Live, Why So Important?
The live industry is a very important asset and revenue generator in today’s music industry. Since the distribution of recorded music transitioned from physical sales into digital streaming, artists made less money from their recordings. Therefore, the money from playing live is many times their most important income and also helps the chance of selling merchandise, which is another mattering revenue for artists. Even before COVID-19, during the economic crisis in 2008, the live industry took a hit, but since then it has flourished and grown a lot over the last decade. Huge festivals like Coachella, Lollapalooza and Glastonbury are generating an enormous amount of money every year with the biggest artists in their lineups. Glastonbury alone were estimated to generate 130 million US dollars in revenue. Live music is everywhere from the smallest venues to the biggest arenas and festivals and they are so important for the economy. Experts anticipated further growth for the coming years, to 31 billion US dollars by 2022, $36,6b in 2024 and by 2030 it would have reached $38b, $10b more than the $28b it was generating at the end of 2019. But that stopped abruptly.
Can the Industry Be Prepared for the
Unforeseen?
Leading a company or being an artist, you could probably somewhat expect your business to have a slow month, quarter or even year. But no one expected things to stop completely, in such an abrupt way. COVID-19 hit us early in 2020 from nowhere and the world was forced into lockdown. According to Marcus Fitzgerald of gigmit, we should look back a bit in time.
“When I studied and learned from my professor from an older generation on how to run a business, he always said that the first thing you need to do is to use the first profits you get to make savings in the best case a year of all your costs that you have. If you have zero revenue you can survive a whole year from your savings as a company. Now, this is a bit outdated from the time that I studied. Economy and how the economy works is evolving from that mindset and that position but I think some thoughts of that are actually really helpful and healthy. And if you see how much huge, huge companies have the need to be rescued now and have big financial problems but made millions or billions of dollars profits in the previous years, then you feel; why isn’t this money at least partly being used for recovery”.
Marcus Fitzgerald & gigmit
Marcus Fitzgerald is the founder and CEO of Berlin-based gigmit, one of Europe’s largest online platforms to book live music for events. They now have over 120,000 users and their aim and mission are to make booking as easy as possible and to get a date as quickly as possible from the artist’s side.
How Does the Crisis Affect the Industry?
The live entertainment companies, agencies, promoters, event organizers and venues are heavily affected by this. They are mainly dependent on gigs and events to be organized and people to purchase tickets. When you work as a creative in the music industry, your job is many times also your whole life. Many independent artists are already struggling with making enough money to pay their bills. Many are forced to take jobs on the side to be able to do what they love. This crisis has hit the artists very hard, especially the smaller, independent acts that are depending on the revenue gained when playing live and selling merch, not having a label to back them up. They lose their most important income and worst case; they also lose their side job as a result of Corona. Some people saw this lockdown as an opportunity to be creative and work on their art in peace and quiet. But some artists felt blocked and uninspired and couldn’t be as productive as they wished. The pandemic is not just affecting people’s income and work situations, it also has a huge impact on our mental state and energy, and artists react in many different ways. And even if productivity is the case; what if you don’t have the tools to help you, not everyone has a studio at home.
How Are Companies Working During the Crisis?
In the first stages of the crisis we were all in shock, not knowing what we could do and for how long our lives would be on pause. It was everywhere around us, causing panic, and people were not only scared for their financial state but for their lives. We had to find solutions and adapt to the situation in order to survive the crisis and make the best out of it. In this situation, the pressure on companies has grown enormously but will also be rewarding for the ones who really have been taking the chance to innovate and re-evaluate instead of just cancelling and waiting for better times. Also gaining these new experiences and knowledge in an online streaming world we’re now finding ourselves in, creates new opportunities and chances even when things are getting back to normal. Companies and artists have the chance to stream and share their live shows and events globally to a less limited number of audiences and attendees. Sponsors and partners can be from everywhere in the world and have more data to analyze. Even if this period has in many ways felt extremely limiting, it has also broadened our visions and possibilities in other areas. Third world countries can now participate on another level than before when they couldn’t afford to fly out to concerts and events.
Marcus Fitzgerald at gigmit says he was lucky during this crisis because of his many different projects and opportunities of his company. “We were dealing with platforms that open live streaming opportunities and using it as a tool to research new talent and to manage the programming on their platforms. We did opportunities with brands where we encourage artists to produce videos from home and then they get paid from brands. So, different opportunities for artists to still be active and we also tried to look out for all sort of links and resources that are out there to help artists or promoters in these times, so financial help, promotional help or platforms that reduced their fees and things like that. And we tried to gather this all and produce a lot of content around it in our blog to help the artist by being informed”.
What Can Artists Do?
There were people initially saying this crisis was not the time for releasing new music. The reason for that was because the streaming seemed to go down in the first period. We might have thought that streaming would shoot through the roof because people were bored during the lockdown. But the fact that streaming went down seemed to be a result of people not commuting, going to the gym and listening to music as they would in their normal daily routine. People instead turned to visual entertainment, like Netflix to ease their boredom. Visual content was dominating and YouTube and TikTok increased significantly. But then streaming went up again and people started to look for new music after the first part of lockdown, and premium users even increased on Spotify. That gives a good opportunity for independent artists to release new music now that many of the bigger acts have postponed due to promotional reasons.
The world realized that live streaming had to be taken seriously because we didn’t know when this crisis was going to be over. We simply had to act and deal with entertainment in a digital form in lack of physical options. Artists started doing live streams, also coming together for virtual festivals. The live streaming companies started developing different options for artists to monetize their live streams. Even without revenue, live streaming is a great way for artists to get a bigger following and fan base. Chartmetric is showing in a case study how similar artists from the same genre are compared in being active in live streaming to being less active. In the majority of the cases, the artists who were more active, doing live appearances both on their own channels and joining others, gained significantly more followers. We have to try and make the best out of the time and this pandemic has also been a great chance for artists to work on their marketing, instrument skills, communication, repertoire and things many didn’t use to have time for.
Is There Help to Get?
There are governments around the globe offering freelancers and creative industry acts to apply for help funds. Even if also a lot of big industry players are suffering on their part, some can help.
- During the crisis, Spotify started COVID-19 Music Relief Project. They made options for fans to donate on artists’ pages as well as matching donations for organizations up to 10 million US dollars.
- The German GEMA has launched a help fund for their songwriters and composers and pays out up to 40 million euros.
- Music platform Bandcamp has for a number of Fridays waived their revenue and given the artist the 100 % for that whole day. They started by doing one Friday in March and that day fans spent 4,3 million US dollars, which is 15 times the revenue on the site compared to a normal Friday.
- Platform Songtradr is reducing fees to help artists by offering free distribution until September 1st.
- Sony Corporation (owner of Sony Music Group) started a COVID-19 relief fund where part of the money is going to the creative community.
- Record label Believe put together a playbook to help guide artists to enhance their marketing skills during the lockdown.
These are just some examples on bigger industry players that have really made a difference to help the smaller acts in need. Many of the smaller venues, promoters, booking companies, clubs and artists were struggling even before the crisis began. In Berlin, the initiative United We Stream was started and it allows clubs in Berlin and around the world to live stream. The viewers can donate and the money will go to a rescue fund to support the clubs and venues in need. Only clubs with a capacity of up to 1,500 can apply for the fund.
As A Consumer, How Can I Help?
What is so unique about this situation is that everyone is affected, in one way or another. Artists and companies are suffering from the loss of events and live gigs, as well as many consumers are also in a tight position because of the risk of losing their jobs and even their loved ones. Few people dare to spend money in a situation like this, because of the uncertainty of not knowing when life will go back to normal again. So, what can consumers and fans do to help? The biggest wish from artists and people in the industry is engagement and connection with the content that is offered online; events, streaming concerts and live streaming from artists. It is important to share, spread and promote the music and follow your favourite acts on social media. To the fans who can afford it; help artists financially, buy music and merch on platforms, donate on live streams, use the possible function to donate money to the artist or venues and buy local promoters’ gift cards. But the engagement is the most important part and it’s free, the more you stream, engage, connect and are a part of artist content, the more people they will have to put out music for and get feedback from.
Did We Learn Anything for the Future?
There are a lot of things still uncertain, we can’t know anything for sure until we have a vaccine. Analysts say the live industry is at risk of losing 5 billion US dollars due to Corona. Pollstar has laid out a report showing multiple different scenarios, where the industry could lose $9b in 2020. But what we do know is that even when people had the choice of either getting a refund on their ticket or keeping it for the future, 90 % of people chose to keep their ticket. Thanks to technology, we have been able to innovate, learn and see things from new perspectives. Another thing to learn from is that we need to value the things we always take so much for granted. We have to all come together and help each other, to also affect how artists are getting valued to be able to make decent money on more than just live gigs. We can also learn to live more sustainable and support our local scene. Even if the future is still uncertain, people managed to catch up and adapt to the situation, be innovative and strive to find solutions together in unity, to handle the crisis.
Finally, Is There Hope?
It’s definitely safe to say the year 2020 has been a turbulent one. We have found ourselves in situations we never thought we would have to face. We have been scared, uncertain and many people have lost jobs and loved ones to a pandemic that hit us like lightning from a clear sky. It has been emotionally stressful for everyone, especially those dependent on the revenues from live entertainment. There have been some hard times behind us that didn’t look so bright. But something else also happened during these hard times. We came together, found new opportunities, innovative solutions and gained knowledge in completely new areas that opened our eyes to a whole new world of solutions we couldn’t imagine. Most people in the industry are positive and optimistic. It’s a sense of unity and a feeling of belonging, we are all in the same boat and we will somehow get through this if we help each other. We are already coming up with ways to renew ourselves and even take advantage of the situation. People need entertainment, unity and community. That is not going away even if things will look different over a period of time. And slowly, the world is starting to carefully wake up and things might not feel too dark anymore. The concert and festival-goers are looking forward to seeing their favourite acts when they will be given the chance.
The live industry will survive, people are determined it has to. We just need to value it. People feel the need to enjoy live entertainment together and a pandemic will not stop that. There is hope, creativity is powerful and cannot be stopped that easily.
About the Author
Matilda Nettervik is a 29-year-old Music Business student at SAE Institute Berlin. She is from Sweden and decided to move to Berlin to pursue her dream to work in the music industry. She has a background in retail management and besides her studies she works with artist management and visual media content.
There is hope! Let’s go!
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