As CEO of Oak View Music Group, Tim Leiweke sits at the helm of a company that’s fast becoming an important player in the global live music scene.
With a recent $100 million funding injection from investment firm Silver Lake, Oak View has grand plans to build and acquire venues in the US and Europe as well as grow its venue management arm.
Silver Lake currently has $39 billion in combined assets under management and committed capital, and its other investments include Alibaba Group, Ctrip and Dell Technologies.
Alongside sports, music will play an integral role in Oak View’s vision, says Leiweke as part of an exclusive interview with MBW ahead of his keynote at Midem in June.
Oak View was founded in late 2015 alongside Leiweke’s business partner and veteran music manager Irving Azoff.
The firm is currently spending $600m on redeveloping the Key Arena in Seattle, has partnered to build a new arena in New York for the NY Islanders and is currently bidding to develop an arena in Austin with the University of Texas.
Europe and Asia are next on the cards, and Oak View is soon to announce the launch of a London office alongside partners who will focus on selling naming rights, sponsorships and premium opportunities for venues.
In addition to its bricks and mortar business, Oak View owns US live music trade titles Venues Today and Pollstar.
Leiweke has had a long career in music and sports, spending 18 years at AEG, where he built the company into the second largest promoter in the world.
While there, he oversaw the development of the $2.5bn L.A. LIVE Complex, as well as O2 Arenas and stadiums in London, China and Germany.
After that, Leiweke served as President and CEO of Maple Leaf Sports & Entertainment.
In addition to his current role at Oak View, he also sits on the board of Pandora.
At Midem in Cannes next month, he’ll speak about opportunities and changes in the live and facilities business on Thursday, which is preceded by the annual conference’s first Live Summit, in association with Pollstar.
Here we get Leiweke’s take on some of the music industry’s most pressing issues of the day, and find out why he’s placing so much faith in the live music business.
Why is Oak View investing in the live music business?
For many years I’ve been telling people that music was the anchor tenant that everybody forgot about. Now music in many cases is more important than the anchor tenant for NBA and NHL arenas.
The talk at Midem will be about the growth of the live business, the sophistication of it and the fact that in North America in particular, more money was spent on live music this past year than on movie tickets.
The industry is healthy, it will continue to grow. I think nothing will ever replace the experience of live.
For many years people were saying that bands were getting old and no new artists were capable of selling out arenas. That has not come true, it’s exactly the opposite.
The business has never been more robust.
The Madison Square Garden Company, which is in business with your partner Irving Azoff, has recently announced plans to build large scale arenas in London and Las Vegas. Does Oak View have plans to build in London?
We think MSG’s plans for London are brilliant and we will help them as needs be. From our standpoint, we are looking at other locations.
We’d like to be somewhere in the UK and Europe is a high priority for us, it’s also a natural step to look at Asia.
Having partners like Silver Lake gives us the equity and capital to go out and build or renovate bricks and mortar projects.
Having content partners like Irving Azoff give us the knowledge, relationships and experience of bringing large amounts of music and content to our buildings.
Soon we’ll be able to talk about an office we are opening in London with new partners and leaders that are well known to the industry.
You built AEG into a promoter — are there any plans to do the same at Oak View?
Our job is to create venues, we don’t want to be in the content business. We believe we are better suited to be a partner with promoters of the world and that’s not a space we are going to jump into.
Been there, done that!
What developments do you see on the horizon in the live business?
I sense that technology is going to be great for artists because it will give them more control and the ability to talk directly to their fans. The live experience is becoming better with production values, technology and acoustics.
I’m a little prejudiced because Ticketmaster are a partner of ours, but the money they are spending will make the ticketing process less painful and simpler and easier to track secondary resellers and brokers.
In Seattle, this may be the first new arena built that won’t have a box office.
We’re thinking through a seamless entertainment and experience from the moment you buy the ticket, get your merchandise before the show, not after, to telling you where best to park and how to get to the facility in the easiest less obnoxious way possible.
How do we make that pre show unique and augment what the artist wants to create between them and their fans, and create another sense of anticipation?
What’s your take on the secondary ticketing market?
There is always going to be secondary, [it’s been that way] since the Colosseum!
It’s not going away so we need to take whatever upside there is, and make sure that those taking on risk and driving the value, have some control and receive some of that.
The artist is why people buy tickets, the promoter is the one that takes the risk and the building is creating the capacity for premium.
It’s critical the three of them have the ability to capture the value of secondary, properly rewarding the artist, covering the risk the promoter takes and incentivising the facility to enhance the experience and find ways that people will pay more for that enhancement.
If the three of them can come together and capture that, then secondary is a good thing.
This is not a debate about whether or not there is going to be secondary, this a debate on the fact there are a lot of people that are in the secondary business that aren’t in the risk food chain.
Secondary offers a platform where people are willing to spend more to get more and we have to figure out how we track that.
A few questions about the music business at large: will Spotify maintain its current value?
I hope so! I think that and the other streaming services are very valuable. I believe Pandora is undervalued.
These companies are being challenged and working through rate card, which is what’s going to happen as the industry and streaming technology continues to evolve.
There will be a natural process to go through to find the right way to compensate everybody, and what people are willing to pay in order to have this technology and relationship directly with those they love to listen to.
Music is the essence of what moves us, comforts us and inspires us. That is never going away and technology is only going to allow us to make it more important within our life, culture and experiences.
It’s the challenge of the streaming services and the venues business to find a way to complement that experience.
That’s why we’re thinking about how we make that live experience better so we can get people pumped up about what they are going to experience. How do we create a show before the show?
We can learn a lot from Spotify, Pandora and Apple. Streaming has enabled artists to fill arenas in a matter of years instead of over a ten or twenty year career.
The live business can now grow new talent, new fans and put them together in these venues that we’re building.
That’s the future and is part of what we are trying to figure out with our company.
I recently read an article that said Spotify will never make any money – it used Pandora’s falling share price as an example of where Spotify is headed. What do you make of that argument?
We have a really good CEO of Pandora who will fight this battle.
I think the labels are very aware of how critical it is for the future of distribution and for creating an economic model that all can participate in, and be fairly rewarded in. The streaming business has been very good for the label business.
Lucian Grainge has done a phenomenal job at Universal. The turnaround he has created there is just amazing. I think smart people like him and the Spotifys, Pandoras and Apples of the world and agents, managers and labels, are going to ultimately work out a system that is fair and equitable for all.
There will be an evolution of the proper way to ultimately support and enhance those involved in that technology, who take the risk on creating these companies that are revolutionising the way we are listening to music.
My experience with the labels is they are very focused on trying to make sure that they are a part of making sure that there is a relevant, healthy and profitable business for everyone and that the artist gets their fair share.
As Spotify, Apple Music and Amazon continue to grow, where is Pandora’s place?
They won’t disappear. The management at Pandora has done a very god job of defining who it is that they are.
They have 70m people that listen on the free side and they continue to slowly but surely grow the premium side.
Pandora will be fine, we have a very good management team.
There will be changes in the business, we are in a new world, technology has made us think differently as to how we distribute music, how we do the live business, how we build these arenas, theatres and stadiums.
Technology is the great game changer and all of us have to evolve into understanding how to take that and integrate it into a new, better business model. Pandora will do that.
What’s the future of traditional radio?
We are all watching what happens with iHeart and their process. That is going to tell us a lot about the future of the distribution business so let’s see where this all goes.
What I know is this, there’s never been a better time to be a part of the music business, it’s fascinating.
Finally, predictions for where the music business will be in five years’ time?
Bigger and better.
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