State of play

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Dubai Festival City events manager Stuart Every.

Increasing regional competition, anachronistic legislation and a sponsorship market in a state of flux threaten to derail Dubai's position as the number one live events market in the Middle East. Aaron Greenwood investigates.

Dubai's reputation as the number one destination for major international concerts and associated events has blossomed in recent years, fuelled by an unprecedented liquidity boom and an overriding sense of optimism that the good times would always last.

Undoubtedly, the global economic recession has proven a wake-up call to these notions, at once exposing many of the cracks that had been plastered over by successive events that were always - at least in theory - bigger and better than their predecessors.

"In a sense, Dubai has become a victim of its own success," says one well-known industry identity who spoke to Sound&Stage on condition of anonymity.

"The expectation that each new concert or event was going to eclipse those past has created an environment of falsehoods and inflated egos within the industry - not to mention audience numbers."

"The reality is that even during the boom times, the really large-scale gigs barely broke even, and some didn't [make any money] at all," says another.

"The situation has created a rod for the industry's back in the sense that, internationally at least, Dubai's reputation as a cashed-up destination for high-profile artists has led them to demand ridiculous fees to perform here, which is obviously unsustainable in the long-term."

One of the biggest issues to arise from the economic downturn has been the erosion of the corporate sponsorship market, which once sustained many of the major live concerts that helped foster the emirate's reputation internationally. The once steady stream of sponsorship income helped ease the burden of operating in a convoluted consumer entertainment market arguably unlike any other in the developed world.

"Dubai is a unique market in the sense that in the US or Europe, artists generally tour to promote their latest releases, which leads to increased record sales in one form or another," notes Dubai Festival City events manager Stuart Every.

"The music retail business is very sophisticated in these territories.

"However, it's the complete opposite scenario here. The big name artists are looking to generate maximum profits from live performances because they know record sales will be negligible.

"This creates a great strain on the whole events business, but particularly the promoters, in Dubai. It's virtually impossible to break even without sponsorship with these major events."

AEG Live Middle East managing director Thomas Ovesen, whose company was responsible for promoting some of the biggest concerts of 2009, including Kylie Minogue at Dubai Festival City and Iron Maiden at the DMC Amphitheatre, concedes a lack of sponsorship dollars is forcing AEG to reassess its plans for the coming winter season.

"There are a number of concerts we're considering, but the lack of sponsorship income available at the moment is making it difficult to justify some of them commercially," he says.

"The financial expectations of some of the bigger artists combined with the sponsorship issue means that we now need to pull a bigger gate [attract a bigger audience] than we would have previously.

For example, 12 months ago, we might aim to sell 11,000 tickets to a first-tier gig and cover the additional budget in sponsorship. However, nowadays, we'd have to sell 15,000 tickets to the same gig to justify staging it.

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