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Live music down 64% this year – but will rebound in 2021

The money generated by live music ticket sales and sponsorships has fallen 64% in 2020, with nearly US$18 billion having been wiped off the value of the international concert industry this year alone.

That’s according to the latest figures from auditing firm PricewaterhouseCoopers (PwC), whose new Global Entertainment & Media Outlook illustrates for the first time the economic devastation wrought by the novel coronavirus and subsequent restrictions on staging live events.

The Global Entertainment & Media Outlook 2020–2024 – whose forerunner, the pre-coronavirus Outlook 2019–2023, predicted average annual live music growth of 3.33% through 2023 – revises that figure down to 1.4% (2019–24) to reflect the impact of Covid-19.

In total, live music will generate a projected $10.4bn ($8.3bn ticket sales + $2.1bn sponsorship) in 2020 – down from nearly $29bn in 2019, and far short of the $30.4bn generated by recorded music this year, according to the report. The fall in live revenues has also helped wiped some $17bn off the value of the global music industry as a whole, as the chart below (which covers 2015–24) shows:

2020–24 live music revenues, PwC Outlook 2020

This year marks the first time since the great recording industry slump of the 2000s – when touring overtook physical sales as artists’ main source of revenue – that the recorded sector (including digital) has been worth more than live, reflecting continued strong growth in music streaming, particularly during the Covid-19 era.

Music streaming specifically is worth $20.4bn in 2020, with a predicted compound annual growth rate (CAGR) of 11.32% up to and including 2024.

The global concert industry’s revenues in 2022 will be $29.3bn – over $300m higher than in 2019

Recorded music isn’t the only sector to have done well out of lockdown. Where physical experiences, such as live music, cinema and theatre, have been particularly hard hit by the downturn, home entertainment is booming, according to PwC, with video games (as previously noted by IQ) and ‘over-the-top’ (OTT) video – ie Netflix and other video streaming services – the chief “beneficiaries” of the Covid-19 crisis.

In the UK alone, OTT video revenue has “surge[d] by 18.6% in 2020, to £1.6bn”, the report notes, while videogame consumption is up 9.7%. “Overall, the video games industry is forecast for 9% growth this year, amounting to £5.2bn, and by 2024 the sector will be worth £6.8bn at a CAGR of 7%,” it continues.

But it’s not all bad news for live. Far from it: The 2020–2024 Outlook shows that live music will rebound in 2021, with worldwide revenues growing by 82.6%, to over $19bn, as concerts resume.

Mark Maitland, PwC’s UK head of entertainment and media, says a similarly strong recovery is expected in 2021 for other industries reliant on “in-person” experiences.

“Parts of the media sector have been hit very hard by the Covid-19 pandemic, particularly in-person activities or those reliant on advertising revenue,” he explains. “This will drive a c. 7% decline in sector revenues in 2020, but in recent months we have already seen improving performance, and as such, we expect the sector revenues to return to 2019 levels in 2021.”

Looking further ahead, PwC’s numbers tally with previous predictions made by investment bank Goldman Sachs – another seasoned music industry observer – whose head of media and internet research, Lisa Yang, said at iFF last week she expects the live music industry’s recovery to be complete by 2022.

PwC forecasts “live music to bounce back immediately next year”

Similarly, the Outlook 2020–2024 shows global revenues of $29.3bn – over $300m higher than in 2019 – for the concert industry in 2022, with ticket sales having rebounded to $23.3bn, compared to $22.9bn in 2019.

Despite a ‘lost’ year in 2020, then, PwC’s analysts see consistent growth for live music in the years ahead, noting that even though the business has ground to a halt, M&A activity continues.

“With global live music revenue expected to grow at a 1.4% CAGR, despite disruption to the sector in 2020 as a result of the Covid-19 pandemic there is much to gain from having a broad-based live offering,” reads the report.

“Providing more venues reopen,” PwC UK forecasts “live music to bounce back immediately next year from its growth loss this year”.

Highlighting how live businesses have embraced technology to connect with fans during the concert shutdown (giving the recent virtual Wireless Connect festival as an example), Maitland notes that industries which have diversified into digital are the ones best placed to bounce back quickly after the coronavirus threat has passed.

“Some parts of the [entertainment] sector, such as gaming and OTT video, have been beneficiaries during the pandemic, and we expect these to continue to prosper, with many ‘lockdown habits’ continuing far beyond lockdown,” he explains.

“For sectors adversely affected by the pandemic, this has brought forward some of the digital disruption prophesied to come years later, and it has reinforced the digitisation of the industry. This is reflected in [the fact that] industries that are forecast to claw back their lost revenue are ones being driven by, or have embraced, technology as a way to connect with consumers.”


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Goldman Sachs: Live to return to pre-corona levels by 2022

Investment bank and research firm Goldman Sachs has forecast a strong rebound for the live industry in 2021, in its 2020 Music in the Air report.

In 2016, Goldman Sachs’ Music in the Air: Stairway to Heaven report predicted that the live industry would grow by US$14 billion by 2030, with the sector benefitting from a greater preference for experiences among millennials and Generation Z, as well as access to new tech and data to help boost ticket sales.

Now, the bank has released a second report, which gives revenue projections for the music industry – comprising live, recorded and publishing – in the wake of the coronavirus crisis. The report lowers its pre-pandemic forecast for the live industry by more than 75%, down to $7 billion, but predicts it will climb back to pre-Covid-19 levels within two years.

The report forecasts a “strong rebound in outer years”, predicting 26% revenue growth in 2021 and a further 18% increase in 2022

Lisa Yang, managing director of media and internet equity research at Goldman, says that up to 80% of all events scheduled for 2020 will be cancelled or postponed with a “gradual recovery” beginning from Q4.

The report forecasts a “strong rebound in outer years”, predicting 26% revenue growth in 2021 and a further 18% increase in 2022.

Yang displays confidence in the willingness of fans to return to live events, but states that the pace and timing of recovery will depend on the health and safety regulations around the world.

The bank’s long-term forecast looks positive for the industry, which it predicts will be worth $38 billion by 2030, putting the sector’s annual growth rate (CAGR) at 6% for the period of 2019 to 2030.

Yang also notes the success the industry has had with new methods of monetising and novel livestream models, making special mention to Travis Scott’s recent in-game performance in Fortnite, which attracted over 12 million concurrent viewers.


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Goldman Sachs: Buy Live Nation stocks

Investment banking giant Goldman Sachs has begun tracking Live Nation’s financial performance, assigning the company’s stocks a ‘buy’ rating following a period of sustained growth.

Shares in Live Nation Entertainment (LYV), which trades on the New York’s Nasdaq stock exchange, today reached an all-time high of US$31.31. Goldman analysts have given Live Nation stocks a target price of $35.

Outlining the logic behind the buy rating, CNBC reports Goldman Sachs’s Drew Borst told clients: “As the world’s largest concert promoter […] and ticketing platform, LYV is uniquely positioned to benefit from secular growth in global concerts and gain marketshare.

“Touring has become increasingly important to artists’ income, given the decline in album sales. On the demand side, the millennial ‘experience economy’ is fuelling steady attendance growth in a wide array of live music events.”

“Live Nation is uniquely positioned to benefit from secular growth in global concerts and gain marketshare”

Live Nation recorded record revenue for the sixth year running in 2016, growing turnover 15% to $8.4 billion.

However, Brandon Ross, an analyst for financial services firm BTIG, warns the profitability of Ticketmaster could be undermined in the long term by Amazon Tickets, which is gearing up for expansion in the US and strengthening its ties with Live Nation rival AEG.

He notes Amazon “has the aptitude to become [a music] industry player, if it can gain access to US tickets market”,  and can “target casual shoppers from its large userbase, bundling tickets with other products”.


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