COVID-19 has virtually unraveled life as we know it within a matter of weeks, including the live music industry. The stories are endless from leaving partiers stranded to infecting a third of the legendary Above and Beyond trio, Paavo.
With no certainty on when the industry will start up again, ambiguity continues to hang in the air. Billboard broke down what this may mean for the industry in the longterm and we’ve summarised the key takeaways for you below. For those interested in the detail, access the full article can be found here.
The Pressure Of COVID-19 On Promoters
COVID-19 has caused live events and festivals to come to a standstill and the flow-on impact to the global economy has been dire. The pandemic struck with warmer weather right around the corner, which marks the annual surge of events and festivals. With over 50 million advance tickets sold for the season, the mandated prohibition of large gatherings forced the fate of events in limbo. Currently, billions in revenue from pre-purchased tickets are frozen.
Billboard predicts this may be the tipping point for Indie promoters, who already faced challenges competing with major players prior to the epidemic. Live Nation and AEG are currently dominating the live music industry as the two largest entertainment presenters. Together they own a staggering 75% of all revenue from concert sales. Naturally, at this size, the two giants are more resilient to uncertainty. They hold stronger bargaining power with agencies and vendors, have deeper pockets, and more resources at their disposal. Conversely, Indie promoters are less liquid, have lower bargaining power and are therefore likely to pay more, in addition to a larger upfront proportion to venues and agencies.
With the current state, events and live music are at a standstill and funds from ticket sales are tied up. Unfortunately postponed shows mean no capital is coming in, however, the bills continue. To add further complexity, the uncertainty of the situation has prompted agencies to push for more cash upfront. For Indie promoters with money tied up in postponed events, this is a challenging time.
The Industry After COVID-19
Billboard predicts Indie promoters may face even more of an uphill battle when the industry eventually picks up again. When this happens, venue contracts will be renegotiated and the deals will be tougher as companies try to recoup for lost income. Similarly, budgets from sponsorships may be reduced.
It’s also worthwhile noting that typically ticketing companies would pay promoters when tickets are sold. This allows ticket funds to be invested in future shows or to finance the event itself. With COVID-19 forcing a halt on such an extensive number of events, ticketing companies have also opted to freeze funds. Eventbrite, for example, recently chose to impose a five-day buffer between the event ending and funds being released. On the other hand, agents asking for payment in advance which ultimately leaves Indie promoters in an even more dire position.
The Longterm Outlook
All these pulling forces have created the perfect storm. Under these tough conditions and without the same pool of resources compared to major promoters, Indie promoters may be forced to shut their doors. While AEG Presents and Live Nation bring us huge shows, we should all be concerned about the potential consequences. As we know, variety and competition are healthy for any industry. Fewer promoters mean fewer opportunities for upcoming talent and the likely reduction of diversity of artists.
As the world starts-up again in the wake of COVID-19, the live music industry may have taken a new shape.