Australia's Live Biz Wants Tax Breaks Falling Its Way Too

Australia's live entertainment business is convinced that tax breaks and better marketing could provide the incentive to attract more investment into the sector.

Brendan Schwab, Melbourne-based CEO of the Australian Entertainment Industry Assn., confirms that talks have begun with the government about regulatory changes such breaks would require.

In early June, the AEIA had initial talks with the Ministry of Arts in Canberra. Additional meetings with other governmental departments are being planned over the next few months.

The talks are primarily about gaining tax breaks like those applied to the film industry. The government offers investors a series of write-off opportunities for investments in local film productions or movies shot in the country.

Schwab says that while tax deductions for investment in Australian films is a great incentive, "we are disappointed that live entertainment is presently discriminated against, even if it is unintentional. We think what we have to offer has the same cultural benefit to Australia."

The tax breaks for films led to an 84% rise in investments within five years, according to the government-controlled Australian Film Commission. Some in the film business believe greater investment allowed it to create such international box-office hits as "Crocodile Dundee," "Strictly Ballroom" and "Lantana."

"The ripple effect from such tax deductions for the live entertainment sector would be equally as fantastic," predicts Michael Jacobsen, managing director of Sydney-based concert and theatre promoter Jacobsen Entertainment. "It would mean more shows, more employment and busier venues."

He adds it would also strengthen the financial base for Australian promoters who present international and Australian acts and productions through the Asia-Pacific region and beyond. Jacobsen, for instance, holds the global licensing for the "Dirty Dancing" musical.

The AEIA has a trump card in its negotiations. Its inaugural Ticket Attendance and Revenue Survey, released June 16, proved that the live sector creates much greater revenue than previous government estimates.

Until now, the only figures were from the Australian Bureau of Statistics, which uses a sample of data from music promoters and theater production companies. It estimated that total box-office income was $331.6 million Australian ($252 million) in 2002/2003.

The AEIA report, using sales from ticketing agencies and performing arts companies, estimates that 12.5 million tickets, worth $689.6 million Australian ($524 million), were sold in 2004.

The figures cover 10 categories including rock concerts, musicals, opera, ballet, plays and classical concerts, as well as one-off events as "Carols by Candlelight" and WWE wrestling.

With musicals and theater accounting for half the sales, and contemporary music shows making up 23% of the figure, the AEIA says there is now evidence that most of the income is generated by commercial promoters and producers. Yet up to 80% of government subsidies go to not-for-profit performing arts companies.

The AEIA also wants changes in tax rules regarding contributions by arts philanthropists. Currently, tax benefits from private benefactors only apply to such government-subsidized arts as opera or ballet, which together constitute 12.5% of gross income from 2004 ticket sales. The AEIA believes that private contributions should equally apply to commercial promoters.

On Aug. 9, the AEIA will hold a summit in Sydney with its 280 members to discuss the best ways that changes to the tax laws can benefit the industry. The AEIA membership includes promoters and producers, performing arts companies, venues and such service providers as ticketing companies and lighting and sound suppliers.

The AEIA also wants input from members about marketing strategies. That 13 million people attended a live show last year (Australia's population is 20 million) indicates that its marketing should not be aimed at enticing first-timers to events. Rather, Schwab says, it should encourage existing customers to return frequently.

To this end, promoters have been experimenting with tier pricing of tickets.

Schwab believes raising the profile of the concert business would widen its customer basis. This would also help fulfill its need to attract corporate sponsorship to shows and tours. ••••