SHOW BUSINESS IN BALTIC STATES

Pollstar magazine 1998

Aivars Hermanis, Remix music management (Latvia)

Since the independence resumption in the Baltic countries different spheres of free market business activities developed rapidly, including the entertainment business.

Mostly the active rock musicians got involved in the newly developing business of music. The skills and learning by doing expertise of the principles of the free market based economical system was gained by the musicians already during the soviet times when illegally buying and selling musical instruments and different sound appliances.

This experience was a strong advantage when starting legal private business activities in the newly formed countries. The first steps in the business of music were establishing enterprises dealing simultaneously with almost all the fields of  the music business: producing and publishing of sound records, organising concerts and shows, musical instrument and sound appliance trade, sound and video record trade, creation of radio stations, etc. There were many enterprises of this kind in all three Baltic countries, but they did not exist long. Those which found and fruitfully developed a certain branch of the music business survived. It was understood that the industry of music is an integrated unit of different business activities and not a single enterprise which covers all fields of the business sphere. 

The three Baltic countries – Latvia, Lithuania and Estonia – create a solid geographic unit and are very much the same in respect to the mentality of the nations, the standards of living and the common future goal — integration in the economical and cultural life of the developed countries. The inalienable part of the “western” style of life is a regular consumption of  cultural products and an active participation in the cultural life. Lately the music business enterprises tend to find forms of mutual co-operation  to ensure their chances of further development and opportunities to dominate in the Baltic market.

The leading sound record companies (the Big Five) have created their offices in Riga  - the geographical centre of the Baltic. They gradually expand their business in Lithuania and Estonia as well.

The largest show & concert companies of the world do not have their direct offices in the Baltic countries yet. They hesitate entering the Baltic market directly because:

  • the purchasing capacity of the people in the region does not correspond to that of the developed countries;
  • the organisers of the shows/concerts have to encounter with very different and surprising situations and problems in the region which are not common in the developed and arranged business environment of the western world;
  • big Bigpart of the inhabitants of the Baltic are not informed enough and familiar with the wide range of the different cultural products that the western cultural industries can offer; so making a guess what could be a successful show/concert in the Baltic's not knowing the mentality of the nations might be a serious financial risk. 

There are two companies in the Baltics which occasionally organise  shows/concerts of the world famous A and B class artists: FBI in Estonia and Remix MM in Latvia. Sometimes the shows & concerts of the world famous artists are organised by enterprises which are not specialised in the music business — advertising companies, radio and TV companies, etc. The goal of these activities is not always a commercial profit; it can be also advertising, publicity and alike. In such cases the artiste is engaged by either an promoting agency, or by a person who has the knowledge and the necessary contacts in the western countries. The business of shows/concerts is based on the mutual trust, and it is hard to enter without the corresponding background or recommendations. The trust of the world’s “wholesalers” is to be deserved by organising shows/concerts on a regular basis and by fulfilling the requirements agreed on in the contracts with the artists. Mistakes and cheating usually result in being pushed out of the business. The range of show/concert wholesalers of the world is not wide, and personal contacts within it is very close; so all that takes place in the show business is discussed by those who control the branch on the world level.

The purchasing capacity of the inhabitants of the Baltic countries is increasing every year. Thanks to the global multi media information systems the influence of the western culture expands. It is very likely that the consumption of culture products - sound records, shows a concerts — in the Baltic states will increase as well, and become a part of the economics of the same importance as in the developed countries.

MARKET

The shows of internationally known artists are consumed in equal rates according to genre, level and quality in the three Baltic states. These rates are close to the ones in the developed countries: ~ 50% pop music, ~10% academical (classic) music, ~20% rock music, ~5% jazz,  ~5% folk music,  ~10% shows of other genres and styles. 

The main reason of shows not being attended is the low purchasing capacity of the middle class people in Latvia. The consumption of the local music products is higher than that of the imported music products. It is explained by the comparingly low prices of the local production and poor information on the supply in the world market.

During the past few years the net of music clubs has developed. This kind of business activities did not exist in the Soviet Union. Usually the owners of the club supply guest artists for attracting people. Engaging a certain artist by  themselves is rather expensive (the travel expenses increase the costs of the deal). The costs for local artists are lower, but because of the little variety of the artists the interest of the people is hard to keep. Exchange of the national artists between the Baltic countries is not possible because of the language barrier. The internationally known “B” and “C” level artists who sing in Russian and/or English and go on regular tours are suitable for music clubs.

The shows of Russian popular artists have the best attendance in Latvia; half of the inhabitants of the country consider Russian their native language. This part of the society is well informed via Russian means of mass media which are widely represented in Latvia. The shows of Russian artists are not popular in Lithuania unlike the shows of the local artists because the inhabitants of the country are mostly Lithuanians (more than 80% of all the population). The ethnical division within the population of Estonia is almost the same as in Latvia. The integration of the Russian inhabitants there was very fast comparing to Latvia. The inhabitants of Estonia are more oriented  to the products of the “western” culture.

The most active target group of the shows are young people of high purchasing capability aged from 20 to 35 years. 14 to 20 year-olds are willing to attend different shows, but they are limited by the low purchasing capability of theirs (financial dependance on parents). The group aged 30 to 55 years is the most capable of paying comparably high price for the entrance ticket, but the formatted shows — such as classical music, opera, jazz, high class popular music - are preferred. This last target group is ~ 10% of the whole population in Latvia and Lithuania and ~30% in Estonia.

The equipment of the venues not always correspond to the internationally practiced standards of show management.

The greatest disadvantage of the show management in the Baltic is the lack of an electronic ticket service  which could at the same time be data basis on the shows and concerts taking place.  Therefore an effective control over the intensity of ticket sales and coordination of the amount and placement of advertising is impossible. Just as well it is not possible to work with artistes with the“on the ticket office” method dividing the risk as is is practiced in the developed countries. There are no technical hindrances for creating such a service, but it would require big capital investments which would pay back in 3-4 years, and slight changes in the legislation of the countries.