Author: Nepthys Zwer
Economic concentration in the cultural field is now the main threat when it comes to freedom of creation, diversity of programming, and pluralism of expressions. While France, Italy, or Belgium are going through dangerous times of extreme concentration both in the media and cultural sectors, the focus is set on Germany’s music industry here. Let’s take a closer look at CTS Eventim, Germany’s overshadowing giant.
Today, streaming has replaced recorded music as a source of income for creative people in the music industry. Performing live at festivals and concerts is almost compulsory. In Germany, live music has become the locomotive of the music market, and online ticketing has grown accordingly. Selling tickets online is a strategic advantage for those wishing to conquer this market, as is the case with CTS Eventim. The example of the German ticketing and live entertainment giant gives us an idea of the dynamics of economic concentration in the music industry worldwide. Small players and independents find themselves powerless in the face of large private groups that use their financial clout to establish a monopoly position. The live music industry is becoming their cash machine.
Anyone interested in the phenomenon of concentration in the music business will find themselves lost in an inextricable network of subsidiaries and partners with related or competing activities, diverse and changing statuses and headquarters, and cross-shareholding models. Our infographic shows, in simplified terms, three facets of Eventim’s strategy: its stranglehold on festivals, its policy of buying out or taking over competitors, and how, from its online ticketing business, it can roll out its services to players in the sector. This horizontal concentration (by absorbing the competition) is therefore coupled with vertical integration (with control of the value production chain) and diversification, with the management of artists and the support and marketing services offered to market partners and consumers (booking, marketing, sponsorship, etc.).
A discreet ubiquity
Today, the lucrative festival market is gradually recovering from the Covid crisis, which saw a mass cancellation of performances in 2020 and 2021. Although each festival has its own identity, there may be a single player behind this variety: in Germany, it’s mainly Eventim. The group not only produces festivals, but also operates two major venues and expands all over Europe and the world.
The diversity of its activities means that it can easily absorb market risks and make economies of scale and organisation, for example by offering twin festivals or using the same venues for several festivals, such as the Weissenhäuser Strand on the Baltic Sea (Plage Noire, Metall Hammer Paradise, Rolling Stone Beach).
Following a similar logic of absorbing competitors, Eventim has bought out or taken a majority stake in several concert agencies, some of them renowned, such as Marek Lieberberg Konzertagentur. It has absorbed their portfolio of artists as well as their customers. This allows it to cover the field of classical music for example. Some of these agencies are dedicated to a single event, while others, like FKP Scorpio, manage dozens. In a veritable game of musical chairs, the same live music professionals can be found in all the arrangements, with no hesitation in moving from one competitor to another.
This stranglehold not only stifles competition from players with less financial clout by preventing them from entering the market, but also has effects at all levels of artistic production. Among artists, the stars are treated better because they guarantee full venues, but all artists have to accept exclusive contracts for their tours and performances. Because they attract ‘rising stars’, the majors pre-empt innovations. The diversity of musical aesthetics is diminishing, as productions must satisfy as many people as possible. In a system designed to maximise profitability, seasonal staff are just another cost factor, condemned to insecurity. At the other end of the scale, rising ticket prices are forcing consumers to give up small festivals.
In the space of just a few years, Eventim has become the music industry’s ‘bouncer’, leaving no room for independent creatives and distributors who don’t want to join forces with this major. In a never-ending spiral, the group is consolidating its profitability and competitiveness. The only competition to be feared is that of large holding companies such as the American Live Nation, which also combines ticketing and live shows, and deploys exactly the same monopolistic tactics.
The winning ticket
Eventim has been able to build its empire on a technological advantage: online ticketing. While live entertainment generates its biggest turnover, it is ticketing that gives it the biggest profits, with over 200,000 events put on sale every year. Its ticketing system is even used by its main competitor, Live Nation.
Today Eventim is Germany’s first and Europe’s third-largest ticketing and live entertainment company. In 1996, the Konzertagent Klaus-Peter Schulenberg bought the Munich CTS company. In 2000, it was introduced into the stock exchange. Today, its market capitalisation is close to € 6 billion. The group is also present in 15 countries through 34 companies. In 2022, it will have achieved sales of €1,924 billion, an increase of 372% compared to 2021.
Eventim has also bought out its competitors in the ticketing sector. Its Frankfurt am Main computer centre manages all online orders, but the company also subcontracts from consumer distribution outlets. Here too, the platform, because it automates commercial operations, is killing jobs.
To be at the source of the value chain through a platform is to have control over the market. This explains the success of Uber, AirBnB, Booking, etc. Consumers, because the tool is so practical, end up destroying the alternative offers themselves. At the same time, Eventim has a huge database of user behaviour at its disposal for marketing purposes. Data mining is unstoppable when it comes to understanding and capturing the market.
This horizontal concentration is coupled with vertical integration. Eventim has gradually diversified its products and is now present across the entire value chain in the fields of culture (music, cinema, museums) and sport. It sells companies, clubs, and associations its expertise and software solutions for business-to-business services: ticketing (including self-printing), event security, customer relationship management, merchandising and marketing, and can provide its own distribution and communication channels. Customers can use a secondary market platform (fansale) for fan-to-fan resale and use its one-stop-shopping services to buy tickets, travel, and accommodation.
This diversification makes it possible to spread the risks between the various activities and gives Eventim particular flexibility and responsiveness. As a result, Eventim is able to establish itself even more widely in the music industry.
David against Goliath
The music industry generated sales of €2 billion in Germany in 2021. The phenomenon of the concentration of culture among a few majors also applies to other branches like labels. The 3 world-majors dominate national markets through their local subsidiaries. In Germany, these are Universal Music Group Deutschland, Sony Music Entertainment Germany, and Warner Music Germany. Smaller labels are attached to them. The independents must make do with crumbs.
In the music sector, competition is now played out at international level, even between players from outside the sector, such as the media. As far as live music is concerned, Live Nation set foot in Germany in 2015 and Eventim (100% German) is happy to raise this threat with the authorities. In a globalised market, the company is a valuable economic player for the country. This explains why the German government generously subsidised this giant of the sector during the pandemic with substantial aid of €272 million. This also explains the European and national tax policies that are so advantageous for these groups.
The company therefore has all the cards it needs to pursue its growth with complete peace of mind. The Bundeskartellamt is powerless to intervene in its strategy of creating new companies when it is refused a merger (for example, in Berlin, when it created All Artists Agency only to ‘absorb’ Four Artists Agentur). Scandals (such as under-the-table ticket sales during the football World Cup) are settled by litigation. Revelations such as those by comedian Böhmermann in his programme “Magazin Royale” or those in the investigative journalism series “Dirty Little Secrets” may have caused the holding company’s share price to fall, but they are unlikely to change the situation.
What is left for the other players in the market to do in spite of everything? The State clearly has a role to play, for example through a policy of subsidising small festivals. But it is certainly the self-organisation of independent players, as enabled by the VUT (Verband Unabhängiger Musikunternehmer) or Reset! network that will make it possible to alert the public to the situation, unite forces, and bring about a dynamic that defends the independence of culture.
Music is the second largest sector in the media industry, with live music accounting for a third of sales – Goethe Institute
CTS EVENTIM is a leading international provider in the Ticketing and Live Entertainment segments – EVENTIM
Eventim: Von der Musik zur Maut – Capital
Mit Fantasiegebühren zum Eventimperium – ZDF Magazin Royale
Folge 3: Die verschwundene Firma – Dirty Little Secrets
Nepthys Zwer is a cultural historian and counter-cartographer, specialised in the Isotype graphic information system. She founded and runs the independent website https://www.imagomundi.fr/. She is the author of Cartographie radicale, Explorations (2021) and editor of Ceci n'est pas un atlas! (2023), a translation of This Is Not an Atlas! by the orangotango+ collective.