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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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Marc Geiger: Covid-19 will give way to the Roaring (20)20s

Marc Geiger has predicted a boom time for live entertainment after the threat of Covid-19 recedes, saying the current “claustrophobia economy” will give way to a second ‘Roaring Twenties’ marked by high consumer confidence and economic growth.

WME’s former global head of music, who was speaking during today’s iFF Keynote, compared the current coronavirus pandemic to the Spanish flu, which gripped the world from 1918–20, killing an estimated 50m people. Years of “everyone being cooped up at home”, he said, “created a joyous time called the Roaring Twenties, and I think 2022” – his estimate for when the current pandemic will subside – “will give way to a second Roaring Twenties, 100 years later.”

The prediction by Geiger – an executive renowned for spotting music business trends – will be welcomed by live music industry professionals, nearly 600 of which are attending the virtual Interactive Festival Forum on 2 and 3 September. The keynote interview, conducted by Goldman Sachs’ Lisa Yang, ended the first day of iFF conference programming on an optimistic note, and also touched on the incredible growth of music streaming and Yang’s predictions for the concert sector’s post-coronavirus recovery.

Yang said that she believes that global industry has lost around 75% of its value this year, but will recover to around 65% of its pre-Covid level in 2021. The recovery will likely be complete in 2022, she added.

In the mid-term, Yang continued, the outlook is uncertain. “It’s going to be tough,” she said. “There are so many external factors that no one can control. But from a structural perspective, I think the industry is going to come back – it’s not a question of if, but when.”

“Everyone who’s suffering right now: if you can hold on, the bumper crop will be significant”

Speaking to iFF delegates, Geiger compared the festival business to a field of crops (“I always analogise,” he said) and factors such as rising ticket prices and supposedly samey line-ups as taking nutrients out of that field. By 2022 – after two disrupted festival seasons – “everyone will be screaming to get out” of their houses, he explained, so those who are able to survive until then will reap a “bumper crop” in the renewed soil.

He urged those who can to put in place funding to ensure they are able to capitalise when social distancing is a thing of a past. “Everyone who’s suffering right now, if you can hold on – whether it’s through financing, debt, equity – the bumper crop will be significant,” he urged. “Figure out how to bridge your way until the industry comes back.”

“The market is going to come back at a very, very vast clip,” Geiger added, “and […] when it comes back rate of return will be huge.

“We’re going to see more blow-outs and sell-outs, and huge consumer interest. It’ll be one of few times in history the customer will buy a beer or a hot dog, and they’ll feel good about standing in line! And that beer will never have tasted so good.”

“Tell your audience you are NOT coming back until it’s safe and they can have the ultimate festival experience”

Geiger ran out of time for audience questions, but kindly answered some after the session…

IQ: You talked about “When it comes back, it will come back huge” and there being a “bumper crop”. What would be your advice for both festival organisers and agents on riding out the next 12 months and preparing for the Roaring 20s?
Produce a virtual festival in 2021. Tell your audience you are NOT coming back until it’s safe and they can have the ultimate (festival name) experience. Get a sideshow strategy together if you don’t already have one. Go talk to sponsors and get serious about your at-home audience. Raise your ticket prices!!!!

With the deals getting bigger, is there a role for independent promoters and agents, and those smaller independent festivals in the roaring 20s?
HELL YES!!! Bigger than ever! The big promoters have to focus on BIG shows with real profits….They won’t touch the small stuff or be able to after the cutbacks/ layoffs etc… Biggest opportunity EVER.

You talked about “trillion-dollar time” deals, while the concert business is 95-98% down depending on results. With the deals getting astronomically bigger, and growth of streaming accelerating, is the live sector going to become a smaller pawn on a bigger board?
Could happen but Live Nation, AEG and CTS Eventim will insure some pure play aspect of the business. Lot’s of indies will never sell out to bad corporate interests but let’s see.

You mentioned a relatively low number of big players in the live space, but there being room for more. Who could you see entering it over the next 2 years?
One never knows….Could come from anywhere.

Where are the best opportunities in music right now?
Wow, they are everywhere as the music business is getting bigger….that’s too big of a question and answer for me but the deeper you look and think, the more opportunity there is…

“Tell your audience you are not coming back until it’s safe and they can have the ultimate festival experience”

Tickets for iFF 2020 are still available, and all sessions will be accessible to watch back online for seven days after the event ends. To buy yours, visit the iFF website.

 


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Marc Geiger confirmed for IFF 2020 keynote

Marc Geiger, WME’s former worldwide head of music, has been announced as this year’s IFF Keynote, in conversation with Goldman Sachs’ Lisa Yang.

News of the conversation comes as a host of leading figures line up to speak, and leading booking agencies Paradigm, Primary Talent International and Solo Agency announce dedicated livestream showcases of rising stars.

In light of the current Covid-19 crisis, IFF 2020, the sixth International Festival Forum, will run online as the Interactive Festival Forum (iFF), a two-day online event, from 2 to 3 September. The conference will see hundreds of festival and agency professionals congregate for panel discussions, workshops, networking and deal-making.

The keynote conversation between Geiger – who left WME earlier this year after building the agency’s music division into a global powerhouse – and Lang is expected to cover major disruptors, innovation and change over the next few years. Other topics in the iFF programme include ticket prices and artist fees, force majeure and refunds, virtual festivals, the lost year of artist development, corporate upheaval, sustainability, risk, insurance and more.

Speakers to have already announced their involvement include Alex Hardee (Paradigm), Martin Elbourne (Glastonbury), Maria May (CAA), Jim King and Arnaud Meersseman (AEG Presents), Roberta Medina (Rock in Rio), Peter Elliott and Matt Bates (Primary Talent), Fruzsina Szep, Fra Soler (Primavera Sound) and Tamas Kadar (Sziget).

“IFF remains an important moment to bring the music festival and agency sectors together”

“Even as a virtual edition, IFF remains an important moment to bring the music festival and agency sectors together,” says Paradigm director and agent James Whitting. “There’s no shortage of great new artists to showcase, and after the lost summer, a huge amount to talk about.

“If anything, this year is more vital than ever.”

Paradigm is one of the agencies to host a livestreamed showcase as part of the iFF schedule, produced in partnership with Livefrom.events. Primary Talent International and Solo Agency are also among those presenting upcoming artists.

The sixth edition of the event is backed by festival associations including Yourope, the Association of Independent Festivals, and De Concert!.

Companies to have already confirmed attendance include 13 Artists, ATC Live, Black Deer Live, BPM Concerti, Charmenko, Cobra Agency, Electric Castle, FKP Scorpio, Fullsteam Agency, Gadget ABC Entertainment, ICM Partners, Lost Horizon Festival, Matchbox Live, MetalDays Festival, Mojo Concerts, Paléo Festival Nyon, Roskilde Festival, TAKK, The Talent Boutique, Vertigo, Wacken Open Air & X-ray Touring.

More details about the IFF Keynote can be found here, while the full conference schedule is here.

 


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