Aussie industry on the brink of collapse: Insiders speak out

News.com.au

5 days ago

A company that spectacularly collapsed owing $7.5 million gives a glimpse into Australia's entertainment industry as it struggles to come back from the 'devastating' impact of the pandemic, with fears hit shows are becoming too hard to stage.
News.com.au revealed that David Venn Enterprises had thrown an 'extravagant' party to celebrate the Sydney season of Elvis: The Musical Revolution in 2023 when it was potentially trading insolvent, according to a liquidator's report, and went bust a year later.
Now insiders are speaking out about the challenges the Australian entertainment industry faces after a 'rollercoaster ride' over the past five years.
A mass skills exodus, the cost of living crisis and soaring expenses have made it difficult to even mount a production, while Aussie audiences appetite for familiar shows has made new breakout hits almost impossible.
Making art has become 'pretty challenging', said Melbourne Fringe Festival director Simon Abrahams, who is seeing audiences booking tickets last minute.
He said the organisation's core costs have soared by just over 50 per cent, compared to 2019, while government funding hasn't kept pace.
'I really do believe there has never been a harder time to make art than right now simply because costs have risen, the income hasn't risen at the same level, insurance is costing more, and the marketplace is unpredictable,' he warned.
'We will see people leave the sector and see artists and producers saying 'It's too hard I can't do this anymore and it's not financially viable'. The reality is as a city we need and want people to make art and present things we can see and inspire us. It changes our lives and helps us see things differently.
'I am worried that if we don't see more support coming to artists and producers that people won't be able to make the dollars stack up.'
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Who is left to take the risks?
This tough time is particularly hitting artists, with disappearing profits which were already razor thin and 'skyrocketing' costs smashing touring, according to Theatre Network Australia's interim general manager Steph Spiers.
'Small companies and independent artists may not know if a season of a show is going to break even until sometimes halfway through the run because people aren't booking until the day of the show,' she explained.
'That has a flow on impact on stress levels and the mental health of artists that are weathering that changed condition.'
The fallout from the pandemic includes a skills shortages particularly in technical and production roles, Live Performance Australia's Matt Francis said, while it's now 30 to 50 per cent more expensive to put on a production and tour.
But these conditions also have concerning implications for the diversity of Australians in arts and entertainment, Ms Spiers cautioned.
'It also means people that aren't in position to take that kind of risk are maybe being excluded. As you need to have a certain level of financial safety net and not have caring responsibilities and other kinds of constraints in order to feel comfortable about putting on a show and not even know if it's going to pay for itself,' she said.
'We have concerns around equity when things in the arts get really tight because essentially it means only one type of person can be an artist, who has a fair amount of privilege and financial safety nets, and we know it's not representative of all Australians.'
Artists left to suffer on struggle street
Australians are keen on live performances with 30.1 million ticketed attendances in 2023 including theatre, musical theatre, ballet, dance, opera and children performances bringing in $3.1 billion in revenue, according to Live Performance Australia.
'That's more tickets than sold to all of the major sporting codes combined,' Mr Francis added.
But the industry has been showing cracks in recent times.
News.com.au previously reported on another Australian producer Bass Fam, who had hit shows at the Sydney Opera House and major festivals but was slammed by performers who haven't been paid, leaving them thousands of dollars out of pocket. He has promised to pay back the money when he has the funds.
It also revealed a government scheme had paid out almost $750,000 to dozens of former employees of the collapsed company behind the Elvis musical.
Ms Spiers said while these cases were not 'common', it was 'sad and disappointing' for those involved.
'Producing is an exercise in investing and it's essentially taking a risk and what those situations have revealed is it ends up being independent artists who bare the brunt of the risk, which is not good enough,' she said.
'Because they are not the ones who will see the profit if things go really well but they are the ones who suffer if things don't go well.'
There is no question that 'some shows are struggling' but all the big major theatres are full, Mr Abrahams noted.
'It doesn't feel empty but by and large, it feels like it's familiar material that is coming, even new works like Beetlejuice, which is great to see a new Australian musical by Eddie Perfect, but it's a brand that people know,' he added.
'Annie is coming back and Beauty and the Beast. The works that are succeeding are lighter entertainment and brands that people know and feel really familiar and fair enough that's what the world needs right now – something comforting.'
'Unnerving' audience changes
Years of lockdowns, particularly in Melbourne, have fundamentally changed audiences although he said it's a trend being seen worldwide, Mr Abrahams added.
'People want great experiences and they want to have their minds blown but they don't want to plan as far as ahead. They want to see how they are feeling. But they are coming, with 75,000 buying tickets to a fringe show last year in three weeks, and that's nearly $3 million that makes its way into artists' pockets,' he revealed.
'But they are not booking their tickets three months in advance. They are booking the day of and day before. That is both unnerving and for bigger commercial producers they have costs like wages, theatre rentals, marketing costs you have to be able to cashflow that and it's not easy to do.'
Vas Katos has been in the entertainment industry for 30 years and his company Anthem works with clients such as Live Nation and invests in Broadway and West End shows.
He said Covid had hurt the industry long term, particularly small commercial theatre productions and independent artists.
'Taylor Swift and Harry Potter are a treat and people want to buy tickets for them but I do feel for small companies and producers,' he said.
'Covid has been a seismic change to audience behaviours as well as the cost of living.'
He is calling on tax incentives to be introduced for investment in the arts.
'Recipes for poor mental health'
All experts have called for better funding for the arts industry in Australia.
The 'volatile' environment means more money is desperately needed, said Mr Abrahams, particularly to give entrepreneurial producers support to takes risks.
'We know that people come and see a show and have dinner beforehand and have a drink afterwards and park their car and it supports the economy of the city. We have to do more to support producers to get more art happening,' he said.
He wants to see increased funding from all levels of government and arts to be part of the election pitch from parties in Victoria's state election next year.
'I would like to see both sides fight it out on who can do more for arts, creativity and innovation. At the centre of Melbourne and Victoria's identity, we are the cultural capital of Australia and that's going to be at risk unless we continue to invest.'
The Melbourne Fringe festival brings in a $23 million economic return to Victoria when it receives just $367,0000 core funding from the state, he added.
The arts get such a small amount of funding compared to other areas, agreed Ms Spiers.
'It is really only a tiny drop more to support those artists to have careers that aren't just recipes for poor mental health. I think everyone deserves the chance to be able to pay their bills and not be stressed about putting food on the table,' she said.
'There is only so long workers can subside the costs of making art and entertainment through their own unpaid labour. Everything is considered a hard cost of putting on a show except artists's time.
'They are the ones who are asked to cut their rates or take a bit less but no one is asking the graphic designer or poster printer or the people driving the trucks to work for less.'
News.com.au previously revealed the turmoil cast and crew faced inside the production of Elvis: The Musical Revolution as the company began to succumb to financial struggles, with an artist revealing how it 'messed' with their lives while an unpaid superannuation bill of $440,000 racked up.
Mr Venn pointed to ticket sales not meeting expectations and broader financial risks such as high operating costs and unpredictable revenue leaving little margin for error in the industry.
He previously said he regretted the impact of the company's collapse on those affected and remained committed to doing the right thing where circumstances allow.
Path to 168 more productions a year
Live Performance Australia (LPA) is pursuing the government to introduce a live theatre tax incentive based on a UK model.
He said it would allow a certain percentage of pre production costs to be offset against tax or provide a rebate for not-for-profits.
'We see a production incentive beneficial to attract more investment and it has been a gamechanger for the industry in UK,' he said.
'If we are able to encourage more investment in more productions that builds a pipeline of work that creates more certainty and opportunities for artists and performers and they can have more confidence to pursue their craft.'
The introduction of a 40 per cent tax offset for the costs of live theatre production would support the creation of more than 4000 new jobs and 168 new productions, adding almost half a billion dollars in industry value too, according to LPA.
The organisation is also calling on the government to provide more support for young people to participate in the performing arts, including through vouchers to attend live performance events.
Sold more than 10m tickets worldwide
Meanwhile, Theatre Network Australia's most recent survey of independent Australian artists found more than half of respondents were retraining or considering moving into a different industry amid concerns the bounce back wasn't happening and careers weren't sustainable.
'That was last year and obviously things have gotten even tighter in the last 12 months,' Ms Spiers said.
'It's been a number of years now and that takes a toll on people. They might have a bit of buffer to weather a couple of bad years but once those couple of years turns into three or four or five people have to take stock and not everyone can afford to stay in the industry when it's not sustainable.'
Yet Australia has a history of making great shows including The Picture of Dorian Gray recently featuring Sarah Snook, which won two Tony awards, and RGB about the US legal legend Ruth Bader Ginsburg, Mr Francis said.
'Moulin Rouge was an Australian made production that is now touring the world. It has sold more than 10 million tickets globally,' he said.
'We have the runs on the board in making theatre and putting shows on stage that are as good, if not better, than we would see on the West End in London or Broadway.
'Australian producers have well deserved international recognition, fantastic performers, brilliant technical and production crews, but we need to support and facilitate investment in helping make work and building achievements.'