3. b. Competitive landscape
efore Pumpehuset’s bankruptcy in 2010, the major competitors with a comparable line-up were the concert venues VEGA music house as well as Amager Bio. Big, international artists (e.g. The Red Hot Chili Peppers or Metallica) have also been hosted in the Forum Copenhagen or the national stadium Parken. Other venues such as the amusement park Tivoli would not consider concerts their core
business, but nevertheless frequently host comparable concerts. Since Pumpehuset’s relaunch and new positioning in the niche markets, however, it has ceased to directly compete with these venues. This competitive differentiation is most illustrated by Pumpehuset’s novel artistic strategy (cf. part 4).
3.c. The role of public funding in the cultural industry
ublic funds play a fundamental role in the cultural industries. Total spending by the Danish government on the cultural industries equalled roughly 20 billion DKK in 2011, with around 6% of this money going to the music industry. According to the Ministry of Culture, independence is a key principle in the heavy subsidisation: By providing public funds, art and cultural initiatives are supposed to be promoted to flourish freely without having to defer to commercial interests3. In this respect, the system is supposed to encourage artistic freedom and pluralism. However, there are also critical voices that claim that the current system produces the opposite effect: By giving too much power to a““”” small amount of actors controlling the allocation of public funds, homogeneity rather than diversity is being promoted. Accordingly, a key role in the public subsidisation process is played by the Danish Art Council as well as the organisations such as Dansk Live (Danish Live), Dansk Musiker Forbund (The Union of Danish Musicians), ROSA (Dansk Rock Samråd/Danish Rock Council) or MXD (Music Export Denmark). Pumpehuset, being privately funded to a large degree, knows that it constitutes rather an exception in the music industry. However, there is a strong belief that its private funding provides the company with rather more than less independence. From the company’s perspective, private money and art are not opposites: “The mission for Pumpehuset is that good business and good culture can go hand in hand. This is fundamentally different from common music venues”. (Frederik Juul, Board member at Pumpehuset.)
The Artistic Strategy of Pumpehuset: Breaking with Traditions 4
4.a. The traditional approach
igure 2 shows the traditional set-up of the value chain as well as the flow of the money for a concert. The box on top represents the artist or band that has signed a contract with the booking agency. The booking agency represents the artist and sets up the concerts for the international tours. (In the case of a national artist, there would be one intermediary less, since there would only be a national booking agency.) Examples of big, international booking agencies include Live Nation or Coda Agency. Figure 2: Exemplary Value Chain for the set-up of a Concert
Flow of Money
Booking Agency (International)
Booking Agency (National)
Bar sales etc
3 For an overview of the historical development of Denmark’s cultural policy until today, see also the compendium of the Council of Europe found under http://www.culturalpolicies.net/web/denmark.php.
Published on Mar 13, 2012
Published on Mar 13, 2012
This is the case for the Suitable for Business case competition 2012 about the cultural venue, Pumpehuset, and their future business potenti...