Taylor Swift, Justin Bieber cancel, Coachella postpones, concert promoters slash salaries: music festival industry’s summer of suffering
- The US concert industry alone stands to miss out on more than US$5 billion in ticket sales if there are no shows all summer
- The damage from the pandemic is likely to be much worse and longer-lasting than industries like restaurants, cinemas or sports leagues
The summer music festival season has ended before it even began.
While sports leagues and restaurants try to figure out when they can reopen to the public, there’s growing recognition among music industry executives that live concerts will not be coming back any time soon. In the past couple of weeks, festivals such as Coachella in California have cleared out of May and June, while those in July and August are just waiting to reschedule.
Outside Lands, a music festival held in San Francisco every August, is exploring a move to October or next year, according to Gregg Perloff, one of the festival’s organisers. “The odds of it happening in August go down with each passing day,” Perloff says. “We have to have a situation where the public feels safe, we feel safe and the bands feel safe.”
Taylor Swift went further on Friday, telling fans she wouldn’t be playing at all in 2020. And Justin Bieber also has scrapped his current tour, postponing dozens of dates.
Summer is the most lucrative time of year for the concert business, as promoters stage festivals all over the world and host large outdoor shows at stadiums and amphitheatres.
The US concert industry alone stands to miss out on more than US$5 billion in ticket sales if there are no shows all summer, according to Pollstar, an industry trade publication. That does not include the lost revenue from advertising, merchandise, and food and beverages.
The ultimate damage is likely to be much worse, and long-lasting. The concert industry stands to remain closed longer than restaurants or cinemas, which can open with reduced capacity.
Sports leagues, meanwhile, make most of their money from media deals with TV networks, and have debated playing games in front of empty stadiums. But concerts depend on large numbers of people gathering in proximity, the very circumstance in which the coronavirus is most likely to spread.
Government officials in Los Angeles and Illinois have warned there may be no events this year, a view held by many agents and managers. One top industry executive predicted the concert business would take three years to make what it normally does in one.
“The live concert industry might be in the most difficult position of any industry in America,” Perloff says. “You never hear people talk about it. They talk about airlines. They talk about the auto industry. But the reality is they’ll be back in business way before the concert industry is back.”
The immediate impact has already been severe. Live music was one of the first industries affected by the global health crisis. In the US, many large states outlawed big gatherings on March 12, the same day an industry task force of concert promoters, talent managers and booking agents urged a moratorium on large events through the end of that month.
Shares of Live Nation Entertainment, the world’s largest concert promoter, have plunged 40 per cent since mid-March, erasing billions from its market value. The company has slashed the salaries of its top executives and borrowed as much as US$150 million.
Paradigm, which operates one of the largest music-booking agencies in the world, has fired staff and slashed salaries, prompting a lawsuit from one dismissed agent. StubHub, one of the biggest ticket resellers, furloughed two-thirds of its workforce.
Touring has become the primary source of income for most musicians, many of whom have opted to stage live concerts from home and stream them over the internet using Instagram, Twitch and YouTube.
Some have charged tickets for shows on sites like Stageit. But most artists are making a fraction of what they once made, while concert promoters, sound technicians, roadies, agents and managers are struggling to make any money at all.
“It’s a really tenuous time for a lot of companies,” says Andrew Morgan, a booking agent with Ground Control Touring. “We don’t have investors, we’re not publicly traded – 100 per cent of our income is based on the income of artists.”
Many festivals have yet to cancel or postpone their events, including the Pitchfork Music Festival and Lollapalooza in Chicago, and Creamfields in Britain. It’s not hard to understand why.
Concert organiser Goldenvoice generates more than US$100 million in revenue from Coachella, the largest music festival in the US. Although the company cancelled the original April date, it still hopes to hold it this year, in October.
Most industry experts expect small shows to be the first to return, followed by large events next year.
But without a clear timeline stating when restrictions will be relaxed, it’s hard for companies to market shows or to sell tickets to events.
Perloff is trying to avoid the worst-case scenario. While larger companies such as Live Nation and AEG have furloughed employees and cut salaries, Perloff has yet to trim his staff of 47.
“We’re a very healthy company,” he says. “But no company can have it make sense for 16 months of no revenues.”