Covid 2020: The recovery position

Aside from parts of China, that are gradually reopening, and countries like Sweden, which has apparently adopted a herd immunity approach to the pandemic, almost everywhere else has seen live entertainment sectors shut down, with losses estimated as high as $9 billion until the end of the year, according to Pollstar.

Despite the uncertainty and lack of deals being agreed between the likes of agents and promoters, those at the sharp end of the business are working constantly to ensure that when business does resume, they are ready to act and kick-start the industry back into gear.

However, with teams of support staff either furloughed, redundant, or placed on indefinite leave, and production crews in similar situations, the live music sector is going to require a period to rebuild before any touring activity can realistically happen.

“The recovery is going to be slow and long; I don’t think the business is just going to bounce back,” says Paradigm Talent Agency’s Alex Hardee. “We had 15 years of straight growth and I thought we were peaking anyway. For a while now, breakthrough acts and those at the top have been doing well, while the middle tier was suffering, so maybe we can have some kind of correction there.”

“The recovery is going to be slow and long; I don’t think the business is just going to bounce back”

Obi Asika, who heads up London-based agency Echo Location also believes the pandemic may allow the business to reset itself. “There’s been too much money and domination in every sector of the music business,” says Asika. “The money and size of everything was getting outrageous. I think this will set us back in terms of 10-15 years, but this is maybe not a bad thing. It will be painful at first but exciting too. We can get back to business and be successful.”

For her part, CAA’s Emma Banks comments, “We must all accept that everybody is going to be away from the office and working from home for a really long time. We’ve just all got to stay a part of the music and touring business ecosystem, and we have got to be patient and understanding. We really must look after each other, and get enough sleep.”

And on the promoting side of the business, Live Nation’s Phil Bowdery says, “As chairman of the Concert Promoters Association, I am seeing that everybody is coming together at this time. Not only the promoters, but the artists rely on a huge workforce of production services; lighting and sound engineers; crew; security and hospitality staff ; musicians – I could go on.” He adds, “We will get through this together.”

“I am seeing that everybody is coming together at this time – we will get through this together”

What?
Picking up on Hardee’s observation about what the rebooted international live music business is going to look like once the pandemic situation ends, it’s a fair assumption that the challenges will outweigh the opportunities as companies, big and small, and individuals try to figure out how best to ramp up their activities to pre-corona levels. So, what might the industry look like when it gets up and running again?

With scientists and government advisors forecasting that a vaccine for the virus realistically could take 12-18 months to develop, test in clinical trials, manufacture and distribute on a mass scale, even a partial lifting of isolation and social distancing guidelines will not appease everyone who used to enjoy the carefree joy of attending concerts and festivals, meaning that the pool of fans that artists and their promoter partners are targeting will be a fraction of their previous volume.

Looking at the agency business overall, Asika opines, “We will definitely see fewer people working in every company. I believe there will still be lots of business to do but the people might change.” And he hints that, for those  independent promoters whose businesses survive, the future could be bright.

“The whole world and industry had gone a bit crazy – I booked 90% of shows with indie promoters back when I tarted, now that takes up 10%, and then it’s fighting for festival slots. This [situation] will take us back to basics a bit,” he contends. “A lot of good things and opportunities could come from this, and it will give a chance to new players – everyone will have to show their value.”

“A lot of good things and opportunities could come from this, and it will give a chance to new players – everyone will have to show their value”

Noting a more collaborative, less aggressive business environment, Hardee also believes that the crisis might oust some of the more unscrupulous players from the industry. “People who do not act responsibly will be exposed quickly,” he says.

Kilimanjaro Live boss Stuart Galbriath agrees, noting that cooperation has never been as prevalent. “There’s no such thing now as normality or precedent. We’ve been having conversations that cut across any normal relationship – whether it’s with a manager, an agent, an ad agency, venues – and asked to do things way outside of what the contracts say, because needs must.”

But, like Asika, Hardee believes that the number of shows and events will take a severe hit. “If we can come back to 50, 60, 70% in terms of business volume, I think we’ll be doing well, but we have to work together to not turn the tap on full, all at once,” he says. “I think it will take at least a couple of years to return to the same level of business we were doing before the virus shut things down.”

On the other side of the planet, veteran Australian promoter, Michael Chugg, has similar concerns about the industry flooding the market with events, once restrictions are lifted.

“We are very worried about the long-term effect on the hundreds of companies involved in the production, presentation and running of the tours, festivals and events, as well as the thousands and thousands of contractors, crew, security and other workers, who lost all income  immediately when the public gatherings were banned,” Chugg tells IQ. “The doubt about when or if live entertainment can recommence is causing a lot of stress and depression worldwide, and I’m sure the industry will be a lot more cautious and careful about saturating the marketplace.”

“We’ve been having conversations that cut across any normal relationship and asked to do things way outside of what the contracts say, because needs must”

Despite such concerns, Live Nation Belgium’s Herman Schueremans is trying to remain upbeat and believes that pent-up demand for live entertainment will ensure positive results once venues reopen their doors. “We’ve seen demand for the on-sales for shows being scheduled the other side of the ban,” he says.

Christof Huber, who heads up European festival association Yourope, contends that the number of tickets in  irculation from postponed tours and shows will help reignite interest among fans. “There will undoubtedly be a period of recovery before people want to spend money on going to see concerts; young people will be quicker because they are all desperate to go out and enjoy themselves,” says Huber. “But there are a lot of postponed shows, so people already have the tickets for those. The big question is over the new shows that go on sale.”

On that note, Ticketmaster UK chief, Andrew Parsons reports that on-sales during the pandemic lockdown have been encouraging. “Live events have always been incredibly resilient,” he says. “We’re still seeing demand for the shows that have been on sale during this time, which only tells us that the power of live entertainment and its innate human connection always endures. Artists will want to get back out on the road and fans will want to be there to see them.”

In the meantime, Parsons says the Ticketmaster team is working hard behind the scenes to prepare for a return to normality. “We’re making the most of the situation and have focused our technology teams on creating and rolling out more features across the board at a faster rate than ever before – ready to hit the ground running when the time comes,” he says. “While we are certainly living in extraordinary times, it has been incredible to see the industry come together to ensure that we are all working for the benefit of one another, artists and fans. Personally, it’s been a proud moment to see how the Ticketmaster team has responded – as resilient and positive as ever.”

“We’re still seeing demand for the shows that have been on sale during this time”

When?
It’s the multibillion-dollar/euro/pound/peso/ruble etc question that everyone is desperately seeking an answer to, and, at press time, there were ‘green shoots’ (to quote government parlance) of hope that some countries are cautiously looking to relax lockdown rules for certain citizens.

With China already phasing out restrictions, on 13 April scientists observed the rate of new infections slowing down in Spain, prompting the country’s politicians to ease lockdown measures by allowing some construction and manufacturing workers to return to their jobs. The same day, French president Emmanuel Macron told the country’s citizens that restrictions would last until 11 May, and further added that festivals would be banned until mid-July, giving hope to organisers whose events are due to take place later in the summer.

Such steps are heartening, but balanced by bans on large gatherings until 2021 in cities like Los Angeles, and a number of predictions by health officials that concerts and festivals won’t return in full until well into next year.

“Our business will be last in line,” states Huber. “First they will allow shops, small bars and restaurants to reopen, probably under strict hygiene rules, but music events, and festivals, in particular, will be last in the chain.”

Turning to the crucial question of exactly when the live entertainment business may be able to resume, Switzerland-based Huber states, “I personally still have hope that we will see shows in the autumn, but others I have been speaking to think there will be nothing for the remainder of 2020. At the same time, a few believe we’ll see live music in June. So, nobody really knows.”

“Our business will be last in line. First they will allow shops, small bars and restaurants to reopen, but music events, and festivals, in particular, will be last”

That June deadline seems very optimistic, but it’s certain that domestic acts in small venues will be the first to benefit as guidelines are eased. The question of a timeline for international tours is much more complex. “How do you route a European tour if the countries don’t all open their borders at the same time?” asks Hardee.

Promoter Galbraith says, “Realistically, we’re going to lose everything we have through June to August. And because the [spring/summer] sales window has completely gone, I think you’re going to see a lot of shows that postpone until next year.”

The Royal Albert Hall is currently dark for the first time since World War II, with many staff furloughed. Artistic and commercial director, Lucy Noble, who also chairs the UK’s National Arenas Association, ddresses some of the trials that venue operators may have to confront: “Every venue is different, and some will be able to withstand this crisis more easily than others,” she says. “The biggest challenge may well be getting audiences to come along. The public will still be nervous about venturing out, and it may take time to build their confidence.”

Addressing some of the trials that venue operators may have to confront, Noble continues, “Every venue is different, and some will be able to withstand this crisis more easily than others. The biggest challenge may well be getting audiences to come along. The public will still be nervous about venturing out, and it may take time to build their confidence. This is going to impact on concert attendance and ticket sales.”

“How do you route a European tour if the countries don’t all open their borders at the same time?”

Highlighting some of the angst that billions of people around the world are enduring because of the uncertainty surrounding the length of the lockdown period, CAA’s Banks says, “We have no idea what timeframe we are on and this is impactful on so many people’s lives – especially those working on zero-hours contracts and freelancers, they are really going to be hit hard.”

Northern hemisphere markets that share the same summer months have been hardest hit, but nowhere is so far unscathed. With a business that concentrates on Latin American events, Move Concerts founder, Phil Rodriguez, says, “We are much luckier because our touring cycles are at the beginning and end of the year, so we did not get hit hard with cancellations or postponements in April/May/June.”

“It’s way too soon to project the future of our business,” he continues. “When will shows return? How will they return? Well, just like there was a before and after for 9/11, there will be the same with Covid-19, unfortunately.”

In Australia, Michael Chugg finds himself in a similar position. “We are optimistic that Australian live music and public gatherings could get back as early as October/November, but it could be January,” he concedes. However, he adds a significant caveat. “International acts touring here could be a lot later: the government would be reluctant to take the risk of international visitors bringing the virus back to us.”

In addition to such political hurdles, those working in the planning side of the live music industry acknowledge that many artists either won’t want to travel, won’t be allowed to travel because of border control policies, or, in a bestcase scenario, might be otherwise engaged fulfilling commitments on rescheduled tour dates.

“The public will still be nervous about venturing out, and it may take time to build their confidence”

“We are all postponing shows to a point at which we think it will all be ok,” says Banks. “There is no point just pushing things back by a couple of months, but that doesn’t mean that there won’t be anything in the interim.

“We are taking the worst-case scenario until we all get to grips with it. The most important thing is to pay attention to government advice, because it’s the scientists that are behind it. Let’s all be sensible, and we’ll wait and see.”

In Germany, Deutsche Entertainment AG (DEAG) boss Peter Schwenkow is optimistic that we will see concerts before the end of the summer, if steps can be taken to allay people’s fear of catching the virus. Speculating that medical testing is about to become more efficient, he says, “By taking the fear away, we might be able to reintroduce shows for up to 1,000 people.” He believes the UK will lag some weeks behind Germany reopening for concerts, while the Americas will be “much later.”

On a macro scale, however, he is painfully realistic. “The open-air season is destroyed,” he says. “We have been postponing about 85% of our events for next year.” And for those businesses that find themselves in financial trouble, he offers a lifeline: “In-between there is a window of opportunity for those who have willing investors.”

With a comprehensive insurance policy that covers DEAG for costs incurred during the coronavirus pandemic, Schwenkow finds the company in a privileged position to help others. “We work in a people business and our company, like many others, depends on people and other small companies. But at the moment, many of those smaller businesses and operators are in danger of going bust, so while we’re not involved in putting on shows, we’re looking at this as a time to buy other companies, both so we can save them, but also so that [DEAG] can expand and put us in a stronger position for the future.”

“We are taking the worst-case scenario until we all get to grips with it”

How?
While everyone that IQ spoke to for this article agrees that international touring cannot practically resume until social distancing guidelines are lifted across multiple countries – perhaps continents – there are numerous plans afoot to reintroduce live music into people’s lives as soon as possible.

Live Nation chief Thomas Johansson says, “It looks likely that the recovery will follow the pattern of the spread of the virus, with Asia opening up first, Europe next, hopefully over the summer. Of course we are planning for the other side. I’ve every faith in our business. It’s resilient and adaptable. I’m pretty sure that demand for live music will be stronger than ever when we get there.

Live Nation colleague, Bowdery comments, “I really believe that as each territory comes through this, all genres will be eager to get out and enjoy the live music scene, including concerts and festivals. Music fans are extremely social creatures and they will respond to the return of live music as they have done for hundreds of years, with high energy.”

Indeed, tapping into the connection that fans have for their favourite acts, Paradigm’s Hardee has a plan to get bands back on stage that will both mark the return to normality, as well as reward fans for their patience and loyalty.

“I’m talking to my bigger acts about playing small venues – often their favourite venues – to celebrate the return of live music and people being able to go out and socialise,” Hardee reveals. And he divulges some of the details he is using to persuade his clients to buy into the idea. “I’m telling bands that we have to cut their production and cut costs down and by playing smaller venues we can work to keep the ecosystem alive.”

“Music fans are extremely social creatures and they will respond to the return of live music as they have done for hundreds of years, with high energy”

Hardee’s plan takes into account the reticence some people may have about voluntarily placing themselves in crowded situations. “Veteran acts might suffer in terms of their audience being reluctant to come out to concerts, but young people think they are indestructible and robust, so the younger acts should be ok,” he says.

Johansson warns that it’s not just companies who will have cashflow issues. “We’ll need to bear disposable income in mind,” he says, “but we also need to remember that live music is a major tonic and the whole world needs that. I have immense faith in the fans.”

Like Hardee, Asika is musing similar low-key relaunch strategies. “If we can only do 500-capacity shows for a bit, that’s fine, you can adapt and it will grow again. We’re going to face a recession on steroids after this, but everyone is going through it at the same time, so this could push us back on an even keel. Emerging with your health is the most important thing right now.”

Indeed, the pandemic’s devastating effect on society has many people re-evaluating more than just their careers. “I will make changes and make sure I don’t work too much, as this has shown that we need to focus on other things too,” says Asika.

Noting that the pandemic could spell the demise of companies at all levels of the business, he adds, “With my small-to-mid-sized company, I can make decisions quickly and adapt. My risk is spread out and I am making it effective, even if I have lost a lot of future earnings. It’s the bigger companies I feel worried for, with huge offices, workforces and debt. It is going to be a scary time.”

Far from rubbing his hands at the thought of his multinational rivals faltering, Asika admits, “It’s frightening, as we are all connected – we are part of the same system and we want everyone to make it through.”

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