From pianists to plumbers. Russian show business may not survive the pandemic

"Novye Izvestia" and REU them. G.V. Plekhanov continue the series of materials "Russia in the time of a pandemic".

Yelena Ivanova, Natalia Seibil

Artists live on stage. Only on stage are they gods and can do anything. This is the meaning of their life. There was no show business in the Soviet Union. This industry invented itself and in thirty years has reached a level that was impossible even to dream of in the early 90s. But the pandemic stopped this flight.

“The industry was banned to exist, it does not exist”, - says Yevgeny Safronov, editor-in-chief of the InterMedia news agency.

Show business before the pandemic

The revenue of the Russian music industry is not that great. In 2018, it just fell short of $ 600 million. Compared to the media market with a combined turnover of more than $ 20 billion in 2018, music is only a small part of the entertainment industry. But what a! Rock and pop stars are becoming icons for generations of listeners and viewers. Singers and musicians occupy a special, cult place in the socio-cultural environment. Their fees and escapades are "buzz of the town", something that everyone knows and talks about.

- The income and fees of Russian and foreign stars are an integral attribute of show business and a beautiful life, which, among other things, attracts both fans and new artists to this wonderful world. Nevertheless, the creative professions and the service sector are some of the most crisis-resistant areas. After all, the first thing they start to save on in a crisis is entertainment, which is what show business serves, - says Nikolay Perepyolkin, the associate professor of the Department of Marketing of the Russian University of Economics named after G.V. Plekhanov.

For five years in a row, show business has grown by 4-5%. Before the pandemic, experts predicted that the music market would reach $ 753 million by 2023. There are two features of the national stage that distinguish it from the world one.

Russia is a streaming country

In our country, streaming grew by 14% per year. 87% of listeners used the services of Internet platforms, while the global figure was twenty-six percent less - only 61%. Nevertheless, Russian music lovers were in no hurry to pay for content. It was obvious to the platforms that whoever made users pay would win.

- Content consumption has grown hundreds of times, technology has become more accessible. If earlier two people out of 10 could afford to listen to discs, now 10 people out of 10 can afford to listen for free from pirates or not from pirates. But the turnover did not rise like that, - says Yevgeny Safronov.

People are gradually becoming accustomed to the idea that music recordings are the work of many: musicians, producers, recording studios, promoters, and so on. But this process is long. Joseph Prigogine , like other producers, were convinced of this truth over and over again:

- Russian people are not ready to pay for anything. I had a good example: we were sitting in Paris with very rich people. A man had just bought a necklace at an auction for his wife for one and a half million dollars, we were sitting at the table, and he was telling us how much he liked Valeria's new album "Towards the Sun". I asked him where he buys music. And I heard the answer: “Am I a fool - to buy music? Paying 149 rubles to someone? I download it for free on VKontakte!" People do not understand that by downloading for free, they deprive the performer, composer, poet, musician, arranger of the opportunity to recoup the money invested. Until there is such a culture, everyone will try to use freebies.

However, streaming revenue grew 48% in one year from 2017 to 2018. During the quarantine, the artists had no other option but to make money online. Those of them who already lived on music platforms and were not dependent on concert activities continued to do their job. The rest had to rebuild.

But skepticism remained. As market participants say, people are ready to pay 100-200 rubles for a broadcast. The broadcast is a full-fledged concert. To recoup all expenses, it needs to be watched by 50 million people. For the Russian-speaking segment, this figure is not realistic. This means that every third Russian, regardless of age, gender and musical preferences, must include this concert. The musicians rejoice and consider 3-4 million views to be a tremendous success, but they do not bring profit.

- There are one-time events on the Internet that allow you to make money, as, for example, in Korea. This income looks like this: you earned at one concert, but you spent ten years preparing this concert and so much money that it is impossible to beat off with one concert. The peculiarity of the entertainment events is that you may not get in, not buy tickets. And on the Internet you can not miss. That is, there is no this exclusive and elitist flair. I didn't want to now - I looked in a week. The aura that is in all spectacular events is being lost, and which gives artists the opportunity to earn money. You can't make money on the Internet. Either platforms start earning, or pirates, - says Yevgeny Safronov.

Joseph Prigogine also doubts . And although he and Maxim Fadeev recorded a new song "To the Limit" and have already collected 7 million views on YouTube, the song is played on the radio and on the Internet, but the musicians do not want to frequent it.

- The Internet cannot fully save the situation. Streaming platforms have appeared. But there is very funny money. And you also need to invest money in promotion. If earlier you knew that, having come to one federal channel, you would get a large share of the audience, today you need to come to thousands of channels in order to catch a small share of the audience, says Prigozhin.

Olga Popova , CEO of EventAgency, gives a direct answer to a direct question:

- Can the Internet replace concerts, tours?

- Cannot replace in any way. Moreover, I see that interest in webcasting has dropped dramatically. It took off at the beginning of the quarantine. Broadcasting cannot replace live performance.

Russia is a country of concerts

The artists received their main income from live concerts. 86% of all revenues of the Russian music market come from this segment. This is the second feature of our country. In the world, artists receive money equally from concerts and tours, and from recordings. In our country, everything is tied to live performance. That is why artists are a litmus test for the well-being of citizens. It is believed that the stars of show business and show business itself are terribly far from politics. However, after the annexation of Crimea, the war in Donbass and the sanctions that followed these events, income from concerts fell sharply. People began to earn less, cut costs. The first on the list was spending on entertainment. And four years after the Ukrainian events, the concert market did not recover. What to say about a pandemic.

Artist fees aren't just the envy of tabloid readers. They cover the invisible part of the iceberg - payment for the services of support staff, musicians, stylists, makeup artists, photographers, management.

- In order to demonstrate how money can come and be spent, let's imagine that a certain creative group is not widely known, but offers its services in background music for parties and events. On average, they can have from 1 to 10 performances per month, depending on the activity of the management. The cost of one performance can vary from 20 to 50 thousand rubles, respectively, with the introduction of any restrictions on their activities, a group of people loses their monthly income within half a million rubles. At the same time, we are talking about a group of people who may also have people dependent on this income, we are talking about the possibility of renting premises for a rehearsal base, storing props and costumes and other expenditure items, - recalls the associate professor of the Marketing Department of the Russian University of Economics named after G.V. Plekhanov Nikolay Perepyolkin.

Show business marginality is quite low. Event organizers work with full prepayment, returning money only from tickets sold. Therefore, 50% filling the hall or car concerts are not profitable for them.

- If we carry Paul McCartney, then these will be expensive tickets, there will be a lot of people, and in this case there will be a small profit. And if, as now, car concerts are held, or concerts are held on the crawl, then for business it ceases to be interesting, because this is how you can work to retain a place in the market. This requires funds, but they are not, because everything is under the courts, because they require the return of tickets. This is the actual destruction of the industry, it is a rollback to the level of the early nineties, - says Yevgeny Safronov.

The clubs are also closed so far, and even if they open, nobody canceled the social distance. Therefore, standing concerts are simply not possible. Other sites are also questionable.

In show business, two factors have converged that determine people's lives - reduced income and fear of illness. There is no vaccine yet, which means there is no protection against the virus. People avoid mass events because they are afraid of getting infected. Tickets will be bought much less often, experts say. According to their estimates, the recovery of the industry will take three to five years.

"Ours" and "others"

A unique system of entertainment business has been built in Russia. Different from the world. A significant part of it are state-owned enterprises in the field of culture. State orchestras, theaters, dance groups are planned unprofitable, and they are financed from budgets of different levels. The main danger for them is the reduction of subsidies and subsidies. If this happens, then the artists will be cut their salaries, but the collectives will not fall apart and disappear. There are no private theaters, orchestras, pop and rock bands and showbiz in the area of responsibility of the state. Before the crisis, private theaters were glad that the Ministry of Culture did not interfere in their repertoire policy, and in general did not interfere in anything. This is written in the 1992 law, and since then nothing has changed. The state does not see people of liberal professions. For him, this is just a set of individual entrepreneurs or small businesses. For us, this is Russian culture.

- Titov (business ombudsman Boris Titov - NI) fights for corporate events. Cord made fun of me in a situation where I talked about how artists are in dire straits. Then they got together and started discussing industrial issues. But we do not have an industry as such. We have - "swan, cancer and pike", there is not even a trade union. The classical world works differently. When there were worthy people in the State Duma like Govorukhin and Kobzon, they represented industrial interests in the state body, and did not ridicule their colleagues. And now - everyone is on his own. We have a wild forest. It is impossible to create a general conglomerate that would bring together representatives of the industry. Before me, Zosimov, Krutoy tried to do it - it did not work. We cannot get together and create something that would protect common interests. There is a circus community, but pop artists exist in an independent mode, - says Joseph Prigogine.

- Our entertainment industry is not united in influential associations, and this is now having an effect. All these oil, trade lobbyists ran to the government - give it, give it. And the entertainment industry has no association at all. There is STD, there is an association of philharmonic societies, but they have their own narrow program. All private concert organizers, private museums and galleries are not united. When all restrictions are lifted and people support it, the private entertainment industry will have to re-create. Society must plunge the industry into an artificial coma. We can't walk now - let's give them some pants to maintain. Can be completely exempt from all taxes. No taxes for six months, and then, when it comes down to it, minimal. Concert activity is low-margin. All show business and theater business are all individual entrepreneurs or small businesses. Therefore, by definition, they have no reserves to support themselves as a business. And it is wrong to treat them as businessmen, - thinks Yevgeny Safronov.

Many musicians just have to change their profession now.

- The biggest problem for an artist, a creative person who has received a higher education in their profession, is that today they have lost the opportunity to stay in their profession. They have invested their whole lives in themselves with work, money. It is hard to imagine that a huge layer of the global industry can lose their profession just in one day. Where will these people go? - asks Prigozhin.

Musicians are asking for help. Let it be a state order, let them write on the table for now, says Safronov. But then they will not change their profession and will not go to work as taxi drivers in New York, adds Prigozhin. As you know, the state is a bad manager, but sometimes there are times when it is better to be bad than none at all.