Author: T_J_Chambers

With apologies to those friends, colleagues and peers networking and post-pandemically celebrating this week at INTIX Seattle (https://www.intix.org/) for the 44th annual conference of those involved in the ticketing and live entertainment industry – other fine ticketing conferences include TPC (https://ticketingprofessionals.co.uk/), and TBF (https://www.ticketingbusinessforum.com/) -, but whilst ‘Tickets’ have never been more expensive, ‘Ticketing’ has never been valued less.

In fact, ticketing is a bad-news business.


Ticketing: Service [sic] Providers

The first major problem of ticketing is that it is essentially a service provision, whether D-2-C, B-2-B, or B-2-C, and not a viewed as a creative enterprise.

It doesn’t make anything.

At best it enables or distributes access to the consumption of experiences, on behalf of the event Rights Owner.

Further, as a non-creator in the experiential economy its operational practises, technologies and systems don’t retain any intrinsic value, other than to collectors of ticket stubs (and the digitisation of ticketing has all but terminated that bedroom noticeboard signifier of cultural activity).

The ticketing industry is fundamentally service-orientated towards the needs, desires, restrictive policies, and pricing as determined by its clients – whether artists, attractions, sports franchises, event promoter / producers, venues, or affiliates and sponsors – i.e., inventory suppliers with relative lip-service paid to the end-user, you know the consumer, attendee, patron, subscriber, or ticket-holder – apparently flattered by the widescale adoption of the pronoun ‘fan’.

Somehow, this fetishising of the individual who purchases tickets weeks, months, or years in advance of events, with little or no right to refund, resale and/or exchange, elevates the consumer to a new more desirable social strata and seemingly places the ticketing transaction above the drab or commonplace necessities of life e.g., rent, transit subscription, or food etc.

In short, the ticketing ‘fan’ socially identifies someone with fewer rights when compared to other forms of consumer commerce, whilst seemingly applauding their purchase and celebrating their buy-in to the diversionary spectacle of ‘bread and circuses’.

Ticketing: Terms & Conditions

All too often, ticket inventory suppliers don’t understand, or care, about the technical complexity, and/or the actual operational conflict or irrationality, of their service demands. They, the client, simply want execution.

After all, how difficult can ticketing be?

‘Whadda want a bleedin’ medal? It’s not like its heart surgery’.

And it’s the ticketing service’s role to provide.

So, if any client wants at little-to-no notice another ‘exclusive’ closed-user-group pre-sale; or ticket bundle with (chart-eligible) digital tokens; or an up-sale of fan club / supporter membership validated by loyalty credit check & identity verification; or a limited-edition ticket + merchandise offering to previous bookers; not forgetting VIP, Hospitality, Car-Parking, Tail-Gate Parties, or ‘Golden-Circle’ festival glamping, across multiple locations, dates, and time-zones, then it’s the role of the ticketing service provider(s) to deliver.

Reliably, repeatedly, robustly. And securely. All KPI service requirements with measurable and public outcomes.

And the ability to sell tickets with a queuing mechanism that ensures each-and-every, interested party instantaneously acquires the best ticket available at the maximum possible yield to client, whilst conversely the lowest possible price to customers, regardless of the limitations or practicalities of individual event capacity.

And get any/all of this wrong – bad news warning! – and mainstream media outrage with blame-assigning Senate Hearing awaits.

Additionally, ticketing service providers and agencies, whether D-2-C, B-2-B or B-2-C, typically don’t own the product, or determine the primary face-value(s), or usually retain any proportion of that ticket price.

So, the cost of the ticketing services and technologies, alongside any incremental retail, marketing and distribution expense is added to the transaction, along with the inventory-supplier rebates, commissions, and kickbacks – hence the not consumer-friendly service fee superstructure.

Additionally, with the merging of primary and secondary ticketing practises, the arbitrage margin (i.e., above original notional face value) for those tickets resold via marketplaces is another cause of consumer alarm, distaste, or disgust.

Ticketing huh, yeah
What is it good for
Absolutely nothing

(with apologies to Edwin Starr for the misappropriation)

Ticketing: Huh ….

This opaqueness of fiscal incentives and the invisibility of ticket back-end services provided means that there is little understanding of the complexity, range and scale of ticketing and frankly despite the veneer of being a technology-based sector, much of ticketing remains ‘manual’: event creation; account management; the coordination of mobile / web / outlet / kiosk sales (with associated multi-channel load-bearing, redundancy & burstable bandwidths); box office operations; event-entry ticket scanning, ongoing fiscal reconciliation, fraud and chargeback management; CRM and event marketing, payment processing etc.

So ticketing is viewed by clients as a service utility, with an associated rebate incentive to use i.e., a source of revenue incremental to the product – the ticket.

And from the consumer perspective, the ticketing service is typically viewed as a surcharge to the ticket – the product.

Collectively clients resent the (net) margin retained by the increasingly commodified ticketing services (eventually the pennies earned per ticketing process become significant given enough volume) and so the Rights Owners have vertically extended their control over ticketing by consolidating their (typically less successful) event promotions and operational divisions by acquiring their own ticketing arm.

Within these international congloms, ticketing is therefore a smaller proportion of the overall revenues but disproportionately drives their profitability. But politically within these corporations whilst ticketing is often a fiscal strength it’s rarely allowed to direct the overall enterprise.

Ticketing, seemingly always the submissive to their dom.

Whereas for consumers ticketing is more usually identified as just plain evil.


Ticketing: Drip-Pricing

Ticketing’s greatest achievement (?) is the codification of drip-pricing – try and buy any ticket without attendant fees.

With perhaps the greatest ever consumer misnomer ‘the convenience fee’ – convenient to whom?

Closely followed by ‘the transactional fee’ whereby consumers seemingly pay an additional amount to print off the PDF of the ticket, or to have the digital token held on their mobile or have hard-copies sent by postal or courier service with some incremental mark-up.

Similarly, money-grabbing is the live entertainment practise of charging consumers an additional amount to visit the place where the spectacle is occurring, with the ‘the venue facility fee’ or ‘the venue restoration fee’. Apparently, it’s not enough that the consumer will likely make incremental F&B, Merchandise or Parking purchases whilst attending the event, increasingly they are expected to also contribute to the upkeep of ‘bricks & mortar’, whether historic and/or requiring some level of refurbishment and repair, or not.

When Fred Rosen accelerated the externalisation of ticketing from individual box offices to a centralised bureau solution, the economic model incentivised inventory supply (with key determinants being ticket volumes and face values) and chief executives were deeply impressed by the ability to turn-off various internal costs (box office personnel, contact centre operations, event marketing services, system licencing & website maintenance etc.) and for clients ticketing operations then became profit-centres with the adoption of service fees.

This externalisation process – from individual operator to aggregated agency – took place during a period of change in the dominant sales distribution channels: walk-up > advance purchase via box office sales > telesales via contact centres > web browser-based > social > mobile > digitisation.

The evolving mid-to-long term technology demands, skillset and expertise required to administer and operate within ticketing was seen, as least for a period of time, as roadblocks to continued independence, and the immediate economic and budgetary benefits of signing with agencies was apparent to many.

And once institutions had ‘sucked-on-the-teat’ of recoupable/non-recoupable rebates, and commissions then competition was reduced to competing ticketing agencies, typically differentiated by the level of fiscal incentives – or the perception that signing with one platform might means fewer events from an allied promoting organisation being available to your facility.

Initially the adoption of service fees was decried as North American brash capitalism but is now universally adopted, even by those performing arts institutions who still maintain their own ‘independent’ ticketing operations – albeit with pricing just below the market rates so they can still slut-shame the grubby commercial sector.

Ticketing: ‘A bad bad thing’

Baby did a bad bad thing
Baby did a bad bad thing
Baby did a bad bad thing
Feel like crying
I feel like crying

Chris Isaak – ‘Baby Did a Bad Bad Thing’

Despite the various issues of ticketing, overwhelmingly the vast, vast majority of times, consumers do gain access to the life-affirming, enriching spectacle of heightened emotion, tears (of joy), laughter, thrills and yes more tears of the live entertainment experience.

But when it goes wrong, then ticketing is just the worst. A bad, bad thing.

As illustrated by the TV footage of Mother & Daughter outside the arena in tears because events have seemingly sold out in seconds for their favourite androgynous K-Pop phenomena.

Or the inarticulate barrage of social media proving an outlet to disbelievers that event tickets are finite or accepting that live entertainment is an industrial commercial practice utilising yield-management and not just a participatory pastime.

Or the tattooed & head-shaven football supporter not-so-quietly remonstrating with hapless box office staff over the invalidity of their fake tickets.

Or silver-haired theatregoers befuddled by the opaque ticket pricing and distribution channels who are disappointed at their view from behind a pillar for the latest jukebox musical, but usually too polite to complain.

Or media interviews with populist free-market politicians lobbying against ‘crown jewel’ events being oversubscribed or out of reach to the common-man, whilst continuing to personally accept grace-and-favour hospitality.

When it goes wrong, ticketing is a big, bad, heartless, grubby, nasty business.

When demand exceeds supply.

Or when pricing and distribution isn’t perceived as equal or inclusive.

Then ticketing becomes a signifier of the inherent greed of the artist, promoter, venue, or all of them in combination. But one of its main service requirements is to plead guilty on behalf of its client-base. Ticketing always takes the rap.

Ticketing: The grand delusion

So ticketing is invariably disliked by both clients and consumers, but how does it treat its staff and employees?

Well, the short answer to that is, equally badly.

Unless of course you’re a senior executive within one of the major operators, who typically trumpet their importance as co-creators-of-events (‘look-at-me’, ‘look-what-I-did’), as opposed to being members of a team of technicians, service providers, retailers & distributors.

All too often staff within the ticketing industry work long, and oft anti-social hours. Manually working around the inadequacies of whatever internal budgets, tools, or ticketing technologies they are provided with.

Routinely they are young, first-jobbers, often freshly graduated, and keen to work alongside their preferred cultural or sporting interest. Or those returning to the workplace after childbirth or other career-change and are seeking something part-time, and yet still involved in the creative arts or sports community.

Their love of the performance or spectacle allows them to overlook the poor ticketing salary / compensation package and instead revel in their closeness to the artform, with ready access to the events albeit once work duties have been completed.

So the ticketing industry stresses the emotional care it provides.

The ‘love’ that dares not speak its name it selflessly gives to clients. The care and support it provides to customers, and the primary-colour, infantile playrooms/offices, breakfast cereals and dog-rooms for staff. Whilst oft failing to adequately pay a living wage for its junior personnel.

The industry messages that those working in ticketing are helping to drive audience development and engagement for the art form.

That ticketing is the passport to the spectacle and somehow that association imbues the day-to-day operations with some special quality. What some North American peers have referred to, in their uniquely folksy way, as the ‘magic behind the button’. (See various Op-Ed over the years from INTIX ACCESS.)

All of the leading ticketing industry personalities stress the loving character of its participants. How caring and supportive they are to both client, consumers, and colleagues.

How ticketing is therefore helping to nourish the soul – which is great because it often doesn’t support the body.

Ticketing is an occupation that for junior and mid-management levels routinely pays poorly when compared to other professions, and entry-point is often zero-hours contracts with little or no employment rights.

A proficiency in ticket sales, e-commerce, financial reporting, event management, and customer service, is usually taught ad-hoc in-post, and there is a constant churn-rate of disaffected professionals who drift away because of the lack of career development, and/or compensation.

The cap on personnel compensation is a by-product of the wider diminution of the role and central importance of ticketing.

No-one values ticketing, because ticketing companies don’t own anything, other than market-share contracts against other ticketing companies. The core technologies don’t fundamentally differ from one supplier to another. Thus, no-one values ticketing professionals because they don’t value … blah, blah, blah.

For example, in a recent (2023) advertisement by an international events promoter & ticketing conglom, they were seeking a manager to be ‘the sole point of contact for XXXXX at greenfield, stadium and arena level shows’.

The advert further stated the requirement to ‘prepare events for on-sale through co-ordination regarding price scaling; collation and distribution of event information; Fanclub and agent’s pre-sales, and notification to all box offices; manage of all agent allocations, focusing inventory to agents to maximise sales and revenue and represent Ticketing within the business, advising other departments and promoters on best practice and ensure we are working in the most efficient way’.

In this environment the individual might therefore be responsible for a single one-day event driving approx. 2M of ticketing revenues with an annual salary of 35K, for a post located in a major global city with net-of-tax and therefore before rent, transport, food and any after-work life, of approx. 500 weekly. Cheers!

Is it any wonder that the ‘great resignation’ has impacted the ticketing industry more than others? The drift away of ticketing expertise to communications / journalism, digital commerce, fintech, marketing or other service industries has been notable. The industry wide pandemic-driven redundancies forced many to seek a more lucrative, or stable line of work.

So, how to develop an appropriate compensation methodology for ticketing personnel?

The start surely has to be better understand the central importance of ticketing, and to establish new codes of behaviour and commercial practises between clients and consumers.

Then to support, train and provide pathways for advancement for ticketing personnel. Compensation needs to not just compare favourably with other industries but exceed them.

Ticketing needs to attract the best and the brightest, whom will not be afraid to then re-image the industry and its oft fossilised (‘that’s how it is’) practises.

But will the industry want to start this process?

***

Comments welcomed via the usual channels.

At the end of a year, especially in the usually quiet(er) moments between Xmas and New Year’s Eve, there is some opportunity for those within live entertainment and ticketing to reflect upon what occurred and what lies ahead.

The backward glance, or annual review, typically notes memorable experiences and occurrences, and oft attempts to codify or systematically arrange the evolving chaos of what was, into something that suggests a theme or what could-have-been. (Or ‘Praxis’ as Anthony H. Wilson was fond of misquoting.)

Anyway, 2022 the year that was, and 2023 soon-come.

For those who survived the Covid-interregnum (global deaths from COVID-19 as of 23.12.22: 6,656,601 https://covid19.who.int/) the ‘relaunch’ of live music during 2022 has been unequal.

Without ready access to capital, whether via debt financing, fund-raising, government grants or savings, artists, promoters, venues, and ticketing service providers alike have all struggled.

And even for those able to refinance, the impact of sector-specific inflation (talent, crew, production costs, fuel, and logistics etc.) and the general cost-of-living crisis has already impacted the industry, with 2023 likely to further highlight the difference between the highly consolidated international congloms, the extremely fragmented long-tail of more localised D-I-Y operators, and the economically depressed middle-market of performing arts, theatres and regional venues often more reliant upon civic funding partnerships and grants.

In the UK there has been a series of high-profile on-sales (Coldplay, Arctic Monkeys, Harry Styles, Peter Kay etc.) and festivals (Glastonbury) that continue to advance retail spectacularly well. But the mid-market is struggling to recapture the audience levels and engagement of 2019, and for the grassroots sector margins, which were never robust, have been further eroded.

And even those operators that have been able to relaunch (proclaiming record quarterly results), they are privately assuming that the ongoing event congestion – caused by the international backlog of pandemic-postponed events working through the calendar, as well as new on-sales from artists & attractions eager to get back on tour and earn – alongside the declining macro-economic conditions, will mean that in 2023 whilst the overall live music sector will likely continue to grow in gross revenue terms, individual events competing for the diminishing consumer wallet will increasingly struggle to reach breakeven let alone profitability.

For the major operators, it’s not entirely clear that there is a great deal of new, creative strategy or business practises, other than the implementation of dynamic pricing (all too often merely a strategy of squeezing-the-pips) and/or the digitisation of ticketing – enabling the contactless bundling of identity, access control, and wallet with the resultant capturing of incremental upsell margins and data.

There are however a few noteworthy trends that became apparent during 2022 and that will extend into 2023.

The identification of a live music industry

The COVID-19 enforced sector shutdown strengthened recognition of the need to work collaboratively in order to speak authoritatively to governments, regulatory authorities, taxation and/or funding organisations, and the need to accurately identify the scale, diversity and robustness of the sector.

This realisation directly led in the UK to the formation of LIVE (https://livemusic.biz/) which now represents a membership of fourteen trade associations, which initially worked on identifying sector revenues, GVA, and employment entering (https://69b459a1413e40d20dd5.b-cdn.net/wp-content/uploads/2020/10/Valuing-Live-Entertainment-July-2020.pdf ), during (https://69b459a1413e40d20dd5.b-cdn.net/wp-content/uploads/2021/04/REPORT_UK-Live-Music-at-a-Cliff-Edge.pdf), and then emerging from the pandemic, and is now proactively coordinating the lobbying for the re-introduction of a 5% VAT rate on tickets; the re-establishment of freedom of movement around the EU for people, vehicles and merchandise; and for the UK Government to formalise a Music Export Office.

Other noteworthy organisations, dynamically and creatively re-imaging a new live entertainment business include:

Attitude Is Everything (https://attitudeiseverything.org.uk/)

Nimbus Disability (https://www.nimbusdisability.com/) & the Access Card (https://www.accesscard.online/)

Safe Gigs For Women (https://sgfw.org.uk/), Women In CTRL (https://www.womeninctrl.com/) & the Keychange Initiative (https://www.keychange.eu/)

Music Venue Trust (https://www.musicvenuetrust.com/) (with the indefatigable Mark Davyd), and The NTIA (https://www.ntia.co.uk/)

Ongoing sector consolidation & fragmentation

The big vertically aligned international consolidators (typically combining artist management, concert, festival & tour promotions, venue operations, ticketing, advertising & sponsorship etc.) were historically North American, but there are now other congloms within Europe, South America, the Pacific Rim & Australasia, whom will continue to opportunistically grow, taking advantage of their scale, continued access to capital, and their ability to sustain event inventory supplier advances, commissions, incentives and rebates.

Conversely as these international empires consolidate, the process of aggregation and then post-transaction identification of cost-savings and synergies inevitably leads to the creation of a new generation of start-ups and independent operators – albeit typically without the same level of technical or service offering.

Their individual smaller scale and tighter margins also means they tend to be early supporters of grassroots and emerging music’s or the fringe art forms, and organisationally early and eager adopters of new ‘disruptive’ business technologies whether crowdsourcing, livestreaming, digital lanyards, blockchain-distributed ledgers, NFT’s, or developers of ‘middleware’ API solutions which have massively extended the reach of ticketing bundles and packages, and also enabled single authentication and identification of audiences at event point-of-entry.

Differential Pricing

As previously mentioned, yield management tools have now become commonplace for many in the industry to maximise return from the relatively limited number of events from an individual artist or attraction.

Traditional ticketing platforms typically cannot react ‘dynamically’ to demand and so the pricing tends to be differentiated by product offering: location – stalls, balcony, or festival ‘golden circle’ etc.; timing of purchase – pre-sale, on-sale, walk-up; and the bundling of ticket+ experiences: artist ‘Meet & Greets’, VIP & premium hospitality, and/or ‘Official’ hotel packaging etc.

Dynamic pricing also implies that lower demand should equate to lower ticket prices but the contractual economics of live music with pre-determined guarantees and ticket revenue splits, limit that freemarket fluidity.

However, the re-pricing of high-demand ticketing e.g., front-row seats etc. by the artist, promoter and other event Rights Owners has re-captured much of the arbitrage margin historically exploited by the secondary marketplaces, and the migration towards a single marketplace for ticketing with inventory always available, albeit at seemingly ever-increasing prices will continue to dominate short-termism event-specific strategies.

This pricing-practise however has implications for current and future audience engagement with live music, as forewarned by John Lennon in 1963 at the Royal Variety Performance ‘For our last number I’d like to ask your help. Would the people in the cheaper seats clap your hands? And the rest of you, if you’ll just rattle your jewellery.’

Additionally, the recent Bruce Springsteen and then Taylor Swift debates about ticket retail pricing, marketing, and distribution by apparently dominant, and allegedly ‘anti-competitive’ operators clearly illustrate the frustration and anger felt by many consumers, opportunistic media and regulators at upward-only pricing policies.

Unnecessary Financial Risks

Another key issue for the live music industry concerns the widescale intermingling of operational funds and escrow accounts by all organisations whether promoter/producers, venue operators and ticketing service providers.

It should be clear to all that advance ticket revenues are not theirs to spend, or even to transfer onwards to ticket inventory providers before the event occurs, unless suitable contractual Reps & Warranties and/or banking guarantees ensure the consumer has immediate access to a refund if the event(s) are under-delivered, postponed and/or cancelled.

Ticket revenues should be held within escrow accounts on behalf do the consumer until event maturity.

Recent high profile fiscal collapses by various live entertainment corporations are merely a foretaste of the widespread and arguably fraudulent use of advance ticket funds to ease the day-to-day operations of the sector.

It’s time for this malpractice to end before other organisations fail and the various regulatory authorities are forced to intervene. Or is this an opportunity for the sector equivalent of an ABTA / ATOL protection scheme?

Health & Safety

Lastly, as the year ended, the heart wrenching and tragic Asake concert at the O2 Academy Brixton has highlighted the need for event promoters, venues, licencing authorities and the police to work together with communities to ensure safe access to concerts and festivals, and for FOMO to never again lead to a reckless and unthinking threat to the wellbeing and life of those attending or working at events. 

Comments are welcomed, and do have a good 2023.

To end the year, I was delighted to be asked by Gordon Mason (https://www.linkedin.com/in/gordonmasson/), Editor IQ Magazine (https://www.linkedin.com/company/iq-magazine/) to write a few words outlining a ‘consumer’ (contrarian?) perspective on the recent Taylor Swift U.S. ‘Eras Tour’ presale, for the January 2023 Issue #116 (subscriptions via: https://www.iq-mag.net/subscribe/)

Obviously, this is an evolving story, and as the number of lawsuits and regulatory investigations continue, I should add the disclaimer that this is an Op-Ed (scribbled mid-December’22), and not meant to be a definitive overview of the causes or outcome(s) of the specific ticketing operations, pricing and retail distribution, nor a debate on the various antitrust and market competition issues.

Nevertheless, please comment via the usual channels.

Full article via IQ Magazine (https://www.iq-mag.net/) or https://tjchambers.com/

***

TAYLOR SWIFT – A CONSUMER PERSPECTIVE

With more than 30 years’ experience within the international ticketing and live entertainment sectors, Tim Chambers is managing director of TJChambers Consultancy Ltd. Here, he shares his insight into the controversy surrounding Taylor Swift’s US Eras Tour presale…

The Taylor Swift US Eras Tour presale has proved to be a lightning-rod for consumer dissatisfaction over contemporary ticketing retail and distribution.

This has apparently come as a complete surprise to industry insiders who fail to understand [that] how the business currently operates is perhaps not as efficient as they presumed (at the very least in terms of individual ticket selection and purchasing, identity verification, queuing and/or payment processing technologies) and that the current ticket retail and distribution channels (designed to suit the economic relationships between artist, promoter/producer, venue, marketing partner, and affiliates i.e. incentives, rebates, shared-commissions and co-owned data), may not be entirely to the satisfaction of the end-user, the consumer. You know, the people who actually pay to attend the IRL spectacle.

Ticketing: B-2-B orientated not B-2-C

For too long, consumers frustratingly waited in physical queues outside venue box offices and/or physical outlets; then, with the development of retail contact centres, dialled into premium-rate hotlines; or more recently joined online virtual queues for the possibility of acquiring tickets at stated face-value-plus for their favourite artist at a cost, time, and location typically more convenient with the event rights owners. 

To increase the likelihood of being successful in ticket purchase, consumers have increasingly opted to utilise various closed-user group facilities that appear to enable queue-jumping such as fan clubs, credit card memberships, venue loyalty schemes, or event co-promoter and/or sponsorship schemes. Albeit at some additional cost, in order toqualify for these supposedly ‘unique’ offerings.

For the more fiscally liquid consumer, there is also increasingly an array of yield-management designed, ‘exclusive’ ticketing including bundles (e.g., dynamically priced front-row seats, ticket + merchandise, artist meet & greet, ‘golden circle’ sections at festivals etc.) or packages (e.g., VIP & hospitality or ticket & travel/accommodation).

This bewildering array of oft-overlapping ticketing ‘offers’ is designed to raise competitive tension from competing event sponsors, advertisers, and ticket retailers, thus raising show grosses and/or service fees but can confuse and frustrate the consumer who appears to have more offerings but less actual choice.

Ticketing: A licence not a commodity

Following the usual law-of-unintended consequences, this (not) consumer-friendly attitude was one reason for the growth of unauthorised resale marketplaces, (where event rights owners claim the ticket is merely a restrictive licence and not a commodity) and the growth of ticket insurance schemes – where the consumer pays, again, to insure against the purchase they’re just made, with event rights owners receiving insurance commission kickbacks.

And so, following the ‘debacle’ of the Taylor Swift Eras Tour presale, when the Messina Group (AEG) successfully sold over 2M tickets (plus 400K via Capital One) in one day via Ticketmaster (Live Nation), the ticketing industry shrugs its collective shoulders and says, “Crisis? What crisis?”

Perhaps opportunistically, there has been a raft of US politicians who have denounced the alleged ‘anticompetitive’ and ‘fraudulent’ presale process. There have also been calls for the Department of Justice to revisit the 2010 Live Nation-Ticketmaster merger.

Lina Khan, chair of the Federal Trade Commission (FTC), has avoided directly commenting upon any potential review process but has offered the opinion that when, “firms become dominant, they become too big to care.” She further stated that typically for dominant operators, “There is a certain amount of investment in their services and their products that we don’t see because they’re not facing robust competition.”

Senators Richard Blumenthal and Marsha Blackburn have now asked Khan how the FTC plans to enforce the 2016 law known as the Better Online Ticket Sales (BOTS) Act, which was designed to crack down on the kind of illegal bots – claimed by Ticketmaster to be a key reason for their Eras system failure.

Jan Schakowsky and Gus Bilirakis of the House Energy and Commerce Committee have also written to Live Nation CEO Michael Rapino requesting that he clarify the ticketing process for the Eras tour and provide a list of actions the company will now take to ensure consumers will have better access to live entertainment in the future.

Lawsuits from Vigilante Legal, representing individual Taylor Swift fans, and another California lawsuit that alleges Ticketmaster violated the California Cartwright Act and the California Unfair Competition Law during its presale to “verified fans,” have also been served. This latest complaint seeks a civil fine of $2,500 per violation, alongside plaintiffs seeking the costs of attorneys’ fees and any additional relief the court deems.

So, the clamour to some remedial change in behaviour and/or market operations and increased sector competition is growing. And seemingly all initiated by a ‘failed’ presale of 2M+ ticket sales.

IQ Magazine, #116, Page 11 – January 2023,

***

A common discussion amongst attendees, presenters and delegates at the recent STAR AGM (https://www.star.org.uk/star-agm-seminar-2022/) and then the 10^th anniversary Ticketing Business Forum (https://www.ticketingbusinessforum.com/) was how the various ticketing industry congloms, service providers and sector support agencies were going to successfully emerge from the pandemic, and implement business strategies in an attempt to get themselves back to pre-coronavirus trading levels, and enterprise valuations.

Back-To-The-Future

2019, that ‘golden era’ when the chief concerns for operators within the ticketing sector was the competition for prospective client contracts; the ongoing commodification of ticketing technology (with clients and consumers seemingly always demanding more functionality, features, and services for static-per-unit revenues); creeping sector consolidation; and the economic authority of Rights Owners (whether Artists, Attractions, Theatrical Producers or Sport Franchises etc.) bullying ever-higher commissions, and/or rebates, is viewed by many as their key short-term future business objective i.e., to ‘go back’, or to re-establish a new ‘normal’.

COVID-19

Unfortunately, one clear lesson the pandemic revealed was how little control the ticketing industry has over its own collective well-being.

As ticketing is essentially a supply-side led sector – where ticketing platforms, apps and agencies all attempt to incentivise inventory supply, in order to then earn a margin off the original ticket face value and/or inventory volumes, by delivering event manifest management, experiential attendee insight and/or incremental retail, marketing & distribution – it could not survive without those attractions, events, experiences and spectacle.

Customer Service(s)

Whilst there were few new events during the pandemic, the industry was kept busy implementing PaaS (Postponement-as-a-Strategy) or CTD (Convert-to-Donation) where customers holding tickets for events were not granted a full refund for non-delivery but were instead directed to retain their FOMO-tokens and wait, then wait a little longer, or to consider donating their original purchase to the ‘worthy’ arts organisation rather than collect a refund which arguably they were morally, if not contractually due.

At best consumers who had previously bought tickets for major events, festivals, and tours in 2019 are still expectedly waiting for the once, twice, three-times delayed performances finally occurring in 2022, or even 2023. Meanwhile, some promoters crow about pent-up demand and highest ever seasonal attendances, neatly ignoring the impact of event congestion i.e., three years’ worth of events compacted into twelve months.

Recession’22-23

And as if COVID-19 and the ongoing festering Omicron variants weren’t bad enough, now live entertainment and the ticketing industry faces a set of new globally deteriorating macro-economic and cultural conditions: British Brexit-fuelled stagflation and international inflation driving up event costs alongside a tightening squeeze on consumer disposable income; the ongoing war in Ukraine; and the long-Covid cultural impact of audiences retrained away from attending live events i.e., those who had spent the last couple of years sitting on their sofas, consuming supermarket-priced alcohol with door-delivery fast food, watching endless streams of the latest long-form televisual series, subtitled movies, in-studio operatic performances with up-close n’personal musician profiles; or, for the more adventurous masked & immersive walk-throughs of brush-stroked name-your-favourite 20th Century artist.

Old Skool Thinking

The live entertainment sector has responded to the Covid-interregnum and the impending recession by attempting to clawback the ‘lost’ years of revenues with the top-loading of premium ticket prices, the widescale implementation of yield-management strategies and the drip-feeding of high-demand, low-supply inventory to maximise prices for VIP & experiential bundles & packages.

Alongside which, rather than back-fill with a full complement of experienced operational staff, companies have opted to prioritise selective client support i.e., ‘more with less’, and the wholesale externalising of formerly in-house functions including event concierge and production staff, or downsizing customer services with the increased utilisation of post-your-query automation (where the AI technology calculatingly frustrates rather resolves, with the resulting breakage dropping to the bottom line), and the growing use of (white-label) agencies, freelancers, and zero-hours contracts – causing one industry commentator to state: ‘Leaner, dumber and more dependent on others’.

Status Quo Bias

So still feeling its way back, the ticketing industry instinctively reaches for what it knows, i.e., tried-and-trusted / more-of-the-same, but that’s arguably not going to be enough.

The world has moved on. The past is a place, but we’re not there anymore.

Ticketing 3.0*

[*Where Ticketing 1.0 was The Box Office & Seat, Row, Block. Ticketing 2.0 – The Internet, the PC, & the Smartphone. And, Ticketing 3.0 – Digital Experiential Connected-Commerce]

The distressed nature of the traditional ticketing industry following almost two years of zero, or at best low revenues, leaves many commodified service providers unable to easily bounce-back, having exhausted their cash reserves, typically unsuccessful in various government grant applications and forced to utilise furloughs and then redundancies to survive.

So, we shouldn’t expect many sector incumbents to be able to move forward with confidence, or with easy access to capital, or still retaining a skilled & experienced workforce, and/or the historical levels of commercial creativity.

Rather, it is more likely that there will be a number of new entrants, plausibly from the vibrant and highly capitalised e-tailing and connect-to-consumer technology service providers, who typically all experienced a good-pandemic, and whom operate in areas adjacent to event ticketing and may seek to disrupt future market opportunities.

Its Digital Baby!

In the near-future i.e., now, Ticketing 3.0 is simply part of the digital Spectacle – Commerce – Technology interface.

Live entertainment i.e. Spectacle (with apologies to Guy Debord) is increasingly digital by nature (AR & immersive experiences, or Jumbotron & LED screens relaying the (distant) stage performance, Livestreaming & VOD, Metaverse, or Swedish popstars digitally re-imaging 1977 in a ‘virtual concert residency’); Commerce & Technology solutions are also enabling the growing ‘creator economy’ ($104.2Bn annually and counting!) to utilise new digital media formats with celebrity influencers, brand partners & creators disrupting the traditional entertainment structure ‘Artist > Management > Promoter > Venue > Audience’ to become ‘Creator/Influencer > Platform > Consumers’ with the overwhelming majority of content creators deriving little monetary gain for their creations, and with most of the benefits retained by the platforms – so what’s not to like?

Further tickets themselves are now almost entirely digital, with Blockchain, NFT & Web3 evangelists for decentralised databases, rules-based sales protocols, unique digital assets & artworks, or advocates for cryptocurrencies all gleefully claiming ownership of digital ticketing, whilst also aiming to subvert the traditional live entertainment business relationships by empowering the apparently disenfranchised Artists & Audience. But these solutions are not necessarily the only way to secure tickets.

Rather Ticketing 3.0 will be increasingly reliant on digital commerce platforms and technologies i.e., mobile-based ticketing and accreditation secured by identity verification including health status (e.g., COVID-19 test results, proof-of-vaccination); contactless payments & wallets; API’s enabling the bunding of tickets with 3^rd Party products e.g., Insurance, F&B, Merchandise, Travel & Accommodation etc. and ‘tickets’ that enable real-time messaging from event organisers & Rights Owners to end-consumers regarding venue access, traffic flows & queue-avoidance, changes in event line-ups, F&B flash sales or loyalty-based merchandising offers.

Further, the new Commerce & Technology solutions that will be adopted are already typically consumer-orientated platforms that encompass activities, events, games, messaging & merchandise within a slick UI that ‘intuitively’ identifies the user, incorporates personalised search & recommendations, with seamless integration of in-house content & 3^rd Party inventory. They are typically already global mass market players with a minimum of 300M+ monthly active users**, with deep access to capital and are oft-valued as a multiple of future earnings, and who will fundamentally impact the event ticketing experience even if they never take any direct ownership stake.

So, welcome to summer ’22 and the future of ticketing.

(**Name the usual tech suspects: Apple, Meta (Inc. Instagram & WhatsApp), Microsoft (Inc. LinkedIn & Skype), Only Fans, Patreon, Spotify, Substack, Tencent (Inc. WeChat), TikTok, Twitter, YouTube etc.)

Noted within The Ticketing Business newsletter:

#500 Viewpoint: Strategic thoughts to 2025+

With thanks to Ian Nuttall, Angelina Tennino, Lizzie Etherington and the entire The Ticketing Business (https://www.theticketingbusiness.com/) team for the opportunity to comment.

Also deep gratitude for all the Ticketing Business Forums (https://www.ticketingbusinessforum.com/) with their invaluable social & commercial networking, and sector intelligence-gathering.

And lastly, thanks for the 500 editions (and counting) of the newsletter.

© CDC

In early March 2020, with many international governments slow to react to initial levels of COVID-19 infections and seemingly paralysed by uncertainty as to what action, if any to take, a growing number of events cancelled or postponed: SXSW cancelled for the first time in 34 years; Ultra Music Festival In Miami cancelled; Coachella & Stagecoach festivals postponed and initially rescheduled to October 2020; BBC Radio1 cancelled its ‘Big Weekend’ music festival originally scheduled for May; and then the 50th anniversary of Glastonbury Festival was cancelled as a result of the threat of the developing pandemic.

The world’s major live-entertainment companies, combined to announce the formation of an industry task force which included Live Nation CEO and President Michael Rapino, AEG President and CEO Dan Beckerman, AEG Presents Chairman and CEO Jay Marciano, Creative Artists Agency Managing Partner and Head of the Music Division Rob Light, William Morris Endeavor Partner and Head of Music Marc Geiger, Paradigm talent agency founder and Chairman Sam Gores, Paradigm Head of Global Music Marty Diamond and United Talent Agency Global Head of Music David Zedeck. 

Together they confirmed the suspension of concerts, festivals and tours, initially until the end of that month (https://variety.com/2020/music/news/live-entertainment-agencies-caa-uta-live-nation-coronavirus-1203532222/) as a precautionary effort ‘in the best interest of artists, fans, staff, and the global community’.

On the 20^th March the UK Prime Minister then ordered all cafes, pubs and restaurants to close except for take-away food, whilst all the UK’s nightclubs, theatres, cinemas, gyms and leisure centres were told to close ‘as soon as they reasonably can’.

At that stage there was little appreciation of the likely impact of the pandemic in terms of the eventual tremendous loss of life, societal lockdowns, evolving health protocols and the long COVID-19 interregnum that would restrict any opportunity to re-embrace the spectacle of live music.

***

In the market research report ‘Music in the Air: The Show Must Go On’ (Goldman Sachs, Equity Research Report, May 14^th 2020) Goldman Sachs forecast that the COVID-19 impact to the global live music sector would be an approximate 75 percent downturn in revenues and declared that 2020 would be a ‘lost year’ for the industry.

 Global Live Music Market 2007 (Actual) – 2030 (Estimate)

© Goldman Sachs 2020

The report further noted that whilst live music had been one of the most resilient parts of the music industry for the last two decades, the nature of the crisis meant there was considerable uncertainty over the timing of any return and what that may look like.

Further commentary included the observation that following any relaunch for the initial period revenue per individual event would be lower, with an assumption of only 65% of that previously achieved in 2019. This performance was ‘impacted by potential caps on audience size/density, travel restrictions and general economic weakness weighing on consumers’ discretionary spend’.

More confidently Goldman Sachs did forecast that the long-term growth outlook for live music was intact as it was unclear as to whether livestreaming would replace the live experience. Further the ‘millennial experiential economy’ would continue to drive event demand and sponsorship revenues would return (because of the younger demographic’s continued attraction to live music), and that Artists would remain largely dependent upon touring to supplement their income.

The reality of COVID-19’s actual impact to the industry quickly became apparent within the various Quarterly Reports by public companies operating in the international live music sector, despite language designed to assure investors and the wider market:

Live Nation Entertainment (Live Nation Entertainment Reports Second Quarter 2020 Results – https://www.prnewswire.com/news-releases/live-nation-entertainment-reports-second-quarter-2020-results-301107033.htm 05.08.20);

Eventbrite (Eventbrite Reports Second Quarter 2020 Financial Results – https://www.businesswire.com/news/home/20200806005958/en/ 06.08.20);

Madison Square Garden Entertainment (Madison Square Garden Entertainment Corp. Reports Fourth Quarter & Fiscal 2020 Results – https://s23.q4cdn.com/910947899/files/doc_financials/2020/q4/MSGE-4Q’20-Release-Final-8-14-20.pdf 14.08.20);

CTS Eventim (CTS EVENTIM achieves balanced EBITDA in HY1/2020, in the midst of the coronavirus crisis and thanks to cost-cutting and efficiency-boosting measures – https://corporate.eventim.de/en/news-media/news/detail/News/cts-eventim-achieves-balanced-ebitda-in-hy12020-in-the-midst-of-the-coronavirus-crisis-and-thanks/ 20.08.20); and,

DEAG Deutsche Entertainment AG (DEAG with nearly balanced EBITDA in first half of 2020 despite the COVID-19 crisis – https://irpages2.eqs.com/websites/deag/English/999993/news-detail.html?headline2=&iframe=true&newsID=2023727 28.08.20).

***

Then in September 2020 PwC issued its ‘Global Entertainment & Media Outlook 2020-2024’ report which stated that revenues generated by live music ticket sales and sponsorships had already fallen 64% in 2020 with approximately US$18Bn having been wiped off the value of the international concert industry.

Unfortunately, for many in the live music sector the actual decline experienced was substantially worse.

But without a centralised UK live music reporting platform, it is difficult to accurately detail the specific COVID-19 impact to revenues, ongoing employment, organisations that utilised furloughs and/or redundancies, internships and apprenticeships lost due to the lockdown, individuals who may not have qualified for any of the various government business support schemes and/or claims for Universal Credit, or the number of companies that may have applied for loans but fell into financial administration.

However, the August 2020 ONS update (Coronavirus and the economic impacts on the UK: https://www.ons.gov.uk/businessindustryandtrade/business/businessservices/bulletins/coronavirusandtheeconomicimpactsontheuk/27august2020) reported that the arts, entertainment and recreation industry (albeit not an exact match for the live industry but the most similar ONS category) had the largest proportion of the workforce furloughed, at 51 percent (compared with 13 percent across all industries).  Additionally, 23 percent of the arts, entertainment and recreation businesses reported their risk of insolvency was severe to moderate (compared with 11 percent across all industries), and also reported the highest percentage of businesses indicating that footfall had decreased, at 76 percent when compared with normal expectations for this time of year.

Arts, Entertainment & Recreation Industry – Risk of Insolvency

© ONS ‘Coronavirus and the economic impacts on the UK’ (27 August 2020)

In addition to staff directly employed across the live music industry there are many freelancers, self-employed and zero-hours employees working across the broader ecosystem of the sector.

For example, for any event production, there is an army of crew who work on site in specialist roles, such as sound engineers, riggers, and lighting engineers. These technical experts are usually freelancers, working job-to-job, or employed week-to-week. 

Additionally, at any event there are also large numbers of less specialised support staff who work as stewards, concierge, bar staff and more.

Lastly, there are also highly specialised professionals, including lawyers, accountants, insurers, graphic designers, social media & marketing, as well as press & PR agencies, who typically work on a retainer contract basis, whom will all have experienced a substantive decline in demand for their services from the live music industry.

Their collective situation worsened during 2020 with complete shutdowns triggered across all international markets.

Subsequently two of the largest public companies operating in the global live sector, reported at the end of the year falls in annual revenues substantially worse than previously estimated, with Live Nation revealing an 84% decline (https://www.livenationentertainment.com/2021/02/live-nation-entertainment-reports-fourth-quarter-full-year-2020-results/), whilst CTS Eventim confirmed (https://corporate.eventim.de/en/news-media/news/detail/News/cts-eventim-focused-on-restart-of-live-culture-in-2021-after-a-year-of-coronavirus-crisis/) an 82.2% fall.

Additionally, the Carey & Chambers report for LIVE ‘UK Live Music: At A Cliff Edge’ (https://livemusic.biz/research-publications/) identified an annual revenue fall of 81% for the UK sector when compared with the previous year, with zero revenues for many operators since March 2020.

***

Across the global live music sector 2020 revenues therefore fell from the estimated $28Bn (2019) to little more than $5Bn with huge levels of ‘debt’ to consumers in the form of tickets acquired for postponed events. And 2021 did not bring any immediate relief.

Not in Q1.

And then not with any scale or consistency across many international territories (with the exception of Australasia) in Q2.

There was increasingly a sector-wide realisation that any relaunch, whenever it would occur, was beyond the direct control of the industry and so the lobbying of civic and national governments, funding agencies and regulators accelerated.

The key issues were the ongoing fiscal collapse of live event partners (at all levels) caused by a non-existent cashflow directly linked to the legal inability to re-open; the timing and scale of various vaccination programmes and transmission of COVID-19 variants; the limitations on event capacities due to social-distancing measures with associated P&L impact; and event-specific matters such as event insurance (including pandemic-related cancellation, artist & public liability), the logistics of equipment and personnel, improved event hygiene protocols, and the hoped-for consumer desire to return to mass-spectator activities.

Locally, campaigning by the AIF, LIVE, MVT, NTIA and UK Music (amongst others) with the apparent support of the Commons DCMS Select Committee, were however faced by a UK Government that felt unable (or unwilling?) to lend specific sector support.

And then the June 21^st timetable for relaxation of the social-distancing restrictions on events, was threatened with a further delay.

As noted by Mark Davyd (MVT) ‘It’s not ‘just 1 more month’. It’s 16 months, not 15 months, of closure. 7% more debt.‘ (https://twitter.com/markdavyd/status/1402514052325199873)

***

To be continued …

In Other News: June’21 (1/5) ‘Bread & Circuses’ –https://tjchambers.com/2021/06/10/in-other-news-june21-1-5-bread-circuses

In Other News: June’21 (2/5) ‘How Big Was Big?’ – https://tjchambers.com/2021/06/10/in-other-news-june21-2-5-how-big-was-big/

In Other News: June’21 (3/5) Growth, Consolidation & Hubris – https://tjchambers.com/2021/06/11/in-other-news-june21-3-5-growth-consolidation-hubris/

The largest single operator within the live music industry is Live Nation, formed in 2005 following its spin-off from Clear Channel Entertainment, and since its subsequent merger with Ticketmaster in 2010 (described at the time by The Economist as ‘a union of pariahs’ – https://www.economist.com/business/2010/01/28/a-union-of-pariahs), the acquisitive conglomerate has experienced a dramatic increase in concert revenues, audience and managed events.

In its last Pre-Coronavirus Annual Report (https://investors.livenationentertainment.com/sec-filings/annual-reports/content/0001335258-20-000028/0001335258-20-000028.pdf) Live Nation stated ‘we are the largest producer of live music concerts in the world …. connecting nearly 98 million fans to more than 40,000 events for over 5,000 artists in 2019.’

The precise market share that Live Nation and Ticketmaster has developed in North America and elsewhere varies, primarily due to an internal or external perspective, from a competitive 30% to an aggressive and monopolistic 70%, and then some.

Anti-trust scrutiny and/or competition regulation is normally triggered by an agreed definition of market with accurate measurement of its leading operators, something that the live music industry (or regulators) has seemingly been unable to calculate with no agreed clarity regarding who are (like-for-like) sector competitors, clear definition of GTV, revenues, or actual ticket sales etc. and with little apparent desire for such sector transparency.

Nevertheless, in July 2020 Live Nation agreed with the DOJ to extend for a further five years, various anti-trust undertakings relating to the 2010 merger with Ticketmaster (‘Final Judgement’ – https://www.justice.gov/atr/case-document/final-judgment-180) and ‘to abide by certain behavioural remedies and to provide periodic reports to the DOJ about our compliance’ for a further five years (https://www.justice.gov/opa/pr/court-enters-judgment-significantly-modifies-and-extends-consent-decree-live).

The reason for this extension was, according to Assistant Attorney General Makan Delrahim of the Justice Department’s Antitrust Division, Live Nation apparently ‘broke the promises they made to the court and to the American People’ (https://www.musicbusinessworldwide.com/doj-says-that-live-nation-broke-the-promises-of-the-american-people-as-court-enters-judgment-that-modifies-and-extends-consent-decree/).

Additionally, in the UK Live Nation is understood to control approximately 25% of all music festivals above 5,000 capacity with the Association of Independent Festivals (AIF) amongst others calling for an investigation from the Competition & Markets Authority (https://www.billboard.com/articles/business/8472591/live-nation-growing-market-share-indie-festivals-aif-research).

Live Nation Entertainment’s concert revenues 2008-19 (US $Bn)

© Statista / Live Nation

However, Live Nation within its SEC filings and other public pronouncements continues to declare that competition in the live entertainment industry is intense. It further stresses that it competes primarily on the ability to deliver quality music events, sell tickets, and provide enhanced fan and artist experiences, arguing that its track record, reputation, and fiscal stability are key strengths. (Not withstanding the substantive addtional $1.2Bn debt taken on to weather the COVID-19 crisis.)

Despite the ‘enviable market share’, especially in North America, and its growing international network (https://www.livenationentertainment.com/global-sites/) there are still a number of sector competitors including: AEG Presents; Caesars Entertainment; Evenko; FKP Scorpio; I.M.P.; Kilimanjaro Live / DEAG; Ocesa / CIE; TEG Dainty / TEG Live etc.

Albeit economists have noted the oligopoly market structure, with a consolidating number of larger multi-territorial operators increasingly dominating the industry and deterring new entrants from competing for significant market share.

This live sector consolidation follows a decade-plus period of growth, with more venues, whether nightclubs, theatres, arenas, stadia, or greenfield sites, in more international territories, increasingly attracting sponsors and promotional partners for a growing number of events enthusiastically attended in greater numbers by consumers (rebadged as fans), who increasingly pay more, and more, to see their favourite Artists perform.

The Power of Live

© PwC Global Entertainment / Live Nation (2018) – https://livenationforbrands.com/wp-content/uploads/2019/04/LN_Power-of-Live_WhitePaper.pdf

In the live music industry the Artist / Attraction / Star is the prime economic beneficiary of concerts, residencies or tours, albeit that promotion, marketing & ticketing distribution has historically been key to event monetisation.

So the incentivisation of talent has been a key obective for the live music industry – in order for others to then earn their margin (For further analysis of live music economics and net Artist earnings: ‘Putting The Band Back Together’ Jason Bazinet, Mark May, Kota Ezawa et al. (2018) – https://www.citivelocity.com/citigps/music-industry/).

As noted by the Wall Street Journal in December 2019, live revenues then accounted for some 75% of (gross) musician’s income (Anne Steele ‘Why Concert Tickets Are So Expensive. Over the past decade, the average ticket price for the top 100 North American tours has increased 55% to $94.83’ – https://www.wsj.com/articles/why-concert-tickets-are-so-expensive-11577371024) and the immediate future seemed assured for the live industry.

In a triumphant, if not hubristic, Pollstar 2019 end-of-year report:

‘Perhaps the best way to sum up our industry’s phenomenal growth for this year, the past five years and for the decade would be to reference a song title by this year’s Artist of the Year, Pink.

Her ‘Beautiful Trauma Tour’ topped 2019’s Worldwide Tour Chart with $215.2 million dollars and she’s No. 16 on our Decade Chart, grossing a massive $626 million. As an artist who doesn’t mince words, she might say the many successes of this business are ‘Fuckin’ Perfect’ (https://www.pollstar.com/article/pollstar-2019-year-end-special-142982)

And then came the pandemic.

***

To be continued ….

In Other News: June’21 (1/5) ‘Bread & Circuses’ – https://tjchambers.com/2021/06/10/in-other-news-june21-1-5-bread-circuses/

In Other News: June’21 (2/5) ‘How Big Was Big?’ – https://tjchambers.com/2021/06/10/in-other-news-june21-2-5-how-big-was-big/

The Global (Recorded + Live) Music Industry (2019)

Music is vitally important to millions across many generations, providing not just an evolving soundtrack, but for many an inspiration to personal identity and self-worth, providing access to a shared experience, community, fun and good times – ‘sex n’drugs & rock n’roll’.

Historically the recorded and publishing sectors dominated the cultural perception and commercial reality of music industry revenues controlling content, marketing and release schedules, pricing, licensing, and distribution with touring plans typically scheduled to follow album release priorities and extend catalogue revenues.

However, commentators over recent years have highlighted the money shift that occurred following the advent of internet file-sharing, whereby a whole generation opted out of paying to consume recorded music. 

For a decade and more live revenues grew whilst recorded shrank until the scalable adoption of streaming whose technology (largely developed by former bit-torrent ‘poachers turned gamekeepers’) with slick UI, convenience and near-universal catalogues finally enabled some form of return to health for the record companies (leaving to one side for the moment the ongoing debate about the level of net music streaming royalties paid to individual artists) with approximately $20.2Bn total revenues in 2019.

Global Recorded Music Industry Revenues 2001-19 (US $Bn)

(c) IFPI

By comparison, the live music industry experienced significant and prolonged growth during the same period with PricewaterhouseCoopers (PwC) calculating that the total revenues of the live sector (ticket sales + event sponsorship) eventually exceeded that of recorded + publishing + sync.

Global Entertainment & Media Outlook 2011-2020

(c) PwC / Ovum

Within a later edition of its annual report ‘Global Entertainment & Media Outlook 2018-2022’ PwC then predicted that global ticket sales would grow from just over $22Bn in 2019 to more than $25Bn in 2023, whilst live music sponsorship would also grow from $5.91Bn to $6.46Bn over the same period, equating to a live music industry worth approximately $31.49bn in 2023 (https://www.iq-mag.net/2019/09/global-live-music-ticket-sales-top-25bn-pwc-outlook-2019/).

But concentrating on actuals as opposed to projections (with research collated from various public and private sources), in 2019 the combined global music industry (recorded + live) therefore equated to approximately $48Bn, of which recorded contributed $20Bn and live music $28Bn.

So how big was big? – $48Bn big! (2019)

So whilst the Pandemic meant recorded music consumption increased by approximately 12% (see the excellent Midia Research: https://www.midiaresearch.com/blog/the-covid-bounce-and-the-coming-attention-recession) the live industry has been effectively shutdown.

And to rebuild back to $28Bn is going to be far more difficult, and arguably take longer than desired by all participants.

To be continued ….

Summer 2021 & the return of ’panem et circenses’

As the live music industry nervously gears up for its return (‘The first to close, the last to reopen’), mindful of the evolving regulatory authorities’ response to COVID-19, vaccination roll-outs, levels and locations of any new Coronavirus variants, and their own internal organisational and fiscal preparedness, there are a number of questions relating to both the velocity and scale of any relaunch.

Not least because the hoped-for recovery may not be nearly as swift or as straightforward as desired following the last year+ of postponements, cancellations, and multiple lockdowns with politically-directed and oft inconsistent health guidelines.

As discussed in previous posts, the speed of any return, whether to the golden-era of 2019, or earlier, will depend upon a number of factors including: (international) Artist availability (Will domestic talent be able to exploit staggered market re-openings?); the accessibility of event and public liability insurance; the distressed events supplier services and logistics sectors; the need for local licensing authority agreements; and the cashflow impact of the COVID-19 shutdown(s) to event organisers – many of whom have utilised employee furloughs, redundancies, supplier contract terminations and event postponement (avoiding the need to offer consumer refunds for cancelled events) in a desperate attempt to survive.

The cash-deprived live sector, which historically has operated on thin-margins (typically requiring 70%+ paying capacity and then access to bar sales or other incremental revenues for event breakeven), cannot effectively operate with restrictive timeslots or socially-distanced reduced capacities that for example restaurants, galleries, museums, or theme parks have incorporated.

Some Promoter / Producers have already re-negotiated Artist fees requiring a greater level of shared risk, lower or no guarantees, applied downward pressure on show settlements and service supplier agreements to reflect the inherent risk of any relaunch with potentially smaller and/or nervous audiences coupled with the fragility of their own operations as they attempt to recoup the COVID-19 related costs of any newly onboarded corporate debt.

There is also the fiscal and operational reality that aside from restricted capacities some venues and event organisers may struggle to implement any required contactless technologies, increased ventilation, protective equipment for staff, and new health & safety signage whilst ensuring more regularised and intensive site cleaning is undertaken.

Additionally, many of the show reps, stage, sound & lighting crews, security, concierge, and concessions staff and all the other freelance, self-employed or zero hours employees who provide the oft invisible labour force that makes live music possible have all endured complicated, if not futile, efforts to attract furlough support, or collect unemployment benefits.

And so many may have been forced to take on other work, with employers reticent to re-hire too quickly. So the UK live events labour market does not yet show any rebound – ‘Lockdown restrictions continue to affect jobs and vacancies in two industry sectors more than others, with vacancies in arts, entertainment and recreation down 78.9% (18,000) from a year ago’ – https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/employmentandemployeetypes/bulletins/jobsandvacanciesintheuk/april2021#vacancies-for-january-2021-to-march-2021

And then consumers attending events in 2021 (and beyond) may also be presented with a potentially emotionally dislocating event environment which includes: travelling to venues via reduced-capacity public transport with mandatory masks and the more anxious also carrying anti-viral wipes, tissues and disposable gloves; identity verification with temperature scans and/or health certification checks at event entrance; digital ticketing; contactless payments; the enforcement of some form of social-distancing within the event, with traffic-flows for access & egress to bars (dispensing single-portion pre-packaged F&B) and toilet facilities ideally with plentiful hand-sanitiser stations, all supported by onsite First-Aiders & Paramedics not at all exhausted after sixteen months on the COVID-19 front-line.

Will the ‘new normal’ therefore be a more restrained experience, with at least initially, fewer events and venues open, for a smaller than previous number of Artists able to perform (impacted by potentially lower show grosses as well as the added complications of travelling, especially for international artists) with lower than previous staffing levels, or will there be a ‘Roarin20s’ or ‘années folles’ of artistic and cultural dynamism with accelerated consumption?

Arguably it is more likely that the tremendous loss of life – over 152,000 (as of June 2021) in the UK alone – and the macroeconomic impact of the 2020-21 lockdown(s) will re-shape the existing codes of business behaviour, the level, and types of audience engagement as well as the commercial operations of the live music industry.

COVID-19 could prove to be a disruptive moment for live music in the same way that Napster impacted the recorded industry.

*****

However, many Promoters have already claimed that there is an overwhelming demand for the return of live (Do you really expect them to say anything to the contrary?), from both Artists wanting to tour (Not least for economic self-necessity) and by Audiences wanting to re-embrace the live experience.

The daily announcement of new concerts and tours for 2022 and beyond is taken as proof-positive of the strength of this relaunch.

But closer examination of the actual ticket sales reveals many are previous bookings (from as far back as 2019) where customers have retained their tickets in nervous expectation of eventually attending, and new onsales are not consistently being embraced by audiences – in part because of the (over) supply exceeding demand for new events.

Promoters are trumpeting the fact that 2022 is ‘much stronger than usual’, with almost twice as many major touring artists on cycle than a typical year.

But are there more venues or twice as many weekend nights available next year? Further are audiences financially able and likely to attend twice as many events as in previous years?

Or will the glut of tour onsale announcements inevitably become the live music equivalent of ‘shipping platinum and returning gold’ i.e. can everything sell-out, or at least achieve breakeven?

Will the industry be able to adapt to and successfully integrate the new (temporary?) health protocols, and event capacity restrictions, whilst ensuring budgeted breakeven-plus (To aid their commercial relaunch and to pay down some of their newly acquired debt), and re-establish the formula of ticket pre-sales funding events several months in advance of the actual spectacle?

Or will Artists, and/or Rights Owners, and their Audiences continue to adopt new innovative platforms enabling remote but immersive connection, and monetisation, whether via gaming, livestreaming, AR, or VR, and, at least partially, sidestep the live experience?

To be continued …

Proud to announce the release today of the ‘UK Live Music: At A Cliff Edge’ report produced in conjunction with Chris Carey (https://www.linkedin.com/in/cjcarey/) on behalf of LIVE (Live Music Industry Venues & Entertainment).

The live music industry has been devasted by the impact of COVID-19 with the enforced shutdown of concerts, festivals and tours, the suspension of furlough support, little sector-specific support, major operators forced to make redundant hundreds at a time, and thousands of self-employed, freelancers and zero-hours staff losing their livelihoods.

Report findings include:

In 2019 live music supported 210,000 full-time equivalent roles, as well as tens of thousands of freelancers & contributed £4.5 billion to the UK economy

In 2020, revenue in the live music business will fall by 81%, and revenues have been close to zero since March

50% of permanent roles will be lost by the end of the year while temporary and freelance roles have already been decimated, totalling 170,000 job losses across the sector by year-end

Download the report here: https://cdn.iq-mag.net/wp-content/uploads/2020/10/REPORT_UK-Live-Music-at-a-Cliff-Edge.pdf