interviews

Official Charts Analysis: Clean Bandit raid singles chart top spot

Dethroned for the second time, Ed Sheeran's Shape Of You slips to No.2 (45,608 sales), as Clean Bandit rack up their third No.1 in total, and second in a row with Symphony. A collaboration with Swedish singer Zara Larsson, for ...

The modern age: Assessing the European arena market in 2017

One of the strongest indicators of the rude health of the arena market is the array of new competitors determined to muscle in on the action. Dozens of venues across the world have cropped up over the past decade, with others being transformed to keep up with the new standards of excellence. The UK is at the forefront of that charge. Liverpool, Leeds and Glasgow have all benefited from new state-of-the-art indoor facilities since The O2 opened in London in 2007. Bristol is set to join the club in 2020, and Aberdeen will benefit from a new 12,500-capacity AECC from 2019. According to Pollstar’s 2016 year-end rankings, The O2 was once again the busiest venue in the world, selling almost 1.6 million tickets last year. Manchester Arena (4th) and Glasgow’s The SSE Hydro (8th) also cracked the Top 10, selling 851,785 and 751,487 tickets respectively. Birmingham’s Barclaycard Arena was the next most popular UK arena, finishing 31st with 422,619 tickets sold. Other UK arenas to feature were The SSE Arena, Wembley (32nd), Birmingham’s Genting Arena (35th), Leeds’ First Direct Arena (38th), Sheffield Arena (57th), Newcastle’s Metro Radio Arena (64th), The SSE Arena, Belfast (67th), Echo Arena Liverpool (68th) and Motorpoint Arena Nottingham (144th). “I don’t think you can deny that the sector is in good health,” says National Arenas Association (NAA) chairman Martin Ingham. “We’re all trying to grow but, as is always the case with venues, it’s very much dependent upon the product that’s out there.” Established in 2001, the NAA represents 22 arenas across the UK and Ireland, operating as an informal industry body, sharing best practice and training in areas such as event management, health and safety, ticketing, customer service and accessibility. The 5,500-capacity Derby Arena became its latest member last year. Overall attendance dipped at NAA venues in 2016, drawing a total of 7,046,021 fans (averaging 6,482) to 1,087 concerts, compared with 7.7m people attending 1,111 music events in the previous 12 months. The average ticket price was £43.05. But 2017 looks sure to see a return to growth thanks to tours by the likes of Ed Sheeran, Bruno Mars, Drake, Take That, Iron Maiden, Linkin Park, Emeli Sandé, Metallica and The Weeknd. “When you look back at 2016, you would say it wasn’t quite as good as 2015. But what’s really interesting is how strong 2017 is looking,” adds Ingham, who is also CEO of Nottingham’s 10,000-capacity Motorpoint Arena. “Every few years you get the perfect year in terms of the number of great shows that are out there. There tends to be one really good year in every five-year cycle and perhaps one year that is the weakest, along with two to three standard years. “Last year’s figures were a little bit surprising.Every venue’s got a slightly different perspective but our 2016 was better than 2015, so we were slightly against the trend. But 2017 is looking like the bumper year in the current cycle.” Glasgow’s 13,000-capacity The SSE Hydro, which opened in 2013, has emerged as a mustplay venue for artists, attracting acts such as U2, Fleetwood Mac, Adele, Ed Sheeran, Taylor Swift and Beyoncé. Music shows account for 63% of its live entertainment business. Take That, Iron Maiden, Metallica and Celine Dion are among artists due to play in 2017. “The SSE Hydro has significantly transformed live music and events in Glasgow and Scotland,” says Debbie McWilliams, head of live entertainment, sales and ticketing at the Scottish Event Campus (formerly SECC) complex, which comprises The SSE Hydro, the SEC Armadillo (formerly Clyde Auditorium) and the SEC Centre. “Our extended SEC campus not only has a purpose-built, live entertainment arena, it has also had a substantial and positive effect on the calibre and profile of artists and events that we can now attract and deliver. Glasgow has always been rich in terms of diversity of talent across many genres of music. There are a number of excellent and atmospheric venues of varying sizes in the city, complementing the status of the SSE Hydro in Glasgow.” Naming rights partnerships now provide a key revenue stream for many venues. Earlier this year digital communications giant O2 agreed a 10-year extension to its contract with AEG for its continued sponsorship of The O2, a deal reportedly worth £125m. The SSE Hydro is named after its main sponsor, energy company SSE. “The structure of our relationship offers the opportunity for The SSE Hydro to target a ready-made SSE Reward customer base comprising a varied and engaged demographic which can enhance ticket sales,” explains McWilliams. “SSE has a talented team of sponsorship staff who work with the SSE Hydro team on event activation and promotions which adds value to the customer experience. These can range from ticket competitions, VIP upgrades and lounge access. Regular and robust collaboration and dialogue between the teams is valuable in that we get impartial and first hand feedback on how our venue is perceived outside the business.” Since 2014, SSE has also sponsored The SSE Arena, Wembley. “It’s a really good deal that works well for both partners,” points out John Drury, the 12,500-capacity venue’s VP and general manager. “We work very closely together and they’ve allowed us to invest in the building at a faster rate than we would maybe otherwise have done.” The north London venue boasts one quality that no amount of money can buy – decades of history. Opened as the Empire Pool in 1934, it originally housed a swimming pool last used for the 1948 London Olympics. It staged the annual New Musical Express Poll Winners’ concert in the mid 1960s, famously hosting The Beatles and The Rolling Stones on the same bill. Changing its name to Wembley Arena in 1978, it has welcomed legends such as David Bowie, Stevie Wonder, Abba, The Who, Whitney Houston and George Michael. “It surprises me how much the venue resonates with younger artists from around the world for that reason,” smiles Drury. “I always wait for that “Hello Wembley” moment. All Time Low, 5 Seconds Of Summer, Babymetal, they’re so excited to be here. To think that an 18-year-old in the middle of America or Japan gets that is quite amazing. It is properly world famous.” The SSE Arena, Wembley is the venue of The X Factor final and will host the 2017 MTV EMAs in November, only the second time the event will have been held in London. Upcoming shows include Bob Dylan, Weezer, Alice Cooper, Steps and Queen + Adam Lambert. “I’ve had conversations with agents and promoters recently who have said how much artists like playing the venue because even though it has a good capacity, it still feels intimate," adds Drury. "What I also like is the fact that there might be a tour that plays Academy-sized venues around the regions but steps up to a bigger capacity in London. That is what we’re doing with Weezer, supported by Ash, in October. It’s a strong show and the numbers are looking good.” Arenas in Manchester and Sheffield have operated without naming rights partners since 2014 and 2015, respectively. “The venue has had two naming rights sponsors [Hallam FM and Motorpoint] in the last 10 years,” notes Sheffield Arena general manager Rob O’Shea. “The fact we don’t currently have a sponsor is neither a positive or negative. The most important factors are that the venue realises the commercial value of what it brings to the table and that you have a partner that will add other value to the business. It is not just about sticking a name on the front of the venue; it has to be a mutually beneficial ongoing partnership.” David Armstrong, CEO of Coventry’s Ricoh Arena, echoes those sentiments. “The important thing is finding a partner who brings something to the equation,” he says. “That’s why our relationship with Ericsson is a strong one, because we’re building out something that benefits them, they’re showcasing and rolling out some of their cutting edge technology, and that benefits us as well because we can offer a better experience to fans.” The Coventry complex is uniquely placed as the site of both an outdoor stadium – the 40,000-capacity Ricoh Arena (home to Coventry City FC) – and the Ericsson Indoor Arena, which can house 12,000 standing and 7,500 seated and has hosted acts including Florence + The Machine, Catfish And The Bottlemen, Jess Glynne and hometown heroes The Enemy. “We would like to showcase up to one or two indoor events a month,” states Armstrong. “This year, we’re slightly less than one a month and we’d like to be pushing on for two a month. “Outdoors, we have a thriving stadium opportunity. We have Robbie Williams in June, we had Bruce Springsteen and Rihanna last summer, and we’re holding for some exciting artists next year. So outdoors, I think we’ll be very busy. Indoors, we want to get busier.” He adds: “I often describe us as the best kept secret in music. I don’t think enough people know about us. We’ve had some great gigs in the last few months – a sell-out with Catfish And The Bottlemen, for example, that was an absolutely fantastic gig.” One of the challenges facing the Coventry venue is its close proximity to Birmingham, one of only two cities in the country (along with London) to be home to two indoor arenas. “Often we will find ourselves in competition with the two venues in Birmingham, which are great, but they tend to be seated and suit a particular style of audience and event,” notes Armstrong. “We think we offer something a bit different. “It depends on the band a little, but I think you can do both [Coventry and Birmingham], particularly if you’re looking for that authentic standing experience. It’s a slightly different audience.” In operation since 1991, the 13,600-capacity Sheffield Arena can empathise with the pressures of local competition. The venue gained a Yorkshire rival in 2013, with the inception of Leeds’ First Direct Arena. “We have certainly felt the impact economically,” concedes O’Shea. “Any new arena of any size affects the whole market, but at the same time it stimulates the market and requires you to up your game to keep and grow your own business.” O’Shea is anticipating a strong year, with a string of high-profile sellouts on the cards. “2016 featured Ellie Goulding, Little Mix, 5 Seconds Of Summer, The Vamps, Bryan Adams, Busted, Lionel Richie, Andrea Bocelli, Nickelback, Justin Bieber, Bring Me The Horizon, Rod Stewart, The Human League and Madness,” he says. “In 2017, we already have a number of sell out shows: Drake, two Olly Murs shows, The Who, Bruno Mars, Iron Maiden, two Take That shows, Kings Of Leon, Jeff Lynne’s ELO, Green Day and three Little Mix shows. “The arena provides a flexible venue for acts, whether they are performing to a reduced 3,500 capacity or the full 13,600. The floor standing capacity of 5,200 caters for those shows that want to have the biggest possible percentage of audience standing to create the best atmosphere.” Six NAA venues are also members of the European Arenas Association (EAA). The 36 EAA venues attracted in excess of 17m people to events in 2016, averaging 6,120 people per show. Among those members is Switzerland’s St Jakobshalle in Basel, which can count The Cure and The xx among recent performers. The arena is undergoing an extensive refurbishment, which will increase its capacity from 9,000 to 13,000. The renovation started in April 2016 and will be completed in October 2018. “Switzerland does not have the same place in the music business as England, but it is still competitive,” suggests MD Thomas Kastl. “The Swiss are very music-loving people and are willing to spend money for good concerts. Every big artist makes a stop in Switzerland. “The country is very popular with artists due to the high price segment. The artists also appreciate the high safety standards. After our reopening in 2018, we are trying to get more concerts back to Basel. Our focus is on increasing the number of concerts in future. “Our multifunctionality is our biggest USP. We are able to carry out several major events at the same time.” On that note, The SSE Hydro’s McWilliams predicts arenas will stay ahead by diversifying their content. “I am confident we will see events in emerging markets make a stronger move into the arena space,” she says. “We are seeing significant growth in country music popularity and ticket sales. An example of this is demonstrated in the Country 2 Country festival. Historically, we hosted this event in our 3,000-capacity SEC Armadillo venue over a weekend. This event has now moved into The SSE Hydro, with the potential to play to a much larger audience. “There is also growth in sporting events. Andy Murray Live was very successful in 2016 and is returning this year. UFC is also making a return to our venue in 2017.” Sheffield Arena’s O’Shea says: “I feel there will be a rise in digital collaborative events, e-gaming, vloggers etc. Something that is still in its infancy is a move towards self-produced or promoted events and co-promotions with established promoters, a move which certainly requires a great deal of caution but may well increase in coming years.” “It is no longer just good enough to rely on musical artists, we’ve got to look at a wider range of events,” elaborates the NAA’s Ingham. “We are also seeing arenas becoming more innovative with regards to their configurations. They are now working smartly to offer capacities of 4,000-7,000 for some shows, rather than the full haul, which hopefully encourages promoters to take a risk on coming to an arena rather than a concert hall.” He continues: “Venue operators have got to make their assets work harder because, make no mistake, the costs of running a venue are increasing dramatically. We’ve been absolutely clobbered by business rates increases. Arenas are seeing huge increases, up to 45-47%. You’ve also seen a 10% increase in the national minimum wage over the last 13 months. “The vast majority of venues don’t make huge profits and we’ve got to find a way to get that money back, ultimately, from the customer.” “These are expensive buildings to run,” concurs Wembley’s Drury. “But ultimately, it all comes down to content and having as much content in the building as often as you can. If you have cornerstone events in the diary each year to get you going, that’s even better.” The level of new talent does at least provide some reason for optimism. A recent Music Week investigation revealed a record number of new UK arena headliners were crowned in 2016. Nineteen acts - including Adele, The Libertines, Jason Derulo, Tame Impala, Foals, Macklemore & Ryan Lewis, Rudimental, The 1975, Years & Years, Babymetal, Catfish And The Bottlemen, Bastille and Jess Glynne - headlined a major arena for the first time last year. “There are still artists coming through,” asserts Ingham. “We had The xx play to nearly 9,000 in February, sold out, and they’re a band who had never played the arena before. Every year I look at the number of artists who have come through our venue, there is always a significant number who’ve never played us before and the vast majority of those are up and coming.” Sounding a confident note for the future, he adds: “Whether it’s a Bastille or The xx, there are always those artists coming through. We can worry about whether any of them are going to have 40 to 50-year careers like Queen and The Rolling Stones etc, but the reality is that as long as there are enough of those new bands coming through, there’s no reason to be pessimistic in any way, shape or form. I’m optimistic that the next few years are going to be as good as the last few.”

The Big Interview: Phil Moore

Compared to, say, Spotify or Apple Music, Deezer’s London office is rather unassuming – and not quite as easy to find. It’s round Shepherd’s Bush way; the word ‘mews’ is in its address; you can hear birds singing. It’s on the map, of course, it just doesn’t leap out at you; it’s not highlighted in bold. When you lift your head up and look around, however, you realise you are just a couple of corners - and about 10 minutes - away from Kensington High Street, from the biggest record companies and labels in the country. Deezer, in short, has a shorter journey to the heart of the action than you imagined. In market share-land, again, it seems to be on the fringes. It claims a global paid subscriber base of 10 million. And with recent figures putting the worldwide total of paying streamers at 100m, the maths isn’t hard to do. But, the same Midia research that pinpointed the breaking of the 100m barrier declared, at the time, that Deezer commanded a 6.9% market share. So, 10m/10% or pretty much 7m/7%, Deezer would, to differing degrees, be seen as a distant third (Spotify recently passed 50m and Apple Music is closing in on 25m). But, again, there lurks the possibility that co-ordinates need adjusting, that we’re not in the remote suburbs, but an up-and-coming, potentially rather smart and desirable area. As for the company itself, without a trace of estate agent-ese, it claims that in the not too far future, its address will be No.1 – the leading global streaming company. Having joined Deezer as recently as August last year, Phil Moore certainly seems very much at home at this expanding enterprise already. He began his career in retail, progressing quickly to a senior management position at Sainsbury’s. He then plunged into the mobile phone business in 1992. Across nearly 25 years he worked for networks and hardware companies, but, he admits, especially since Apple blanded the hell out of handsets, “spent years trying to get out of phones”. His escape hatch was opened by Deezer, where he is now VP Northern and Southern EMEA. He knows his experience in the mobile channel will have been key to securing the post, but is also happy to lay out his credentials as a bona fide music obsessive. “I’m a music nut. I have a couple of thousand-strong vinyl collection at home. I rock a very nice VPI Signature turntable. In terms of preferences, I’m an electronic freak. The band I would most often choose to listen to at the moment is Above & Beyond. Everything they release is amazing. I’m also a classically trained flautist, so on a Sunday morning there’s nothing better than sticking on a bit of Mozart.” Our relatively new friend’s eclectic, then. He’s also passionate, ambitious, forthright and confident. And happy to tell Music Week why Deezer is on the slightly-tucked-away, but well-worth-finding road to somewhere… Can you give us an update on Deezer’s subscribers?  Sure, globally we have in excess of 50 million freemium subscribers and just over 10 million paying subscribers. How many of those are in the UK? We don’t break our numbers down by territory, but I can tell you in my territory, North and South EMEA, we have been more than doubling the business every year for three years. That applies to the UK as well: more than doubling the business, in terms of paying subscribers, every year for three years and on course to do it again this year. That can’t continue though, right? Why not? Isn’t it something to do with the old conundrum of grains of sand on a chessboard? Well, streaming’s the fastest growing section of our industry and I think, as the products and services improve, and our customers’ understanding of what streaming is and how it works improves, there will only be more growth. Even given streaming’s current levels of growth, if you’re doubling every year, Deezer is outperforming the market. What do you put that down to? Product differentiation. Coming in from the outside, this is quite a strange industry, because we all pretty much have everything. In the VOD space, if you want all your box sets, you’ve got to have Sky, Netflix, Amazon etc. But us, Spotify, Apple, we’ve got it all so we have to differentiate on the proposition. How do you differentiate? What we have is a lean back experience. My wife, for example, is very much not a techie person; she’s probably only ever downloaded three or four apps onto her phone and doesn’t really interact with it very much. So she loves the fact that with Flow [Deezer’s personalised playlist generator], you just press one button. You don’t have to create playlists or subscribe to playlists or select playlists, you just press a button. Once. When you sign up to Deezer, we ask you some questions about what genres you like, what artists you like and what tracks you like; that builds an algorithm that starts to ‘Flow’ your music, and the more you use it, particularly liking or skipping tracks, the bigger and more sophisticated that algorithm becomes and you simply get a constant flow of music you’ll love. What we’re concentrating on now, and the great thing about our TV commercial this time round is that we’re telling people what Deezer is, what makes us different. We also have unique football coverage in there, we have the rights to Talksport and the rights to the English Premier League across Europe. We’re also doing audible books in France and Germany and looking to launch in the rest of EMEA in the next month or two. Primarily we don’t do video, just audio, because there are guys out there who do video better than we do, but when we do Deezer Live sessions and we capture some exclusive content that amplifies our catalogue and gives our customers more of what they want, then we will broadcast that. Going back to Flow, for some people, that passive approach will not be attractive, of course, they want to get more involved. You can do both. You can lean back or lean in. You can create your own playlists, you can follow our curated playlists or other users’ playlists, you can share your playlists. You can get as involved as you want and there are more features than you can shake a stick at. But, you can also, with one press of a button, get that constant flow of music you love. What are your flagship playlists? What sort of numbers of subscribers are they attracting and what sort of industry engagement are they generating? The engagement is huge. Dominic [Wallace, UK music editor and former music programmer for BBC Introducing] spends three days a week with labels, talking to them about the latest artists and releases coming down the pipe so that we can pre-load them into the most suitable playlists. We get in excess of 100,000 subscribers for our leading UK playlists. Do you get a sense of who a Deezer customer is compared to a Spotify or Apple Music customer?  I think the cards have yet to fall on that one. We analyse our churn and we segment our user base very carefully, but when we look at why people do leave, the vast majority are just going across to the free service. There are some people, of course, who will only ever use Apple. With Spotify it’s a tough one, because, apart from the brand being well known, I’ve yet to see where and how they actually differentiate their product. Nevertheless, Spotify is No.1, Apple Music is No.2 and then there’s quite a bit gap. Is it possible for you to close that gap or is the ambition to build a sustainable business at three or four? Oh hell no. No, we have aspirations to be market leader. It’s a big, growing market and there’s a long way to go. We’ve seen some of the smaller guys struggling and suffering because the proposition isn’t right, it was maybe either too niche or too targeted. We’ve seen that happen with the likes of Napster and Tidal. From our point of view, we’ve expanded very significantly geographically [Deezer is available in 182 countries; Spotify in around 60; Apple Music close to 120], we’re now investing in the product and making sure we have the best possible proposition. That will accelerate us away from where we are now and ultimately allow us to overtake our competitors. As a sector, 100 million plus paying subscribers might once have seemed like an end game. How do you view it now? I think what we can all see now is that streaming gives us the chance to take the industry to the next level. With the advent of good 5G networks, especially in countries like the UK and Germany, where you can always be connected, and with things like voice control and wearable tech, there’s no reason I can’t get access to all the music I want, whenever I want, wherever I want, how I want, and consume it my way. That is brilliant for the industry because, guess what, it’s brilliant for the consumer. How do you think this quite intense period of competition in streaming will pan out generally? I think there will always be amalgamation in every new industry. I think there is room globally for seven or eight players and then some more local ones. But, I don’t think we’ve seen the last of the big entrants coming in with big cheque books, buying up some of the smaller or medium sized players or just going for it themselves. I think we’ll see some people who haven’t got the proposition right moving out and then guys like ourselves moving up and moving forward. How do you set about converting freemium to paid?  The ad-based model is successful, but obviously we want our customers to be Premium+ users, we want them to experience the full range of services we offer because then those customers become a lot more sticky and their average daily use goes up. We use B2C marketing, digital advertising and a lot of in-app pushes. As soon as someone downloads the app we push the message, This is what you get at freemium, and this is what you get at Premium+. We also push the Family Plan, which is £14.99 for six accounts and is, quite honestly, ridiculously good value. In the telco space these sort of offers would be two or three for the price of one; this is six for the price of one-and-a-half. We also offer a 15-day free trial of Premium+ when you sign up to freemium. We find it’s like Sky: everyone starts with the minimum package and then, by the end of the month, when you’ve seen how good it is, you subscribe to everything. We get them in, we get them using the product, we give them great offers and they very often decide, You know what, I can’t live without this and I’m happy to pay full price for it.  What is the Deezer view on exclusives in the streaming space?  We don’t like them and we don’t think they’re good for the industry. They make it less about what’s good for the consumer and more about the commercial concerns of an individual company. It comes back to the VOD thing: if I love my American box sets I could end up spending pretty much £250 to get the lot; that’s not a situation we should welcome. Music is a passion and we’d rather our customers have access to everything. What about a more generic form of windowing, not company specific, but keeping content off freemium tiers for a period after release?  Weirdly, customers are more used to that, they get that, I think, so as a company we have less of an issue around that model. What was the thinking behind [emerging artist promotion platform] Deezer Next? We asked ourselves: what do we stand for? And as a result of that we concluded that the one thing that is the key to the success of the music industry is that it’s always re-inventing itself and it’s always fresh. And it only does that through new artists coming through. So, we decided that we were going to champion new artists through Deezer Next [launched in January 2017]. We pick three global artists and a host of local artists in Germany, France, the UK, the US and South Africa and we drive them harder, put them on playlists, promote them on our service, encourage new talent, give customers what they want but also give artists and labels what they want so that they see streaming as even more positive than just the numbers. And we’re off to a great start: Rag’N’Bone Man, huge; Anne Marie, huge [they were two of the first three globally promoted artists. The other was Maggie Rogers, who is now signed to Polydor]. What has the reaction been like from labels? [They] love it, completely love it. They’re now clamouring for us to do more with them, it’s really starting to accelerate. Has your role at Deezer been partly to be more industry-facing? Yeah, we have a strategy in my territory now where we partner. I think a lot of the B2B deals and the label deals and the relationships with artists in the past have not been win-win. My mantra is all about partnerships and win-win. We want artists and labels to get as much out of what we do as we do. We now have regular meetings, we share our data and we push the partnership approach across everything we do. What have you learned about Deezer since you joined the company? At a couple of companies I’ve worked for, the standard answer has been, No – and not only that, I don’t really care what the question is. Here, the answer is Yes, what’s the question. If something is broke, fix it, even if something isn’t broke but isn’t as good as it could be, fix it. Improve, improve, improve. Everybody has bought into that mentality. We want to succeed and there is a passion in this company to be the best and most successful at what we do. We have the right structure, the right strategy, the right product and the right proposition and we definitely have the right mentality. And with the backing that we have from Access Industries and Orange [both major investors in Deezer], we have the financial clout to be able to take this to the next level. And what about the industry as a whole? It’s been great, but as an industry I think we’ve yet to fully embrace new technology. We don’t shy away from it, but if we properly embrace it and drive it, we will be able to allow more customers to consume more music, more often, in the manner that suits them.

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