Stage Entertainment: the Europe-wide powerhouse producer with a local touch
The musical theatre giant brings big shows to audiences across the continent. Its chief executive tells Lisa Martland why catering to each market’s tastes is a winning formula
When Stage Entertainment axed its UK producing arm in early 2016 as part of a major restructuring of the global company, it came as a shock to the West End market. Nearly two years on, it’s not as if the international theatre producer is absent from Theatreland or Broadway – Anastasia is currently running in New York and Tina: The Tina Turner Musical is soon to open in London – but the commercial giant is strongest in continental Europe.
While Stage Entertainment has occasionally shown interest in other geographical areas, the company’s current focus is very much on its three mature markets – Germany, Spain and the Netherlands – as well as key developing ones in France, Italy and Russia.
In Europe, Stage Entertainment’s unique selling point is its combination of theatres and productions. With 20 theatres in 11 cities in six countries, the company presents musicals in a wide variety of languages and locations.
A few statistics give an impression of the huge influence exerted in these markets: in 2016/17, underlying sales brought in €500 million (£443 million), with audiences of 6.7 million watching 6,639 performances of 33 productions.
Chief executive Arthur de Bok, who joined the company in May this year (he was previously chief executive of Mediq, a global supplier of medical devices and care solutions), admits there have difficult times in the past (in 2014/15, the company was reported to have made a loss of €9.1 million), but insists the focus on being “the leading company in continental Europe” is now paying off.
“The six markets for us represent the core of our strategy. In the past, we might have looked at others, but we now see enough growth potential in those.
“That comes from two things. One is that we’ve more and more engaged in what we call long-term planning, together with our partners [Disney, Really Useful Group, Cameron Mackintosh, Little Star and other licence holders]. We like to do that so we can continue to optimise our productions in our current network of 20 theatres in those markets.
“The second thing is we still see opportunities for expansion in all those markets, to buy or lease new theatres in areas where we believe there’s potential for musicals. It’s a good way to grow your business, from a strong place.”
An example De Bok gives is the opening in March this year of Stage Entertainment’s second theatre in Madrid, the Coliseum, where The Bodyguard is currently playing, having transferred from the Netherlands.
5 things you need to know about Stage Entertainment’s strategy
1. Activity is focused on six core nations in continental Europe: three developed markets of Germany, the Netherlands and Spain, and three developing markets – France, Italy and Russia.
2. The company brings top West End and Broadway shows to European audiences in collaboration with leading international licence holders, delivering the product in their native language.
3. The business model is developed around three complementary strands: licensed production, managed or owned theatres and creative development. The latter is a small part of the business, with future projects including Tina: The Tina Turner Musical.
4. Stage Entertainment seeks to grow audiences and optimise footfall. This involves the development of the existing customer base and the strategic purchase of venues in areas where fresh markets are identified, such as the recent acquisition of Madrid’s Coliseum Theatre.
5. Digitilisation and data analysis enhance the company’s ability to adapt its product to a multilingual, multinational market.
In addition, the Mogador Theatre in Paris reopened with a production of Grease several months ago (following a major renovation after a fire in September 2016), and the company is in the process of acquiring a new venue in Milan.
De Bok explains how a great deal of time, money and effort has been invested in pursuing operational excellence within Stage Entertainment, in particular “acting as one company, with a strong local presence”.
“In the last two years, a couple of things have changed. Firstly, we have a more focused strategy, and secondly, 85% of our productions are replicas and non-replicas mostly originating in the West End or on Broadway.
“We have a whole process in place: we talk early on with our partners about planning and what the best opportunities are. We are much more one company, working in closer cooperation with our markets, and we’re planning more centrally so we can offer those strong musical theatre titles into continental Europe.
“That’s the core of our business. We say: ‘Focus on continental Europe. Focus on our network. And focus on working with our partners to plan and move those productions into our network.’ ”
Soon to join De Bok in pursuing these international growth ambitions is Adam Crozier, the Scottish former ITV chief executive who has just been announced as the new chair of Stage Entertainment’s supervisory board.
Both executives will be aware that the company’s planning extends far beyond the practicalities of staging a musical – Stage Entertainment also has an important role to play on the ground in those local markets.
“We are so proud of the way this company understands the local flavour in our markets,” De Bok says. “That is the key to being one company. We have the expertise to deal with all the differences, whether they be in relation to language, local culture and sense of humour, costings or labour rules.
“We’re constantly working together to make sure that those productions have the highest standards. Eight shows a week, those performances have to be outstanding.”
Refining the right strategies for audience development and footprint optimisation in different markets is crucial to Stage Entertainment’s current and future success.
Tellingly, the latest company report references the need for balance “between the artistic quality of our shows and the analytical, data-driven management of our commercial activities”.
This reflects De Bok’s previous experience in the medical, pharmaceutical and transport industries – sectors that have been faster to embrace digitalisation – where rapid data collection and analysis allow a company to respond to numerous audiences.
“We have a database of 13 million people and we’re trying to optimise that,” says De Bok. “We’ve built a new central marketing community that supports each country and have also done a lot of research into optimising our marketing media mix.
“For example, we still run classic TV campaigns, but digital advertising is taking on more and more significance. Social media can have a big benefit.”
That database also has a role to play when researching ideas for new productions.
“A central team scouts markets all around the world, often in collaboration with our partners, and we can then go on to test those musicals, using insights from our database of consumers. It helps us to see what might potentially be a good idea to bring to our markets and if there is an opportunity to create attractive returns for the partners and ourselves.”
On almost a quarterly basis, specialists from the different national markets sit down together to compare their findings and discuss new projects.
This has allowed Stage Entertainment to serve a variety of different markets, offering productions that very much cater to local audiences alongside blockbusters that – when adapted to different languages – can transfer from country to country.
An example of the former would be Was Getekend, Annie MG Schmidt – a piece about the iconic Dutch writer, famous for many Dutch musicals, TV series, books and poems – which is currently on tour in the Netherlands.
Elsewhere, Stage Entertainment’s long-term collaboration with Disney has resulted in more widespread success, not least with The Lion King, which is in its 16th consecutive year in Hamburg and its sixth in Madrid. Recent openings have also included Mary Poppins in Stuttgart and Tarzan in Oberhausen (following previous successful runs in Hamburg and Stuttgart).
However, De Bok freely acknowledges that no amount of data-driven testing can guarantee the success of a show: “We can never 100% predict success because the execution of the show, the production itself, the casting, how it comes across – all these very important elements still very much determine how the production is going to do.
“At the end of the day, the heart and soul of our business is the musical, the live performance, what we bring to the consumer, and our productions need to be outstanding.
“We can do things to optimise that. We can become more efficient in how we plan it and how we bring it to the theatre, but we can never compromise on quality. If people pay a premium price for a ticket, it absolutely needs to be a premium experience.”
And this approach isn’t just limited to an audience’s time inside the auditorium. When Dutch television and theatre entrepreneur Joop van den Ende founded Stage Entertainment in 1998, he was committed to customers enjoying the height of comfort from the moment they arrived at the venue.
De Bok adds: “Our theatres are big and often have more space than those in the West End and on Broadway. We offer our customers the ‘360 experience’ when they come to a show. The front-of-house area of the theatre is much larger, so you can host special events. Visitors can have dinner there.
“We’re lucky that our founder acquired and refurbished these beautiful theatres and we have enough space to do that. We really like the whole experience to be very positive for people.”
Despite the fact that his business-oriented mindset and marketing prowess has characterised his tenure as chief executive, De Bok enjoys the unpredictability of the entertainment world.
“It’s a very dynamic, high-energy industry, which I really like,” he says. “There is a predictable side in that you can do all that testing. On the other hand, it’s a creative product, which is very special, so you never know exactly how it’s going to work out, really.
“But in terms of planning and doing things more efficiently, I think there are still opportunities.”
Profile: Stage Entertainment
Chief executive: Arthur de Bok
Headquarters: Amsterdam, Netherlands.
Structure: 20 theatres in 11 cities in six countries; biggest stable of theatres in Hamburg, the largest musical hub in the world (1.7 million visitors) after Broadway and the West End.
Shows (2016-17): 33 productions; 6,639 performances; 6.7 million audience
Turnover (2016-17): €500 million (£443 million), Like-for-like sales growth: 9.7%, Like-for-like audience growth: 4.3%.
Budget (2016-17): €66 million (£58.5 million) investment in productions and theatres.
Audiences: 38% aged under 34, 46% aged 35-54, 16% over 55, Identified end-customer purchases represent up to 70% of sales; repeat customers with at least two purchases in the past 18 months represent 38% of sales
Key contact: Maarten van Nispen, director of corporate communications maarten.van.nispen@ stage-entertainme