IMS: Covid-19 set to cost electronic sector $4bn
After slight growth in 2019, the value of the global electronic music industry is estimated to fall by 56% this year due to the Covid-19 pandemic, the latest edition of the annual International Music Summit (IMS) business report has revealed.
The yearly report, which is usually presented at the IMS conference in Ibiza, this year cancelled due to the pandemic, states the value of the electronic is sector is set to fall from $7.3 billion to $3.3bn this year, with dance and electronic clubs and festivals set to lose 75% of their income, equivalent to $3.3bn.
By 20 April, around 350 electronic music festivals had been cancelled or postponed, the majority in Germany, with almost 9 million fans unable to attend. According to event discovery and ticketing platform Skiddle, around 4,000 electronic music events in total have been affected by Covid-19 so far.
In Ibiza alone, 2m club tickets were sold last year, with clubbers spending €260m and contributing €500m to the local economy. Bigger clubs and mid-sized venues (over 300-cap.) on the island are to remain shut this season.
DJ and artist income is predicted to fall by as much as 61%, from $1.1bn in 2019 to $400m in 2020. Earnings of the top-ten electronic artists had increased 4% year-on-year in 2019, with the Chainsmokers ($46m) and Marshmello (40m) coming in as the highest earners.
Despite a bleak outlook for 2020, the IMS report notes that the positive trends that led to growth in 2019 – the first since 2016 – “should help fuel a strong recovery in the coming years”.
“The value of the global electronic music industry is estimated to fall be 56% this year due to the Covid-19 pandemic”
The report also details the sector’s livestreaming success. It it predicted that streaming will grow by 18% in 2020, with continued growth expected to generate around $100m in additional revenue for the dance and electronic sector this year.
In May 2020, seven of the ten most watched music streamers on Twitch were electronic focused, totalling 6m viewer hours. EDM promoter Insomniac racked up 2.6m viewers hours by running virtual versions of their events, including the Electric Daisy Carnival rave-a-thon. The promoter is putting on digital editions of Secret Project, Peekaboo and Awakening festivals later this month.
The IMS report also shows that DJs who performed in the video game Fortnite, following the initial success of Marshmello, saw their Instagram followers grow by ten times during and after the event.
Dillon Francis, Steve Aoki and Deadmau5 played the launch of the game’s virtual hang-out Party Royale mode, adding a collective 55,000 to their Instagram followers in four days.
Overall, however, it is believed that livestreamed events, as well as other alternatives including drive-in shows and socially distanced club nights, are “unlikely to be commercially viable, with live streams serving predominantly to raise money for good causes and capacities art physical shows greatly reduced.
Some platforms have started to adapt to paid-for models, the report notes, with Soundcloud introudincing a ‘support link’ button for fan contributions; TikTok launching ‘donation stickers’ for good causes; and Festicket allowing the sale of merchandise. Brands including Coca-Cola, Amazon and Henieken have also sponsored DJ live streams.
This article forms part of IQ’s Covid-19 resource centre – a knowledge hub of essential guidance and updating resources for uncertain times.
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