A collaborative blog of WSJ analysis related to International Marketing!
Tuesday, October 25, 2016
AEG, Bon Jovi, and the Dalai Lama
Promoter AEG, Bon Jovi and the Dalai Lama
Pulling of concert permit underscores challenge of doing show business in China
KATHY CHU and
A week before Bon Jovi was supposed to perform in China last year, their series of concerts were cancelled in China. AEG never publicly commented on why they had to pull out, but many believed it was due to pictures of Bon Jovi with the Dalai Lama from years before. All anyone really knows is that AEG's permits were revoked. The incident highlights some of the challenges one of the world's largest concert promoters face when doing business in China. A market that has been difficult for foreign entertainment companies to crack due to tight government controls and fickle consumer tastes. AEG has begun to explore other asian markets such as Singapore, Macau, and Seoul to look for new opportunities. AEG has faced many problems in China with business partners over arena operations and a government anticorruption campaign that has taken away from ticket sales. They are reluctant to expand its China footprint because of slow growth even though the AEG arena in Shanghai is the best selling venue in all of Asia. There have been many reasons given as to why success in China hasn't been as fast or exciting as previously hoped. One is that entertainment and sports arenas in China are heavily regulated by the government and business relies on its relationships with venue operators and state backed companies. AEG simply manages the arena and has no ownership of it. Relationships in other countries are key to success. It has been said that AEG hasn't figured out their relationships or counterparts in China and has played a role in slow growth. In addition to another countries stricter regulations.