x

The latest industry news to your inbox.


I'd like to hear about marketing opportunities

    

I accept IQ Magazine's Terms and Conditions and Privacy Policy

Economist Will Page delivers his festival forecast

Former Spotify and PRS for Music chief economist Will Page has offered his take on the “crisis” engulfing the UK’s festival scene.

Page recently penned an op-ed, We’ve Got To Rethink Festivals, for Music Business Worldwide, in which he pored over the cancellation of more than 50 festivals in the UK in 2024 and considered what it meant for the live business looking ahead.

The list of events either postponed, cancelled or shut down includes NASS Festival, Bradford’s Challenge Festival, El Dorado, Pennfest, Connect Music Festival, 110 Above Festival, Leopollooza, Long Division, Bluedot, Barn On The Farm and Towersey Festival – the UK’s longest-running independent – with the majority of organisers blaming significant increases in operational costs.

Speaking to IQ, Page pinpoints five key factors as the major contributors to the current state of play: costs (“out of control”); demand (“less appetite for risk”); supply (“the algorithm turns us into a field of niches”); culture (“the pandemic wounds of 2020 are still healing”) and weather (“why bother with a major UK festival for £300 when Lisbon costs £30)”.

Given similar reports from the US and Australian festival markets, Page concludes: “There’s something much wider at play here. Hence the need to rethink.”

“The main lesson is that we – as in the British music industry – have been late to wake up to inflation”

He continues: “To quote Richard Kramer, co-host of the Bubble Trouble podcast, it did feel like the whole British live music industry was getting ‘over their skis’ with the post-pandemic bounce back – and that’s when bubbles turn into trouble.

“Saying that, I was not aware of the cost element until a few months ago, when promoters were saying production costs had risen by 50% in two years, and the cost of US talent had become prohibitive. So with the benefit of hindsight, you could argue it was foreseeable. But the main lesson is that we – as in the British music industry – have been late to wake up to inflation, be it concerts or streaming. We’ve been asleep at the wheel – me included.”

Page references the plight of the independent sector in particular, describing the situation as “brutal”.

“Of that list of 53 [cancelled] festivals, most of them are independent where the impact of costs is so much more pronounced,” he says. “The ability to accommodate these costs is much more limited. Also, the motives for independent festivals are not necessarily profit maximising – many have admirable charitable goals as their focus. What’s more, it’s these smaller stages where the headliners of tomorrow often start out – we should all be worried.

“But let’s also recognise the tail is getting snapped, but the head of the distribution – the big festivals – are not finding it easy either. It’s a sensitive subject, for sure, but you won’t find the words ‘sold out’ next to many big events and we’re in mid-July.”

“Festivals of the future need to double down on curation”

In addition, Page, who authored the books Pivot and Tarzan Economics, reflects on the extent to which the headliner shortage is responsible for the struggles of many events.

“Glenn McDonald, author of the brilliant book You Have not Heard your Favourite Song makes a insightful point: ‘A genre-unfocused festival-poster lineup starts to just look like a playlist that has been made and personalised for somebody else,'” says Page. “Let’s think about that – festivals work when we all gather around the same headline stage together and sing those same songs like they are hymns. That very notion, as simple as it is, is beginning to creek.

“Now, the algorithm has turned us into a field of niches. We are all catered for by our unique tastes and we’re stuck down our own rabbit hole as a result. That’s us — our demographic.

“So, what about the next generation coming through? Festivals of the future need to double down on curation. The next generation may not have much in “musical-common” with each other but there will still be demand for intimacy – something the internet can’t deliver but festivals can.”

Debating whether 2024 is more of an off-year or a sign of things to come, Page finds some positives to be drawn while offering his prediction for where the market is headed in the coming years.

“Headline inflation is now under control – that’s a big plus, but that doesn’t necessarily translate into production costs,” he says. “Promoters and venue owners are agile though so I’d be hopeful they are coming down too.

“As for how things might look, I keep thinking about the analogy of a supermarket and specialist butcher. Everything you can find in the butcher, is also for sale in a supermarket – so why do consumers afford the hassle of two visits? The specialist butcher in this sense is the genre-focused festival – and I think the near-term future may be found in this lane. Festivals with a clear musical USP. From a field of niches all the way to a niche headliner to a packed field. Envisage a pendulum swinging away from scale and towards intimacy. That.”

 

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

Economist Will Page on UK’s live music resurgence

Former Spotify and PRS for Music chief economist Will Page has delved deeper into his forecast for the resurgence of the UK’s live sector in a new Q&A with IQ.

Page, the author of Tarzan Economics: Eight Principles of Pivoting Through Disruption, presented his groundbreaking research last month, based on his analysis of consumer spend on live and recorded music since 2019.

He noted that in 2019, British gig-goers spent GBP £1.7 billion on concert tickets – a fifth more than the £1.4 billion that consumers spent on recorded music in the same 12 months. But in the pandemic-hit 2020, live takings collapsed 90% in the UK to just £200 million, whereas spending on recorded music accelerated by 6% to breach the £1.5bn watermark.

However, as lockdown eased in 2021, UK recorded music reached close to £1.7 billion, whereas live spend staged a partial recovery to £700m.

And in an upbeat conclusion, Page suggested the sector’s recovery was on track to be “more like a slingshot than a rebound”.

“Wallets are set to be squeezed further this year and next,” he said. “That said… the imperative is for all of us – policymakers, professionals and performers – to come together to unlock the ‘coiled spring’ demand for music on British stages up and down the country.

“Now the dust has settled, let’s remind ourselves that music is the alchemy in the room that brings us together. And with the pandemic finally behind us, those rooms will surely be packed to capacity. If the collective ‘we’ get this right, it’ll be more like a slingshot than a rebound.”

With that in mind, IQ sat down with Page to expand further on his findings…

“Everyone needs to be reminded of the intimacy of the live music experience”

Given the UK is in the midst of a cost of living crisis, what impact do you expect that to have on the bounceback of the live business? 

“There’s psychology at play with the current crisis; the fact that prices are still accelerating matters as we can’t see light at the end of the tunnel. If/when they stop accelerating, the psychology will change and change fast. I’m quietly confident that inflation will return to something we’d call normal soon, but remember we haven’t had a normal (real interest rates above the rate of inflation) for over a decade!”

There has also been a lingering reticence to return to live shows from a certain segment of the audience, how does that factor into your projections?

“This could be genuine, lingering, doubts about the pandemic, but it’s more likely inertia. To combat that, I think the industry needs to optimise for reach over revenue, get more people to attend at least one event, as opposed to a few people to attend many. Everyone needs to be reminded of the intimacy of the live music experience – once experienced, they’ll never go back (to their sofas, Pringles and Netflix, that is!).”

“Live music faces costs just like all parts of the entertainment economy, but may benefit from the tough times as well”

Are there any other factors you are concerned about that could impact the resurgence?

“Yes, I think there’s displacement effects to consider. There’s an old expression that goes ‘Domino’s Pizza wins in a recession as people dine out less’. I think that can be applied to live music – in that consumers might push back on European short breaks which might set them back £400 in flights and hotel and invest that money in domestic live shows, which with a meal, travel and child care could be a £200 bill. Live music faces costs just like all parts of the entertainment economy, but may benefit from the tough times as well.”

You noted in your analysis that, since the London Olympics, all the growth in UK live music was contained within stadiums and festivals – increasing their share from 23% in 2012 to 40% in 2019. Why do you think that was and do you expect that trend to continue?

“Andrew Bud, a statistical inspiration to me and also the founder of iProov, taught me an inconvenient truth of the long tail in 2008: when you offer more choices, people want more hits. We’re clearly seeing that play out here. Also, there are simple economies of scale effects to consider, as big means bigger margins. Finally, when you play festivals you’re often told not to tour theatres – that tips the scales even more.”

“When I look at the global success of Dua Lipa, that makes me so proud of a UK music export success, but also concerned as I can’t really think of any British act to emulate her since”

When you predicted the comeback will “be more like a slingshot than a rebound”, what sort of timescale did you have in mind?

“Let the data do the talking. I was so grateful to the PRS for Music team for enabling me to work with their data from 2019-20-21 as we can learn about the recovery, let’s wait to see what the data tells us at the end of 2022. Since publishing my work in Music Business Worldwide and Financial Times, many companies have shared data to suggest that this year will be the slingshot and set new box office records. It sure feels like 2022 is well on its way to being a slingshot.”

Are there any closing thoughts you would like to add?

“Going back to the long tail, we need to think about the smaller venues as a seed bed for future growth. I worked on a piece for The Economist in 2015 looking at the average age of festival headliners. To be clear, I don’t want to sound ageist. I respect the sentimentality that makes live music so special. I love thinking about how many of those fans who went to see Coldplay weren’t born when Yellow was released! But… I do think that the live industry doesn’t have a long list of headliners in their 20s like we did when Radiohead did Glastonbury in the mid-to-late ’90s. I have no time for ‘bs’ scaremongering but that, I feel, is a legitimate concern. When I look at the global success of Dua Lipa, that makes me so proud of a UK music export success, but also concerned as I can’t really think of any British act to emulate her since. To go back to our statistical analogy, this lopsided success of live music reminds us we need the long tail to feed the head.”

 

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.

Why the UK’s live biz is set for major resurgence

The UK’s live music industry is set for a dramatic post-lockdown resurgence, according to Will Page, the author of Tarzan Economics: Eight Principles of Pivoting Through Disruption. Below, the former Spotify and PRS for Music chief economist presents his groundbreaking research.

This article was first published by Music Business Worldwide and we thought it was so good, that we wanted to republish it. Our thanks to MBW publisher Tim Ingham for agreeing.

 

 

‘Ships passing each other in the night’ is how I described Britain’s live and recorded music industries in a Billboard article during the dark days of lockdown, June 2020.

Streaming had become a ‘stay at home stock’, front loading growth in subscribers and streaming volumes. By contrast, live music had been all but silenced by the restrictions put on our freedoms to curtail the pandemic.

That article provided the evidence base to help policymakers, and contributed to the UK Government announcing a GBP £1.6 billion funding package for the arts the following month, and then the UK Government launching a £750 million insurance scheme for live events the following year.

What matters, as one Scottish Chancellor constantly told me, is ‘evidence-based policy making, not policy-based evidence making’.

I was indebted to the UK’s PRS for Music, which licences live events so that its songwriter members can collect performance royalties when their songs are played at concerts.

Its data on the British market, combined with data on recorded-music spending by the Entertainment Retailers’ Association, allowed me to model consumer spend during a time of crisis.

Now, they’ve let me update the analysis.

The exclusive insights garnered from this work are jaw-dropping. Buckle up.

 

Live vs recorded music spend. (Anyone remember 2019?)

Let’s go back to when the world was normal.

In 2019, British gig-goers spent GBP £1.7 billion on concert tickets (or ‘box office’), a fifth more than the £1.4 billion that consumers spent on recorded music in the same 12 months.

Combined, British music fans spent a total of £3.1 billion on music in 2019.

(Also: this concert spend captures only the primary ticketing market — what’s commonly known as the ‘face value’ – and ignores secondary markets and ancillary spend.)

Then, music was silenced from our stage, but surged on our phones.

In the surreal year of 2020, ‘box office’ collapsed 90% in the UK to just £200 million – whereas spending on recorded music accelerated by 6% to breach the £1.5 billion watermark.

As lockdown eased in 2021, streaming’s success continued, pushing UK recorded music spend closer to £1.7 billion (ironically, the same value of the UK box office before the pandemic), whereas live spend recovered some of its losses capturing £700 million in box office (still less than half what it once was).

 

The importance of ‘wallet share’ – and how UK consumers spend just 0.2% of their money on music

We can stack both components of the British music industry on top of one another and add a final piece of the puzzle: wallet share.

The team at the Office of National Statistics who studied Covid’s impact on UK consumer spend kindly provided me with data on recreation and culture spend. This enabled me to measure total UK spend on music as a share of what is often termed ‘the entertainment dollar’.

Think about this for a wee minute: one pound in every ten spent today in Britain is on recreation and leisure – yet only two percent of that leisure spend (which pans out as just 0.2% of the grand total) is spent on live and recorded music.

Deflating, huh?

Now, let’s get to our chart.

On the left, spend on recorded music in green, stacked with box office spend in grey. On the right, the red line represents the share of leisure spend.

The gin-and-tonic relationship of increasing subscriptions driving increasing gig-going increased wallet share from 2% in 2015 to 2.2% in 2019 – a bigger share of a bigger wallet.

As lockdown hit in 2020, wallets contracted and wallet share sank to 1.3% (less share of less money), recovering to 1.6% last year.

Now let’s figure out what these lofty figures mean for artists.

For live music, we strip out fees and taxes from the face value of the ticket and give the artist 75% of what’s remaining.

For recorded music we take the label’s own wholesale value of music and give the artist 25%.

Bizarrely, these assumptions throw up an 80/20 rule for 2019: 80% of artist income came from gigs, and 20% from recordings.

As live music is the main breadwinner for most artists, its silencing in 2020 overshadowed streaming growth, wiping 70% off their income.

If artists were struggling to make a living before we locked down the UK economy, then they had 70% less to make a living after.

And in 2021, the partial recovery in live and continued growth in streaming got artist income to only half what it once was. For individual artists, (less so for firms), that’s really tough.

While there’s no such thing as an ‘average artist’, an average pay cut of 70% raises questions of survival.

In 2019, live music income was bigger (and distributed among the few) while recorded music income was smaller (and distributed amongst the many).

The pandemic suddenly changed that mix.

As streaming has many more mouths to feed – and there’s nothing else to feed them with – it’s little surprise that the UK industry dragged itself through an arduous Parliamentary Inquiry during the lockdown years.

Now let’s focus on the ‘suffering and recovery’ in live music.

In a New Year essay I showed that, since the London Olympics, all the growth in UK live music was contained within stadiums and festivals – increasing their share from 23% in 2012 to 40% in 2019.

That’s at the expense of theatres, clubs and grassroots venues which have felt squeezed out of the British market, in absolute and relative terms.

The chart below neatly illustrates that the harder they come, the harder they fall: Stadiums and festivals lost more box office spend than arenas, theatres and clubs combined in 2020, reducing their share of UK box office down to a measly 10 percent.

From boom to bust to boom again, 2021 saw these outdoor events grow box office by over quarter of a billion, raising their share of box office to a record-breaking 45%.

To use ‘long tail’ language, the UK live industry has never been so ‘hit heavy’ – where the spoils go to so few events.

Where we go now

These insights throw up questions that a global industry can learn from.

Sure, we’re still a long way off our pre-pandemic peak of £3.2bn consumer spend and 2.2% share of wallet.

But back to Gordon Brown’s point about evidence-based policy making (and not policy-based evidence making), this work gives policymakers and industry professionals the necessary foundation to figure out what assistance and actions are required to get us back to where we once belonged.

This isn’t going to be easy.

Wallets are set to be squeezed further this year and next. That said, with the internecine nature of the Parliamentary Inquiry behind us, the imperative is for all of us – policymakers, professionals and performers – to come together to unlock the ‘coiled spring’ demand for music on British stages up and down the country.

James Taylor [not that one!] heads up music for Wembley Stadium. He sees this coiled spring(ing) into action: this summer, a record-breaking 16 concerts are taking place at the famous stadium with a staggering 1.3 million tickets sold; that’s the population of Edinburgh and Glasgow, combined!

Now the dust has settled, let’s remind ourselves that music is the alchemy in the room that brings us together. And with the pandemic finally behind us, those rooms will surely be packed to capacity.

If the collective ‘we’ get this right, it’ll be more like a slingshot than a rebound.

The author would like to thank: John Mottram and Frances Hodgson (PRSforMusic); Katherine Kent and Luke Croydon (Office of National Statistics), Liz Martins (HSBC Economics), Tim Chambers, Bill Gorjance, Ralph Simon, Entertainment Retailers Association and the BPI.

He would also like to share his thanks to Dice for their comprehensive data on the UK live events industry.

Will Page’s Tarzan Economics: Eight Principles of Pivoting Through Disruption is out now via Simon & Schuster (UK) and Little, Brown and Company (US).

 

Get more stories like this in your inbox by signing up for IQ Index, IQ’s free email digest of essential live music industry news.