RIO DE JANEIRO, BRAZIL – The Brazilian concert market, which was interrupted during the pandemic, shows signs of reheating in 2022. Quickly sold-out tickets for major attractions and festivals such as Coldplay, Justin Bieber, and Rock in Rio indicate the public’s voracious appetite after two years away from in-person entertainment.
In a scenario of many challenges and opportunities, old and new players in the sector are doing their accounts to dispute space and invest in concert venues, festivals, and tours of bands and artists. “The global demand for live entertainment has never been greater,” says Rafael Lazarini, vice president for Latin America at Live Nation, one of the leading companies in the segment worldwide.
After a long period of paralysis, the industry has changed. A drop in purchasing power, the dollar, inflation, and skyrocketing airfares and fuels have increased costs and risks for a segment that negotiates international fees in advance and in US dollars. Besides the increase in transportation, sound, and lighting prices, several companies closed their doors or changed business.
“On the one hand, there is the euphoria of the recovery, but, on the other hand, we have to adapt to a new reality and economic situation,” analyzes Luiz Oscar Niemeyer, former president of BMG record company and responsible for producing concerts of U2, Eric Clapton, Rolling Stones, and Paul McCartney.
To resist the drastic drop in revenues, several companies have reduced their operations or take-out loans. In the case of Opus Entretenimento, which manages more than ten venues in Brazil and manages the careers of artists like Ana Carolina and Daniel, the cuts reached about 50% of the company.
“As we had to seek resources, the increase in the Selic rate hurt the sector even more,” says Carlos Konrath, president of the company. “It will take a while for us to pay this bill and get back to the blue,” he predicts.
Ahead of the festival TIM Music Noites Cariocas, held in March, and Blue Note São Paulo, which will receive concerts by Maria Rita and Marcos Valle, the businessman and former vice-president of Sony Music Luiz Calainho says he has extended his debts up to 60 months. “The sector will suffer this indebtedness for a few years to reach a higher level.”
According to calculations by PwC Brazil, one of the world’s leading auditing and consulting firms, the national concert market registered a 77% drop in 2020: US$20 million compared to US$88 million in 2019. The consultancy estimates that the sector moved about US$41 million last year, less than half the numbers before the arrival of covid-19.
Brazil’s Central Office of Collection and Distribution (ECAD) verified a similar setback, of 75%, in the collection of rights from concerts and events in the first pandemic year, going from R$183 million (US$38 million) in 2019 to R$44 million. The agency itself had to cut costs thanks to the drastic decline.
Through April of this year, ECAD collected R$36 million from concerts and events, a growth of 414% compared to the same period in 2021, with a 25% decrease compared to the beginning of 2019.
For 2022, PwC forecasts an encouraging US$82 million for the segment. “As most of the houses opened with 100% capacity only in March, perhaps this is a better performance than in 2019, proportionally,” evaluates Ricardo Queiroz, partner at PwC Brazil. “The segment is boiling, with huge supply to the consumer and companies adopting different business strategies, leaning or expanding.”
Although several players carry high liabilities, the current favorable scenario requires a breath of investments and the attraction of new revenues. Cash is indispensable, for example, to go shopping and compete for the rights to bring prominent international attractions.
Whoever wins by offering the best fees needs to pay them right after signing the contract, months before the box office. “Some artists ask for a 50% deposit so that the show can be announced,” says André Matalon, an experienced showbiz name. “With big attractions, such as the Rolling Stones, it is necessary to deposit 100%,” he says.
In an unprecedented and creative operation to capitalize on itself, Opus launched an investment fund in partnership with XP Asset to raise R$260 million to pay for about 1,800 performances by artists such as Seu Jorge, Xuxa, and Alexandre Pires. “We live with the costs of the past and planning for the future,” says Konrath. This year, the company promotes tours of names like Guns N’ Roses, Hanson, and Kiss.
In this environment of repositioning, companies have joined forces, and others are taking the opportunity to launch their activities. William Crunfli and Matalon left Move Concerts to found Music on Events.
Pioneer in the production of big concerts in Latin America since the 1970s, Phil Rodriguez, partner of Move, established a partnership with DC Set Group, known for managing the career of Roberto Carlos and responsible for Michael Jackson and Luciano Pavarotti’s tours.
Among the attractions produced by Move this year are Michael Bublé, Iron Maiden, Liam Gallagher, A-ha, and Bullet for My Valentine. “We spent a long period without billing; it hurt the company greatly,” says Tiago Maia, executive director of Move Concerts. “Even so, it was necessary to continue contributing resources to keep us well-positioned for the resumption: the time is to invest.”
The CEO of 30E Thirty Entertainment, Pepeu Correa, was about to launch the company after leaving the financial market when the pandemic came. The executive then took the opportunity to structure the operation and raised about R$400 million through investors with the Flowinvest Fund.
“When other companies were shaken, we brought in talent from other companies,” he says. In December, the company will produce the heavy metal festival KnotFest Brasil at Sambódromo do Anhembi in São Paulo City, with Slipknot, Bring Me the Horizon, and Sepultura.
Luiz Oscar Niemeyer, one of the most prestigious professionals in the sector, saw his contract as a Time For Fun executive end during the pandemic after years at the company. He then opened Bonus Track Entretenimento with his son Luiz Guilherme Niemeyer.
In partnership with 30E, the company produced the MITA festival, which took to Rio and São Paulo in May, Two Door Cinema Club, Gorillaz, Gilberto Gil, and The Kooks. “We joined forces searching for resources, which are not few, to make the events viable,” explains Niemeyer. “We have three stadium bands to be announced later this year,” says Correa.
One of the big players in the sector, Time For Fun, handed over the venues it managed in Rio, São Paulo, and Belo Horizonte (the former Metropolitan, Credicard Hall, and BH Hall) and opted to concentrate its operations on festivals such as Lollapalooza, Popload, and Turá, which in July will host Emicida, Duda Beat, Zeca Pagodinho, and Nando Reis, among others, in Ibirapuera Park.
After two canceled editions during the pandemic, Lollapalooza had its tickets sold out (R$1,440 per day) in March, when more than 300,000 people watched names like The Strokes, Miley Cyrus, Emicida, and Pabllo Vittar. This year, the production company will also promote sold-out shows by Justin Bieber, Maria Bethânia, and Billy Idol.
Another big event that drew the sector’s attention was Rock in Rio, which sold out all the tickets for six of the seven days of the event in just five hours (with tickets costing R$625 per day).
Scheduled for last year and rescheduled for September, the festival will welcome 700,000 people and features Justin Bieber, Green Day, Coldplay, Dua Lipa, Post Malone, Guns N’ Roses, and Iron Maiden, as well as Demi Lovato, Ivete Sangalo, The Offspring, Bastille, and Djavan.
“The public’s reactions of anxiety and hysteria gave the measure of the current moment of expectation,” says Roberta Medina, vice president of the festival, also in charge of Rock in Rio Lisboa, which will take place in June, with Black Eyed Peas, Anitta, and Duran Duran.
One of the trends is the creation and strengthening of festivals. With consolidated dates and concepts, the events attract brands, artists, and an audience interested not only in shows but also in experiences with multiple attractions, from gastronomy to leisure. “The greater the offer of shows and events, the more demanding the public will become,” predicts Medina.
Under this impulse, the founders of Rock in Rio will take out of their chests the old desire to create an event for São Paulo. The initial attractions of the first edition of The Town festival, which will take place in September 2023, will soon be announced. “We have already closed the main names.”
Live Nation, the global leader in the segment and a majority partner of Rock in Rio since 2018, has not had its operation substantially affected, according to its vice president for Latin America. “We had the muscle to weather the storm,” Lazarini says. The Brazilian branch of the American company is one more to bet on festivals by holding the first edition of Primavera Sound São Paulo, created in Barcelona (with tickets starting at R$579).
There will be more than 100 presentations, between October 31 and November 6, of attractions such as Arctic Monkeys, Travis Scott, Lorde, Björk, Father John Misty, Liniker, and Gal Costa, who will reread her historic album “Gal a Todo Vapor”, 1971. This year, the company is also taking care of the Brazilian tours of Coldplay, Arctic Monkeys, Harry Styles, and Metallica (which ended in May).
After a period in which they avoided associating themselves with the crowds, the brands have returned to invest in the sector. “Currently, the two main sources of revenue are very high: ticket sales and sponsorship,” says Medina. For Luiz Calainho, the period of isolation has brought the cultural sector closer to the population.
“More than ever, people have realized the importance of the creative economy even for our mental and emotional health,” he says. “Entertainment returns, in fact, stronger than before: more remembered and valued,” says Konrath from Opus.
The brands’ willingness can be seen in the support not only to tours and festivals but also in the sponsorship, via naming rights, to concert venues. The Tom Brasil was renamed Tokio Marine Hall and will host Maria Rita, Titãs, and Mallu Magalhães. Espaço das Américas, also in São Paulo, is now Espaço Unimed, where Joss Stone, Caetano Veloso, Milton Nascimento and Marisa Monte will perform.
Taken over by Opus, Credicard Hall has become Vibra São Paulo and will have Maria Bethânia, Nando Reis, Ney Matogrosso, and Jorge Drexler. The Metropolitan has become Qualistage, with Qualicorp’s support. Dody Sirena from DC Set is among the new partners who will bring Roberto Carlos’ concerts to the space and attractions such as Pitty and Nando Reis, A-ha, and Liam Gallagher.
The sector is also experiencing inaugurations, constructions, and expansions of houses and multipurpose spaces. According to Lucas Giacomolli, vice president of Opus, “dates and spaces are congested in all corners of Brazil. The company is building new houses in Rio and São Paulo.
In the old Pacaembu stadium, the concessionaire that took over the sports complex for 35 years inaugurated a pavilion for 9,000 people and is building a nine-story multifunctional building. The Interlagos Race Track will undergo interventions to receive The Town.
The French company GL Events, which manages the Jeunesse Arena in Rio, will start this year the construction of an arena in São Paulo, at Anhembi, with a capacity of 20,000 people, in partnership with Live Nation.
Closed since 2013, the iconic Studio SP at Baixo Augusta, founded by Alê Youssef, was reopened with a program scheduled until December. Blue Note Rio should be reopened at the end of the year in a hotel.
As most of the world’s main artists have started their tours in the Northern hemisphere, an even more attractive offer is projected for Brazilians next year. “Those who managed to hold on until now will do very well because the national market still has a lot of room to grow,” says Medina. “Of course, not all initiatives will work out, each company has its own strategy and business, but the future is promising,” affirms Niemeyer.
According to PwC’s accounts, the good performance estimated for the sector in the coming years will not be enough to replace the losses of the stagnation period. However, the growth calculated for the Brazilian show market before the pandemic should be resumed.
The consultancy projects a volume of US$90 million for 2023 and US$97 million in 2025. “The next two years will be atypical, of high demand and crowded shows, until we reach a normalization in 2024,” predicts Queiroz from PwC.
With information from Valor Econômico