As the general manager of Dubai-based Mirage Promotions, Thomas Ovesen played a key role in delivering some of the region's biggest entertainment events in 2007.
Recently named managing director of AEG Live Middle East, Ovesen now finds himself in the box seat steering the local operation of the world's second largest events promotion firm. In this exclusive interview, he tells Aaron Greenwood about the company's plans to capitalise on Dubai's burgeoning reputation as a major destination for international touring artists and events.
You've faced a certain amount of conjecture from sectors of the industry regarding your decision to join AEG Live. What prompted the move?
I made the decision in December to leave my post at Mirage. Basically, I'd gotten to a point in my life where I was looking for a fresh start and a new challenge.
As soon as I made my decision public I was lucky enough to receive some really interesting offers from a number of companies, one of which was AEG Live. From the outset, the proposal sounded like a dream job to me.
Basically, it would allow me to continue working in Dubai and to utilise the knowledge I'd gained, heading up the regional office of one of the biggest entertainment companies in the world.
I didn't want to work as an independent promoter underwritten by an international company, which was on the cards elsewhere.
AEG Live wanted to be involved directly in the operation, which was vital to me. So, I made the decision in February to take up the offer.
I had six great and exciting years working at Mirage. I'll forever be grateful for the fact I was allowed to do more or less anything I wanted there that made commercial sense for the company.
There have obviously been big changes at Mirage since your departure, with the company being taken over by [AEG Live archrival] Live Nation. Is the local market big enough to sustain both companies as well the dozen or so smaller promoters based here?
No, it's not. I think the market will prove ripe for consolidation over the next couple of years and I don't think it will prove to be a particularly lucrative period for promoters.
However, it's important promoters establish operations here now to take advantage of the bigger opportunities that will come along over the next decade.
The most important thing promoters need to do is not cannibalise each other's business. If we do we'll just be messing about, so to speak, then in three or four years others will come along and steal the business from us.
I'm absolutely certain I can grow AEG Live's business without unduly impacting on rival businesses.
How is your deal with AEG Live structured?
AEG Live Middle East is 100% owned by AEG Live. You have to remember that AEG Live is a massive organisation with 48 subsidiaries worldwide.
The company is primarily involved in venue ownership and facilities management; it also has interests in sporting content ownership and promotion as well as live entertainment promotion and touring.
My immediate brief is to organise concerts and other major events in the GCC.
Eventually, when there are some venues established of note, I'd imagine AEG will look to get involved in managing them in some capacity also.
How does the lack of viable indoor venues impact the company's plans?
It's a major issue to be honest, not just for AEG, but for the industry in general.
If AEG had access to substantial indoor venues it would expand the season by three months. The summer period remains a major concern.
If the venues were in place, AEG could also explore other opportunities staging plug-and-play events.
Spending two weeks establishing a 15,000 capacity venue in a temporary location simply isn't feasible in the long-term.
So, do you think temporary venues are hindering the industry's progress overall?
I wouldn't go that far. Outdoor venues have their own merits, particularly in the cooler months of the year.
There is definitely room for both indoor and outdoor facilities. Festivals will always be staged outdoors.
Obviously a lot of suppliers will lose out on business if there are a fewer number of open-air concerts, but in saying that, they've had a monopoly on the business for some time.
Certain organisations need to look over their shoulders and realise there are event managers and promoters who can now afford to buy their own gear, rather than relying on them.
The profits promoters make on an outdoor concert is often much less than what is paid to these equipment suppliers.
Disregarding the hype, do you still consider Dubai and Abu Dhabi as emerging markets for live events?
They've probably moved beyond that point, but they're still very much underdeveloped. The most telling aspect supporting this is the fact that every sector of the industry could be improved upon.
Promoters are not collectively exercising the potential of the industry. Some are staging ad hoc events and it's difficult to gauge how the market responds. And because they're one-offs, nothing in their approach can be fine-tuned over time.
If the local industry leveraged the experience companies such as AEG Live and Live Nation have internationally and applied that here, then people could avoid making the same mistakes that have occurred elsewhere.
Within a decade the region should not just be on par with developed markets, but should actually be ahead of the curve.
AEG Live has developed a formidable reputation managing some of the world's most prestigious venues, including the O2 Arena in London and the Coliseum at Caesar's Palace in Las Vegas. Will the company look to establish its own venues in the Middle East?
The GCC region presents a number of challenges in regards to acquiring real estate. I think it is more likely that AEG will manage properties on behalf of its owners in this region.
AEG is keen to implement a strategy here whereby it would place a major act in residency at a venue in Dubai for a run of shows, which would attract fans not just from the UAE but from across the region.
A similar strategy has already been implemented to great success in Europe and the US. In London, AEG managed a 21-night sold-out run by Prince at the O2 Arena, which was unprecedented.
Similar runs could probably be organised for six or seven other artists in Dubai, if we had access to the right venues.
Doing four or five nights with the same artist at one venue makes more commercial sense than touring that artist across the region. People will travel from regional centres to Dubai for these types of events.
The presence of AEG Live and Live Nation in the Middle East raises industry expectations about the number of high-profile artists we are likely to see performing here. Would you agree with this?
The presence of both companies is set to put the GCC and Dubai, in particular, on the international touring map.
The UAE is perceived by many artists as an exotic destination to travel to for a one-off gig at the end of their tour.
In saying that, AEG is not about to pay over the odds for an artist or get into a bidding war for their services. The company is not here for the benefit of agents. We are not going to offer incentives.
If an AEG Live touring artist wanted to perform in Dubai and our office passed on them, they would have every right to do a deal with a rival promoter. AEG would be willing to sell the show to a rival for example, if it was a good deal commercially.
Another factor to consider is just because an artist is touring with AEG Live elsewhere does not guarantee they will perfom in the Middle East.
Some of the organisation's biggest acts might simply prove commercially unviable for this market.
AEG Live doesn't enter into long-term deals with artists like Live Nation does. The idea is to avoid the liability when an artist isn't producing or their popularity wanes. AEG prefers to use that money to invest in property.
One factor that is often overlooked is how the rate of inflation and the rising cost of living is impacting the industry. What are your thoughts on this matter?
Looking at this market, I'm sure a large percentage of major events staged in 2007 lost money. Most of these events were staged by first-time promoters that you know won't work here again, which is not great news for the industry either.
The simple fact is that if someone wants to remain in this business they need to invest a significant amount of money in the short-term. But in saying that, AEG is not about to pay over the odds for touring artists to travel to the Middle East.
On a final note, what do you think will set AEG Live apart from its rivals in the Middle East?
AEG is taking a different approach to this market and is looking to gain greater support from corporate clients in staging major events. As a result, we've appointed Trisha Warwick general manager, who was formerly VP of global sales for [Dubai-based hospitality giant] Jumeirah.
The industry needs the corporates to put more money into the market. There are some super-brands in the region that could benefit from being involved in events.
It's all too easy for people who have been in Dubai for too long to begin to think it's the centre of the universe.
Working for AEG Live reminds me how much is going on outside the Middle East.
It also makes me very ambitious to prove what can be achieved here compared to the rest of the world.