Investing in LIVE Entertainment: Excerpts from ExM Magazine's Oct-Dec '17 Cover Story

Entertainment | November 21, 2017 | News

BookMyShow Deepak Choudhary Magnetic Fields Festival Sunburn

It’s a known phenomenon that India’s appetite for LIVE Entertainment is at an all-time high, and organizers and promoters of LIVE Entertainment gigs are living up to audience expectations and literally churning out experiences. As industry-folk, however, we can’t resist wondering how sustainable and steady the growth of this segment is turning out to become.

From what we at Experiential Marketing Magazine (ExM) decipher is that close to over 200 Crores are likely to be invested in the LIVE Entertainment gigs of the next 3 months that makes for the last quarter of 2017. With the LIVE Entertainment segment currently estimated at close to 500 Crores, we’re seeing roughly half of that being invested in ‘season time’ gigs.

Add to this the accustomization with GST, the pressures of ticket sales given audiences’ advantage of picking from multiple entertainment options, and the age-old factor that most entertainment gigs can still not break-even with ticket-sales alone.

So, what are we really looking at? While it's encouraging to see a recurring growth in this segment of the Experiential industry, the health, and stability in this growth graph are still questionable. Again, to the advantage of consumers of Entertainment, enough new organizers and promoters are still encouraged to enter the space even while a fair few that have burned their fingers, exit. However, is this a good enough indicator for sustained growth for the segment, not only in numbers but in quality of experiences, which is what the fast-evolving consumer is now demanding!

We turn to Industry-experts to shed more light on the trends, challenges and learning from this segment of the experiential industry.

Investments into this Season

Undoubtedly, the most important resource for IP custodians as well as the event audiences that holds the supreme power of decision making is Money. What’s interesting is note is that the matter of monetary investment regarding creating a new event IP or a LIVE Experience is very tricky.

Heavy investments poured in by the custodians subsequently leads to increased ticket pricing which further results in low ticket sales and the eventual failure of the property. On the other hand, without a substantial investment, it is very difficult for planners to create experiences that the audiences are looking for. Anything less than the bar raised by the likes of Vh1 Supersonic and Sunburn will simply not make the cut for audiences today. Not to be overlooked is the fact, that the target market for each of these properties is the youth of the 21st century, who knows their budgets, has traveled the world, is well read and completely aware of what is being served at international music festivals thanks to the internet. Clearly, they want to derive the maximum experience at minimum investment.

Talking about the investments on the line in this season of LIVE Entertainment, Deepak Choudhary - Director, Event Capital stated, “Between November 2017 - March 2018 with all the festivals and multiple shows of AR Rahman and Arijit Singh announced, the overall spending by these event organizers is over INR 200 Cr.”

He further adds, “Sponsor money is available for all festivals and LIVE gigs, however, brands that are willing to hop on the sponsorship bandwagon are negotiating hard even if these festival organizers do end up with some sponsorships, the shortfall is still guaranteed.”

Impact of GST: Good or Bad?

Ever since it was introduced on July 1, 2017, the event industry has been debating on the impact of Goods & Service Tax on the Indian experiential space.

Talking about the impact of GST on LIVE Entertainment scene in India, Ashish Pherwani, Partner, Advisory Services - ‎Ernst & Young remarks, “The impact of GST is mainly in the positive since input credits can now be used to set off output liabilities which was earlier not always the case, and the reduction due to the entertainment taxes. However, the final data that can reveal the true impact of GST is awaited till year end, so it’s hard to comment for now.”

Shreyas Srinivasan, Founder, shares, “So far the GST impact has been positive in my opinion. Large events were double taxed before and since Entertainment Tax was paid before the event it also created a cash outflow before a sale. The GST mandate helps simplify taxation and also allows the organisers to pay tax after purchase. Some states like Chennai have now enforced GST and Entertainment Tax and that’s a huge concern for the industry because the total tax on entertainment reaches close to 50% there.”

Read the Complete Cover Story on the Oct-Dec '17 issue of ExM Magazine by Clicking on the Cover Below. Also read about the economics of ExM's Pick of Entertainment IP's to look out for by:

Gagan Takyar on The Sufi Route
Martin Da Costa on India Bike Week
Kunal Khambati on AR Rahman Encore
Kanishka Singha on Magnetic Fields 
Devraj Sanyal on Enchanted Valley Carnival
Manuj Agarwal on Sunburn 11



We turn to Industry-experts to shed more light on the trends, challenges and learning from this segment of the experiential industry.

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