally and still earn. I will not give advice to anyone. The only thing I would like to urge the organizers of the concerts to comply with the mask mode, control it, because carelessness in relation to everything only leads to tightening of restrictions.

Igor Matvienko: It's better for musicians now to focus on creativity, on composing something new, while there is an opportunity. Then, if you are very lucky, the result will be able to feed the artist and his family.

What is your forecast for the end of the year?

Iosif Prigogine: Take the Kremlin Concert Hall. It was closed throughout the year. Its rent costs about 1.25 million rubles. Yes, it is supported by the state, but it used to be self-sustaining through rent and tickets. And now he is forced to remain on subsidies throughout the year, that is, on the shoulders of the state. Or sports grounds, such as VTB Arena, ice palaces, they are also forced to stop events. They will survive either at the expense of the state or at the expense of loans. The industry is deeply credited. Take any private concert hall. Crocus City Hall, for example. 100-150 people work there. Plus all those who come to do a specific concert. A total of 500-1000 specialists work in one hall every month. All these people are left without money.

In addition, we have a huge number of halls built or taken on credit. The average hall costs $30-60 million, 2-4 billion rubles. Let's say you are a great friend of the bank and you were given a loan at 10%. Your interest on the loan is 200 million rubles. The hall on rent receives 30–35 million rubles. per month, this is 350-400 million rubles. in year. From this amount, interest on the loan is deducted. There is also the body of the loan. And the remaining difference goes to exploitation. Now imagine that all this has not worked for 12 months. How to pay? The question is open.

Yana Rudkovskaya: We must adapt to the current situation. We have already realized that the coronavirus will not pass. One wave will find another. It is clear that we have vaccinations everywhere, it is clear that all normal people got them, plus there are those who have been ill. But for now, this is how we work. Yes, show business suffers the most. St. Petersburg especially upsets me. There are practically no events.

Igor Matvienko: Little will change by the New Year. It all depends on the situation with the pandemic. Of course, people missed the concerts. If the coronavirus starts to decline, then slowly our activities will be restored. But very slowly. Some things simply cannot be returned. Many artists have left the profession altogether. Now musicians even work as taxi drivers. Usually, after crises, as was the case in 2008 and 2014, it takes two to three years for the industry to recover. And entertainment will be the last thing to recover.