Rage presented by G & G productions
... Q & A Greg Walsh
1. What are sponsors and brands able to gain from live music events?
Live music sponsorship is a big business globally and in South Africa it's valued at around R350m annually. Whilst well shy of sport, it seems to be growing at the expense of sport sponsorships. The big trend shift in the last 5 years has been a movement from the traditional "Brand A presents Artist B" to a keen interest in the music festival space. Festivals have opened a whole new kind of communication platform to brands.
Rage Festival is a particularly great example. 55% of the festival revenue comes from corporate sponsors and as an operational entity we've had to adapt our business model to be corporate focused as we are consumer. The process has made us more "Ad agency" than "event promoter."
The upside to brands from a festival like Rage Festival is enormous. For starters, the audience is locked into the Rage brand and story from 14 months before when they start booking their accommodation and festival Passports. This means brand can create clever social / digital media campaigns which have a much higher than usual response rate due to the nature of the excitement. The on-site activation opportunity is also immense. 60 events in 8 days, plus 7 partners hotels, beaches, transport busses and more. Brands can literally spend 10 days with the consumer! Eat, Sleep, Rage, Repeat!
2. Are big events and festivals taking customers away from music venues?
Music venues appear to be dying a sad death indeed. The clubbing scene is almost all but dead. It's not just music events and festivals.. Their are tons of new trendy bars and restaurants filling that "party" feeling. The world of craft beer, craft gin, boutique wine and whiskey events etc is all having its impact. In the music space, we get the sense that it's not a case of less consumers or less spend, it's simply a case of a much longer list begging for share of pocket.
The integration of music venues into the live music economy is a tough one. The sense we get is people aren't that into clubbing or rock halls etc. They want experience and experiential. South African's also aways want what's new. "I've been to that club before, I'd rather hit this pop up tonight."
On the other business services front, yes! The complexity of events is accelerating at a rapid rate. Technology solutions on site, live to social media, NFC, RFID and cashless offerings, the latest technical innovations in lighting, sound and special effects. It's all a melting post of new, cut throat and jump or get left behind. It means that many many new suppliers (businesses) crop up all the time with a new service. It all creates growth.
3. Is live music eventing a competitive field? And is it sustainable to make a business in this field?
Yes its super competitive! In fact right now there are too many event promoters. We've seen two market leaders turn insolvent in 12 months. The onset of upfront revene from ticketing has blown the floodgates open. Anyone can be an event promoters now. You book a venue and agree to pay later and book an artist and agree to pay later. Then you put the tickets live and "hope" the cash inflow matches the outflow. That worked for a bit but then too many newbies worked it out and now losses being made are crippling. It's great for the suppliers to the music business, and great for artists who gain many more bookings than the market can probably, realistically afford. So is it sustainable, yes, with knowledge, capital and prudence.?
4. How many people are you reaching and in what basic age group?
And how has that statistic grown and changed over the years?
Are you happy with your target market?
We're niche and it's the main reasons our doors are open! Our core market is two fold. On the one side it's the affluent 18 - 20 year sold in SA, to whom Rage Festival is mecca! It's a not to be missed right of passage that has grown from a few hundred in 2004 to 20 000 unique attendees in 2015. On the other side our corporate clients are key, they want access to our audience and we've got a strong experiential ad agency ?offering to assist them. And yes, we love our target audience. Youth is game. We've long prided ourselves on being "The Biggest Billboard In Youth." We intend to stay that way.
Over the years we've seen huge growth in adding more shows. From Armin Van Buuren to Sensation, Snoop Dogg, Space Ibzia and many more. In early 2015 we made a strategic decision to hold back a little. Consolidate, focus and turn our core offerings profitable. This is not only the best decision we've ever made but probably also the one that's kept our doors open. Had we moved ahead with some of the opportunities presented to us, we'd be closed like our competitors.
5. Do you have any statistics on spending and job opportunities at one, more or all of your events?
The contribution of the audiences and the new money that comes into the economy due to the event?
The in kind money such as transport accommodation and other services that the event brings into the economy?
How many job opportunities do your events provide?
And what is the impact on the location where they happen?
Greg Walsh and Tahl Evian interview
We are in the industry and see what is happening all the time. If I go back 8 or 9 years there was a big night clubbing culture, Johannesburg, Cape Town, Durban. All the clubs had busy Wednesdays', Friday's, Saturday's. Thursday nights they were open and the clubs were pumping. People would go from dinner to a club. If you were 18 to 30 odd that was quite normal.
I am finding there has been a big shift. The younger group 18 – 21, and we are finding a lot of young kids that are in the clubs illegally 16 or 17 who are managing to sneak in, drink a few shots and go and party. The 18 to 21 are far more interested in the festival and boutique party market. Things like beats in the bush, the bigger music festivals like Ultra music festival, Rage, RTD. Some of them attract a slightly older market.
You just go on facebook and look for the next week. Every weekend there are things from a rooftop party in town to an even at Carfax, to an event at And. It is all techno, deep house, bass and going after that 18 – 24 market. It is all an event with a theme, special DJ for instance. They are not nightclubs; they are hosted at venues by promoters.
The older crowd, 35 plus have got into this gastro pubbing lifestyle. So it is house parties, going to nice restaurants, craft beer events, even the Pizzavino's, Calcachios'; nice restaurants like that have a craft bar built into their thing. And they do gin. And there are all kinds of interesting restaurants that do very interesting things with gin, with whiskey, with wine botanicals - all kinds of drink pairings. I am finding that the Friday and Saturday fun has changed.
There is no new clubs that have been opening. There are some of the old stalwarts in Cape Town, Durban and Joburg. The odd new on pops up and then usually it dies. If you look at the clubs they are all quite desperate for whatever events you can give them. If you have got an even to give a club, they will grab it and give you the whole door because they are just not full. It is not an economic thing, because if you look at people around town, every restaurant is jammed. People are still spending money, they are still going on holidays, so there doesn't appear to be clubs are battling because people don't have the money to go clubbing. It is more the case that people have shifted their preferences a bit.
The licencing issues around clubs make it difficult because what I understand you can't get a club licence anymore. A club allows you to operate with liquor without food up until about 4 o clock. The licences that exist are ones that have been in the system for a couple of years. So the only way to open up a club is to buy an existing club and take over their licence, so the emergence of new clubs in new areas, it is very difficult. Even the new places, it is the same club, renovated a bit differently every couple of years. I can't remember a new club that has opened up. If there is a new club it is often on a restaurant liquor licence which isn't actually legal. Only allow you to operate until 2, but in principle up until 12 o' clock 80% of the patrons have to have food on their tables. So it does make it difficult for new clubs top open. You find all the existing clubs have been venues for the last 10 15 years. In Joburg safety is an issue late at night so people do generally not want to party at 4 o' clock and come out of a club when it closes and try and make their way home. It is a lifestyle change a bit in the way that people are partying. 10 15 years ago we didn't have these restaurants that were also bars with a DJ and that kind of stuff. That is an emergence in the last 5to 8 year. It is a very European style. When you go to London, there are the massive super clubs but every high street has two or three places packed to the rafters with people smoking outside and partying inside. It is food and drink as opposed to just partying. Every week there at least 2 or 3 roof top parties in town or out in Muldersdruft fetching 500 to 1000 people a party.
That is very successful in California London … Amsterdam were the first to go with that and that has been super successful. The reason they started in Amsterdam was because of the timing of public transport. The clubs used to operate until 4 and public transport would start at 5:30. So you had this weird window where people were drunk around the streets. They realised there was sufficient benefit to the trade, so they changed the whole party thing with pubs only opening at 11 12 o clock, very Spanish thing and close when public transport starts so when people come out of the clubs they can automatically get public transport and get home quite quickly.
In the UK the pubs close at 12. But in the UK it is not an issue to get a club licence if you abode by the rules of what you need to do then you can get a club licence. SA doesn't really have the club licence part of the liquor act. In Mpumulanga they are looking at amending the licence to allow for a licence to run until 6 o' clock because they don't want people being forced out onto the street in 4 o' clock when there is no activity happening in the streets and that is when the muggings and thefts are happening. In Amsterdam you are not allowed to leave the club at certain times, you have to stay.
All the big events, the ADE (Amsterdam Dance Events Music conference) all the 350 events in the city and 1M people go to the parties whilst there is a dance music conference happening with about 5000 delegates. We go every year. There are a few sundowner events. But all the major events open their doors at around 10:30 11PM and run until 6. And you will find the major artists playing between 4 and 6. So it is pushing people to rather wake up at 12 or 1 o clock in the afternoon. Go out in the evening and support that night economy and not be a hindrance to what is happening in the rest of the city which is trying to have a normal economic day trade.
Even event liquor licences don't run past 2 o clock in this country so you are allowed to continue running the event, only you have to stop liquor at 2. It is restaurants up until 12, events up until 2 and clubs up until 4. And there are a lot of clubs happening in townships that are not as formal as the main market …
That is definitely grown if you look in the black middle class and premium class. A lot of clubs are having their most successful night as their main market night or urban night. A club like Taboo might trade Thursday they go after the student crowd. Friday they go after a black crowd and Saturday they sit down the premium Sandton yuppie crowd. And Friday they will have 3 times the bar turn over because that is the nature of the audience. They come and sit down, buy bottles. A lot of clubs are finding that their most successful hours are the hours where they are really focusing on hip hop urban r and b, and going after that up and coming premium urban consumer.
I am finding where clubs used to be packed out by us that seems to have died. Student nights are not a great night for a club. Nikki Beach does student Sensational Wednesdays and they get 8 / 900 18 – 20 year olds, but then they go and spend R60 at the bar.
It has changed. What people expect from seeing a DJ has changed. I guess we are all guilty for having created that problem. When I was 18 to see a DJ in a booth with 4 lights was cool. Now if you have been to rage festival the day you turned 18 and see the biggest pyrotechnics show in the country with lazer lights, LED screens, and then two months later maybe you go to Ultra music festival and then one month later someone has brought out Armen Van Helden and you go and watch a rave in a hangar and there is amazing visual effects … going to a club to stand on a dance floor and watch a DJ doesn't tick the boxes like it used to. There is a higher expectation. You can go and watch a massive artist for 3 or R400 and a club wants you to pay R200 entrance.
There are more people. There are lots of clubs, lots of events, more restaurants, and a lot of everything. I don't know if there is a decline. If you talk about the number of people out partying now compared to what it was 20 years ago,
We were building our business in 2007, 2008 and in those days I knew everyone who promoted events. There was Big Concerts, the crowd that did H2o. And there were smaller guys. If you were a promoter then you were promoting parties in clubs. You weren't doing a rooftop or an outdoor or on a field or by a lake, nothing like that. Now I don't know the promoters there are hundreds of them. If you have got enough money to buy a laptop and create a facebook page then you put the tickets out and start receiving the revenues up front which wasn't the case ten years ago you had to wait for Comp ticket to release the finds, so you needed capital to do the event. It has allowed for a massive emergence of young promoters doing all kinds of pop ups even house parties with 300 people.
Going to a nightclub can cost you R250. You can go to an outdoor party for R150 with 8 DJ's, drinks are going to be cheaper because clubs mark up their prices dramatically compared to restaurants. I think the trend is the same globally just the markets are bigger globally.
If you look at Amsterdam they have over 1000 festivals in the summer in Holland. They have access to a couple of hundred million people in a very close precinct. And those people are of the age group, like music, can afford it are like minded, whit Germanic dig techno house. There is a huge concentration of people who like what's going on and have money. So when those festivals come up it doesn't change that 40 or 50 new night clubs have opened up in Amsterdam in the last yen years, because there is such a massive market there. Here, the market is growing but the rate at which economic spending and partying is growing, it is being outstripped by the number of new possibilities of where to spend it. In Europe the market is just that much bigger.
What is your evolution?
In 2003 / 4 we were promoting under 18 parties in nightclubs. There would obviously be no booze and we were down in the Western Cape. During summer holidays we would have a party every Thursday night at the Dockside nightclub and we used to get 6 or 7000 under 18's coming. That then morphed with the matric rage because we watched them all going off to the coast so we followed them to the coast and started formalising the events at the coast and called that Rage. That was all nightclub based. We would go into that town and find one or two nightclubs; we would rent them for the period. We would then arrive in town three days before the kids arrived and start selling the tickets in the streets ourselves. In 2006 we started with street parties. We would take a club and a bit of the street outside and that really kicked off with Ballito New Year's eve event which we do. We started with Ballito street party and that grew to more people outside than in the club. In the first year it was 2000 inside and 2000 outside. Now it is 5000 outside and 2000 inside. In 2010 we started getting into outdoor events. We attached onto the Durban July, took a venue inside ?Grayville racecourse called the Deer Light Hall and we did a big three level dance floor after party for the Durban July and that attracted up to 8 000 at its peak. We then started applying that model to Rage. And we found we were too big for the clubs and taking on more clubs didn't help because wherever the cool bunch went everybody wanted to go there. In 2012 we started with international acts for the first time and we brought two international acts to Rage. In 2013 we did that Sensation music event at the Dome and we had 13 000 people. That was a r21M production and it took four years of negotiating with the Dutch company IDMT who owned the property to get it out here and get a big enough sponsor in Samsung to bring it. On the back of the success of Sensation we did a lot of shows. The market was just growing and were sitting on top of it. Towards the end of 2014 I saw the crumble coming; I was starting to see that there were too many shows for the number of people. Big Concerts had started pulling out completely of Stadium tours. From the third quarter of 2016 until the announcement of the Justin Bieber show they didn't do one stadium concert. There was so much going on we thought that there was money that was going to be lost and we were dead right. We have seen some serious role players go under in a relatively short space of time. Good established promoters who were doing great shows great music festivals but then tried to take on too much onto of it at the same time and what happens is your one good show ends up funding your losses. That's what started to happen with us on Snoop Dog and some other shows. So we started focusing on Rage and the new side of our business that is growing, experiential activations for corporates, trying to gain the youth market through music. It started with rage and we would help brands. Historically they would send their ad agency to come and set something up on site, run a social media campaign and we said to our clients we will do all of it for you and sell it to you as one thing. It is the sponsorship plus activation plus digital plus social plus influences etc. As we got better than that our clients asked us to help them on other events ,That was when the launch of the Samsung experience happened where we helped them sponsor about 20 shows and music festivals over two years. We would take their funds sponsor the events and then roll out the websites, apps, and social media pages. We did a similar job for Wawa mobile and created the Wawa culture club and that was about R20M in 6 months. And then we did corporate events. We did the launch of the Samsung S7 smart phone this year, a totally new platform for us. A corporate says there is R10M go and launch our latest smart phone device for 500 people. The evolution is from trying to put people in nightclubs to trying to become the biggest event and concert promoters in the land to becoming this hybrid of a specialist festival promoter with Rage and we look at other projects on a piecemeal basis and being this highly focused experiential advertising agency focusing on corporate youth music.
Also Rage is one of the only festivals in SA that really handles the festival over an entire region or city – Durban – Ballito, Umhlanga with large numbers in each area. Most festivals are 4 days in one place. A bit like the Sonar in Spain where there is a big festival and there is so much that happens in the city.
Talking to Big Concerts their view is there is going to be an economic resurgence in 2017 and 2018 with more discretionary spending by consumers. They are pushing back into the bigger shows. They are bringing Bieber and talking about other big A list arena artists. They are thinking about booking 3 or 4 in the next two years which means they are seeing confidence in the big show market, the 70 000 packs in a stadium, which all but dried up for two years. On our side we are not rushing to book DJ's. We did Arman Van Buuren in 2014 and we sold 17 000 tickets at the Dome. One of the best shows we have done.
With Rage we are aware that the audience is spending R160M on their activity and how can we become a bigger role player in facilitating those revenues and helping to grow that GDP impact and helping to take some revenue out of it. Another thing will be Rage Air in time to look at various partnerships with the airlines, try and get involved in facilitating that single transaction, I buy my ticket, I by my flight, I buy my transport, hotel and I can do it in one transaction. And I come to the festival for everything. In time we become the aggregator. I think that is an opportunity. All our efforts around cashless and the way people move around the festival and pay for things is an opportunity for growth. Next year it will be a fully cashless environment. We will control the entire spend through 9 or ten venues as well as hotels, bars … We are seeing a returning audience. It had a strong matric stigma to it, But the festival has got good enough now that it is worth it to come back.
DJ's … ?
What is important to note is that DJ's are not DJ's anymore. The DJ's are ex music producers. The guy sitting behind Britney Spears curating and writing all her music is Calvin Harris now. The people historically would never have got the platform because the singer was the star that has changed With Beat Port, YouTube …
Anyone can become a DJ but not everyone can become a live musician.
Any of the top DJ's go and look in their home studio and see how many instruments they are extremely competent on. How much live music is going into your songs. There is piano, guitar, live drums. People follow economic trends. A lot of people who may have turned out as live musicians ended up as DJ's because the road to cash was that much faster. How that plays out going forward?
It will be like the return of vinyl.
For people to get into live music is a long labour of love. You have got to have a band now so there are 4 of you. Every gig you go to you get R5K at the start. When you chop that up between 4 people, the cost of your practice time and having a place where you can rehearse … The barrier to entry is much easier for being a DJ.
You need a video recorded and a mobile phone and you can launch your music career. Kids these days are all listening to music on their phones, so the liv aspect is getting lost. But still the live musicians are pulling massive crowds. With DJ's the festival brings in 100 000 people but that is across 60 DJ's playing there.
When the kids are 40 are they going to go to live concerts? No because they haven't really been to live concerts?
Maybe the education around alcohol abuse is better. Definitely with cigarettes. BAT had a presence at the festival and I was surprised at how low the cigarette sales were. It was actually quite a small number. The cigarette advertising laws and education has helped. It is all about what is easier to get?