Big money in comeback acts

Decked in matching three-piece suits, with dance moves perfectly in synch — albeit a little rusty — and tunes from yesteryear, comeback acts are doo-wopping back into popularity.

A trip down memory lane with the likes of Lionel Richie, the Eagles or the Stylistics can cost anything from R400-R3,000. Despite having no new material and being slightly past their prime, legacy acts are raking in millions from a loyal fan base.

This shows that SA’s live music sector is booming. According to PWC’s "Entertainment and Media Outlook: 2015-2019" report, live music revenue overtook spending on recorded music in 2014.

"The difference in fortunes for the two sectors will result in a widening of the gap in the next five years," says the report.

Live music revenue is expected to grow at a compound annual growth rate of 7.9%, reaching R1.5bn in 2019, from R1bn in 2014.

"The staging of live events is dominated by a small number of promoters, most notably global events company Live Nation, which operates in the country in alliance with local promoter Big Concerts," the PwC report says.

While Big Concerts, which was bought by Live Nation early last year, could not comment on the profitability of legacy tours, CEO Justin van Wyk says: "Legacy artists do very well in SA and abroad because the audiences that attend are mature adults who have more disposable income."

But if you’re not the size of Big Concerts, it’s a difficult industry to break into.

In 2010, Vinny Bisnath founded Dolphin Concerts. It seemed an easy business once he had got in touch with the right agents, barring a few big misses.

In the year the company launched, it announced a Whitney Houston and Akon concert to the media — despite a contract not having been signed. While Akon’s representative flew in for the announcement, Houston’s did not. Within 24 hours, Dolphin Concerts had received a cease and desist letter from Houston’s agent and was informed that it had been negotiating with a fake agent.

"We complied and the promoter thanked me for being vigilant and sharp, and asked me to be involved in all future negotiations, which I did," says Satish Dhupelia, a videographer who worked with Bisnath. "My rule was always to start with a video recording from the artist saying he was interested in dealing with us."

But the industry is expensive and, despite hard negotiations with concert venues and vendors for discounts, Bisnath carried the financial burden himself and didn’t always make a profit.

Dhupelia explains the mounting costs of bringing in a legacy act such as Kool & the Gang — it’s not all a celebration. Artists charge anything upwards of US$65,000 a show, excluding travel for the band and sound engineers, business-class tickets and accommodation and food.

"You’re still finding out what people want to see and are willing to pay for, and banking on the fact that it will sell," says Dhupelia.

Securing an artist is only the first step — the next is finding a reasonable but large venue, finding the right service provider and, finally, launching a relentless marketing campaign to get media houses on board to sponsor concerts in different cities.

"The challenge is balancing all these costs to create a decent ticket price and having funds to bankroll the concerts, as one only gets the funds from Computicket a few days after the show is over," says Dhupelia.

Golden Production owner Dalip Rajcomar started in the industry 17 years ago. Today he is feeling the pressure of being a small promoter in a big industry. "At the time it was such a small industry. You had maybe one act a year and business was good," he says.

The industry today is saturated with smaller show promoters, but many of them aren’t making money because the business isn’t as lucrative as it seems and the costs that go into it are high.

"Twenty years ago, the costs of the shows were low and it was economically viable. Costs have escalated and artists now demand huge amounts. It’s not a money maker," says Rajcomar. "Sponsors are not coming in because it’s expensive and the economy is bad."

Despite the risks, promoters are still flying in acts and bearing the financial burden to allow concert-goers to party like it’s 1999.

menons@businesslive.co.za