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Op-Ed: Who Will Fill Our Arenas Next?

Noted within the Ticketing Business News (https://www.theticketingbusiness.com/2020/08/05/farewell-top-40-will-fill-arenas-next), which artists and events post-COVID will fill the global arena network?

 

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Farewell to the Top 40: Who will fill our arenas next?

Posted by TheTicketingBusiness

5th August 2020

Image credit @StateFarmStdm

…..

An eventual return to large-scale international live touring in 2021/22 is obviously subject to access to an effective vaccine(s).

Alongside which is the availability of reasonably-priced event and public liability insurance, the re-contracting of touring logistics (event production, equipment and crew – all typically freelance or self-employed and some of whom may not have fiscally survived the COVID-19 interregnum), enhanced Health & Safety protocols with increased requirements for audience identification and monitoring leading to potentially reduced event capacities, and the new show deals potentially exposing artists to greater levels of risk with low-or-no guarantees, will all combine to usher in a new era of live entertainment.

For the live touring sector there has long been some concern regarding the aging group of heritage acts and stadium rockstars – Aerosmith, Billy Joel, Bruce Springsteen, Elton John, Roger Waters, Rolling Stones, The Who etc. as ‘Saint Death’ inevitably takes hostages.

For concert promoters and festival organisers which of the younger generation would combine that mass market appeal, back catalogue and the desire to tour with the necessary theatrical flair for album-based multi-hour spectaculars?

 

Whilst they are generally younger than the artists who first came to popular acclaim in the sixties and seventies, are Coldplay, The Killers, Madonna, Metallica, Pink!, Red Hot Chili Peppers, TakeThat or U2 going to commit to the next twenty-to-thirty years with the rigours of touring, and also have a global audience?

Perhaps the new generation of hip hop / rap / dance crossover: Ariana Grande, Beyonce, Chance The Rapper, Drake, Eminem, JayZ, Justin Timberlake, Kanye West, or Usher with the growing internationalisation of tours expanding into China & the Pacific Rim, South America, and eventually Africa will become the predominate touring culture?

This does not mean that the increasingly niche rock market goes away, it just exists alongside Classical, Jazz, Opera and other ossified musical art forms – supported by historical government funding, advertorial media and the slow-moving record business.

Essentially the global live sector is evolving from white rock’n’roll, to a more contemporary and diverse RnB sound with artists that have also attracted new and different audiences – younger, more culturally diverse, socially engaged via smart phones, and experientially-orientated (as the cost of ownership is typically beyond them with housing, transportation & workspaces via subscription – AirBnb, Lime Scooters, Lyft, Uber, WeWork etc.).

 

The new live music audiences are young, urban and internationalist. They are working longer hours with relatively lower disposable personal income. The digitalisation of content means they experience music via their phones, on the move, or in bars and clubs – the traditional distribution channels of radio, billboard & print has been disrupted.  The new consumers stream music but typically don’t buy the physical product. They applaud individual tunes but don’t need to appreciate longer format releases.

To monetise this audience international tour promoters will target the growing global network of arenas (10k+ capacity) in the world’s top 200 capital cities. Whereas the larger theatres are usually only 3K-5K and are typically orientated towards the performing arts and theatre sector, and so the architecture and facilities tend to reflect those core civic constituencies and associated cultural and service requirement i.e. Founder & Sponsor Hospitality, Orchestra Pits, Acoustic Baffling & signature Architectural design. These lower capacity venues also typically don’t provide sufficient event ticketing ROI to incentivise the touring talent and their international event producers.

Arenas provide a controlled environment where the architecture and operations of the event space have been highly commoditised and producers everywhere know how to create, organise, and execute successfully. Load-In/Out, Stage Width & Access, Hang-Points & Overhead Clearance, Power Supply, Dressing Rooms, Parking and VIP Meet’n’Greet Facilities are all increasingly standardized within climate-controlled, concrete concourses and padded seats enabling the bling-conscious middle-class of Bangalore, Bogota or Bucharest to all experience the latest concert, theatrical or movie experience.

 

So, post-COVID whilst there will be fewer blockbuster stadium tours by aging artists celebrating their forty-year careers, it is likely that – because of the new economic and hygiene constraints but aided by the growth of arenas – there will be many more touring artists, albeit possibly only enjoying a four-year career reflecting their pop career, hit-tune, TV spectacular background, or other fleeting breakthrough-moment.

***

For further details please review at Ticketing Business News (https://www.theticketingbusiness.com/2020/08/05/farewell-top-40-will-fill-arenas-next/)

***

 

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Live Nation Entertainment Has Received Approx. $60M In COVID-19 Payroll State Aid, Thus Far

 

Noted within the Live Nation Entertainment Inc. Q2 2020 Results:

Cost and Cash Management Programs

Given the uncertainty associated with the duration of current conditions globally, we have implemented a number of initiatives to reduce fixed costs and conserve cash. As part of these cost reduction efforts, we have implemented salary reductions for most of our employees, with salaries for senior executives reduced by up to 50%. Additional cost reduction efforts include hiring freezes, reduction in the use of contractors, rent re-negotiations, furloughs, and reduction or elimination of other discretionary spending, including, among other things, travel and entertainment, repairs and maintenance, and marketing.

We are also making full use of government support programs globally. In most European and Asian markets, including the United Kingdom, Germany, Italy, France, Spain and Australia, there are robust payroll support programs to mitigate a substantial portion of employee costs. Additionally, in the United States, we have filed for payroll support under the Employee Retention Credit program established as part of the 2020 CARES Act and expect to receive additional support in the second half of the year. Finally, the CARES Act also provides for deferred payment of the employer portion of social security taxes through the end of 2020, with 50% of the deferred amount due December 31, 2021 and the remaining 50% due December 31, 2022.

Form 10-Q (https://investors.livenationentertainment.com/sec-filings/all-sec-filings/content/0001335258-20-000150/0001335258-20-000150.pdf), Page 12.

Specifically:

The company’s $432 million adjusted operating income (AOI) loss for the quarter was driven primarily by operational fixed costs of approximately $334 million, inclusive of approximately $60 million in benefits from various government payroll funding programs.

Live Nation Entertainment, Supplemental Operational & Financial Information (https://d1io3yog0oux5.cloudfront.net/_d6ab90581b6763b6c69e24e9b9d8513d/livenationentertainment/db/670/6151/supplemental_operational_and_financial_information/Q2+2020+Supplemental+Operational+and+Financial+Information%5B4%5D.pdf), Page 1.

 

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US Ticket Resale Borrows $77.5M

Noted within the Ticketing Business News (https://www.theticketingbusiness.com/2020/07/17/us-secondary-ticketing-sector-loans-77-5m-ppp-remain-afloat/) a number of US ticket resale companies have borrowed $77.5M from the Government Paycheck Protection Program (PPP), as of July 2020.

The US secondary ticketing sector is borrowing up to $77.5m via the Paycheck Protection Program (PPP) to remain afloat amid the COVID-19 pandemic, which has brought the live events industry to a complete standstill for four months ……’

***

Until there are new onsales for new events, at scale, ticket retail companies are living on borrowed time, and for postponed events on consumers cash.

 

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#LetTheMusicPlay

Live Music & Theatre Research (June 2020)

Delighted to have been able to assist Chris Carey (https://www.linkedin.com/in/cjcarey/) noted data scientist, conference organizer, cricket-obsessive and Head of Marketing at TicketSwap (https://www.linkedin.com/company/ticketswap/), in the recent ‘Valuation of the UK Live Entertainment Industries’ research project.


At short notice, we were requested to produce a model of the UK live music and theatre sectors detailing Gross Value Added, Revenues & Employment etc. impacting the UK national economy.

The key findings were then used within the recent #LetTheMusicPlay campaign and also supported the wider live entertainment submission to the DCMS in the campaign for financial support from the UK Government: https://www.gov.uk/government/news/157-billion-investment-to-protect-britains-world-class-cultural-arts-and-heritage-institutions.

  • Live Entertainment and Theatre generates £11.25 Billion in Gross Added Value (GVA) in each year
  • Theatre contributes £4.8 Billion GVA, supporting 290,000 jobs
  • Music contributes £4.5 Billion GVA with £2.74 Billion GVA from Concerts and £1.76 Billion GVA from Festivals
  • Music supports 210,000 FTE jobs with 125,000 through Concerts and 85,000 through Festivals
  • Other Entertainment contributes £1.95 Billion GVA contributing another 100,000 jobs

 

Under the time constraint it was not possible to commission new lengthy assessments, so instead the approach was to take existing published insights combined with sector expertise and private data from various industry sources to best represent the sectors on a consistent basis. 

We attempted to harmonize definitions, avoid any double-counting of revenues by the differing sector service providers (for example, collection agencies and ticketing), whilst modelling additional contributions from organisations representing artists, concert promoters, festivals, and grassroots music venues to produce a coherent structure for sector definition.

We also developed a methodology for defining ancillary services and incremental spend around events, to provide a clear understanding of the total live entertainment activities and economic impact.

The figures for live music were largely built by aggregating various sector reports including UK Music’s (https://www.linkedin.com/company/uk-music-ltd/) long-established ’Music By Numbers’ analysis, the National Arenas Association (NAA) and the Association of Independent Festivals (AIF) annual reports, with other contributions including work by the British Association of Concert Halls (BACH) and the Music Venue Trust (MVT).

For the theatre sector we utilised the invaluable Society of London Theatre / UK Theatre annual reports, as well as data received from the Really Useful Group which utilised pre-existing Arts Council methodology.

We are grateful to all organisations and individuals for their support of this cross industry effort, but especially ILMC (https://www.linkedin.com/company/international-live-music-conference-ilmc-/) / IQ Magazine (https://www.linkedin.com/company/iq-magazine/), Really Useful Group, and UK Music.

Further enquiries regarding the research are directed to: chris@mediainsightconsulting.com

 

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Now to the gangster shit: Ticket fees.

Noted within the Testset (https://testset.io/) article:

Live Nation Canceled Bonnaroo 2020 Today, ACL is Next?
by testset June 25, 2020

…..

Now to the gangster shit: Ticket fees.

Ticketmaster, a wholly owned subsidiary of Live Nation, argues that when they sell you a ticket, they are rendering a service. Hence, all of the fees they add to tickets are non-refundable. This includes service fees, facility fees, taxes, etc. Then, when you go to buy a ticket to the refunded, postponed and now rescheduled event, you pay those fees all over again. This is a comical dance and it’s absurdity is not lost on other commentators. Tim Chambers (https://www.theticketingbusiness.com/2020/05/07/debate-booking-fees-refunded/) an expert on the concert industry and ticketing, does a great job of articulating this problem:

“From the perspective of the disappointed fan, patron or supporter, the response is immediate and clear, if an event is cancelled, they would expect a refund in full i.e. the price they paid. Assuming they bought via a primary source (how would the consumer know any differently?) and after excitedly waiting several months since the OnSale, during which they confirm their identity, contact details, payment and agreement to receiving follow-up marketing messages from the artist / promoter / venue / sponsor / ticket retailer, it’s disappointment enough that the event is not happening. But to add insult to injury ticket retailers then routinely expect that consumers will accept that a partial service has been provided, and therefore only part-refund will take place ‘*as specified in the original (small-print) 30-point Terms & Conditions’. The argument being that as the now invalid tickets (whether physical or digital) have been delivered in advance, and that a part-service has been provided, this must therefore be paid for, by the disappointed ticket-buyer.”

The retailer then typically informs the consumer that refunds for the original ticket face-value may be further delayed whilst they retrieve revenues advanced to the event organiser (as per their internal supply-side agreement) and that it may take up to 30 days to process their refund request – comparing somewhat less favourably from the micro-seconds it took to take payment all those months ago.”

***

For further details: https://testset.io/2020/06/25/live-nation-canceled-bonnaroo-2020-today-acl-is-next/

And thanks to Testset.

 

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Examining COVID-19’s Impact on Britain’s Live and Recorded Music Industries

Delighted to have been able to assist noted economist Will Page (https://www.linkedin.com/in/wpage/) in his examination of the impact COVID-19 has on the UK Live and Recorded Music industries.

(c) Will Page / Billboard / PRS / ERA 

For further details please review:

https://www.billboard.com/articles/business/9407455/covid-19-impact-britain-live-recorded-music-industries


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Point de vue

Via Printzblog https://printzblog.com/

With thanks to Patrick Printz

 

30th May 2020

Point de vue: Le coronavirus représente une menace existentielle pour le modèle économique établi de l’industrie du spectacle

De T.J. Chambers sur son blog (en anglais): https://tjchambers.com/2020/05/21/clear-and-present-danger/

Le carnage économique et culturel de la pandémie de coronavirus, avec l’annulation de concerts et de festivals, la fermeture de sites, les permissions de sortie des agences d’artistes, des promoteurs/producteurs et le report d’événements jusqu’à je ne sais quand, marque une période de repli fondamental pour l’industrie du spectacle vivant telle qu’elle se présente actuellement.

La suspension des événements et des divertissements en présence d’un public n’est pas due à un changement dans le désir fondamental d’une expérience commune et partagée des performances culturelles, mais plutôt aux restrictions globales de sécurité sanitaire et de bien-être social concernant la sécurité des rassemblements et des voyages publics.

Toutefois, le verrouillage a révélé de manière flagrante la fragilité du modèle économique actuel du secteur du spectacle vivant (Artiste > Promoteur > Lieu > Sponsor > Billetterie > Consommateur), qui repose essentiellement sur le consommateur final pour financer à l’avance les opérations du secteur.

For further details: https://printzblog.com/2020/05/30/point-de-vue-le-coronavirus-represente-une-menace-existentielle-pour-le-modele-economique-etabli-de-lindustrie-du-spectacle-vivant/

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Should #Ticket Sellers Refund Booking Fees If Events Are Cancelled?

Via Ticketing Business: https://www.theticketingbusiness.com/

Debate: Should booking fees be refunded?

7th May 2020

 

With TJChambers, Jonathan Brown, Chief Executive, Society of Ticket Agents and Retailers (STAR), and Steve Lee, President, Fair Ticketing Alliance

‘The issue, which has vexed ticketholders and left them out of pocket, has been hotly debated on social media and fans have taken to Twitter and other platforms to complain: Should ticket sellers refund booking fees if events are cancelled?

For further details:

https://www.theticketingbusiness.com/2020/05/07/debate-booking-fees-refunded/

 

 

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#GeorgeFloydWasMurdered

Because there isn’t already enough to deal with amidst the global COVID-19 pandemic, in the US cops continue to kill black men with impunity.

The community quickly responded with marches and impassioned pleas for arrests of the peace officers and the ending of institutional racism.  But the mood of protest quickly got uglier when the President Donald J. Trump violated Twitter Rules for glorifying violence.

When revealed the Tweet reads:

(c) Twitter

 

As noted by the New York Times (https://www.nytimes.com/2020/05/29/technology/trump-twitter-minneapolis-george-floyd.html) this phrase appears to quote Walter E. Headley, the Miami police chief whose aggressive policies historically caused unrest in the black community.  At a news conference in December 1967, as tensions simmered in response to months of police brutality, Headley threatened violent reprisals if the situation escalated: “We haven’t had any serious problems with civil uprising and looting, because I’ve let the word filter down that when the looting starts, the shooting starts.”

In August, the following year as Richard Nixon was addressing the GOP convention across the city, a three-day riot erupted during which the Miami police using shotguns and dogs killing three people and left 18 wounded.

 

 

In 2020 the Minneapolis demonstrations and others in major US cities, have splintered when the public assemblies were met with pepper spray, teargas, batons and police armoured vehicles driven into the crowds.

Journalists and media observers also found themselves targeted victims of police abuse, rubber bullets and false arrest, arguably a by-product of the multi-year ‘fake news’ and ‘enemy of the people’ MAGA campaign.

In the ensuing chaos when opportunistic looting, graffiti, damage to various buildings or the burning of vehicles inevitably occurred, these incidents were met with an increasingly aggressive police and state troopers in riot gear: helmets, face masks, body armour, arm & knee pads etc. (No shortage of PPE for riot police unlike front line health workers battling Coronavirus.) 

It is noticeable that where protesters have been met with SWAT, American cities have burned, but where there was dialogue between the communities and officials there is more typically a calm.  And despite the counter-reaction by some police forces, peaceful protests continue to spread across America, with solidarity demonstrations also taking place in many international cities.

However, rather then statesmanlike appeals for calm from the US leadership, instead we have found wise counsel from Killer Mike (https://twitter.com/KillerMike): https://www.youtube.com/watch?v=Vy9io6VEt58, with agitprop reportage from numerous citizen-journalists as well as Don Winslow (https://twitter.com/donwinslow) and John Cusack (https://twitter.com/johncusack).

Amerika in 2020, is like some weird feverish alt-reality that is ‘The Watchmen’, TV Series II (not yet broadcast), except real-life is stranger.

 

Postscript:

Words fail ….

 

31.05.20

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Clear and Present Danger

Coronavirus poses an existential threat to the established economic model of the live entertainment industry

The economic and cultural carnage of the Coronavirus pandemic with concert and festival cancellations, venue shutdowns, furloughs at Artist agencies, Promoters / Producers, and event postponements until who-knows-when, marks a period of fundamental retrenchment for the live entertainment industry as currently configured.

The suspension of events and entertainments in the presence of an audience is not due to a change in the fundamental desire for a communal shared experience of cultural performance, rather it is because of the global health security and social welfare restrictions over safe public assembly and travel.

However, the lockdown has starkly revealed the fragile fiscal underpinning of the current economic model of the live entertainment industry (Artist > Promoter > Venue > Sponsor > Ticketing > Consumer) with its fundamental reliance upon the end-consumer to advance-fund the sector’s operations.

 

As previously noted (https://tjchambers.com/2020/04/03/refunds-cashflow-live-entertainment-ma/) the live industry has responded to the enforced shutdown and the cessation of its consumer-fuelled cashflow with the wholesale suspension of operations and layoffs to save on expenses, and for those larger scale corporations able to borrow, the taking on of new debt-financing: 

Live Nation Announces Credit Agreement Amendment, Additional Revolving Credit Facility And Cost Reduction Program: https://www.prnewswire.com/news-releases/live-nation-announces-credit-agreement-amendment-additional-revolving-credit-facility-and-cost-reduction-program-301039214.html

Endeavor Sets $260 Million Loan Amid Coronavirus Revenue Crisis: https://variety.com/2020/biz/news/endeavor-260-million-loan-ufc-wme-coronavirus-1234603358/

Eventbrite Announces Financing with Francisco Partners: https://www.businesswire.com/news/home/20200511005832/en/

Live Nation Entertainment Announces Pricing And Upsize Of Private Senior Secured Notes Offering: https://www.prnewswire.com/news-releases/live-nation-entertainment-announces-pricing-and-upsize-of-private-senior-secured-notes-offering-301058991.html

 

The key disadvantage of this form of financing i.e. borrowing against future earnings is that businesses are obligated to pay back, on a regular schedule, the principal borrowed with interest – in the case of the Live Nation 13th May offering which closed 20th May, $1.2Bn at 6.5% annual interest. 

Normally companies would consider this type of financing when targeting growth or expansion opportunities (utilising the increased revenues, cost-savings and synergies of the acquisition to pay back the debt), so organisations already suffering from cash flow problems may have a more difficult time repaying the interest let alone the principal.

A company typically raises capital via the sale of equity (with dividend payments to the shareholders) and/or via the acquisition of debt (with interest payments to the creditors), with the sum of equity and debt financing referred to as the cost of capital.

In normal times a company would decide upon which new projects and operations where the return on investment generated a greater amount than the cost of capital deployed.  If returns on its capital expenditure are below its cost of capital, then the firm is not generating positive earnings for its investors.  In this case, the company may need to re-evaluate and re-balance its capital structure.

In the current circumstances with the urgent short-term need for increased financing – to assist in the refunding of cancelled events, maintenance of a reduced level of corporate management and operations, and the effective rescheduling of postponed events – has led to some negative market sentiment with several live entertainment stocks now being downgraded: 

Disney downgraded in a grim appraisal of its coronavirus pain and future prospects: https://www.fastcompany.com/90500601/disney-downgraded-in-a-grim-appraisal-of-its-coronavirus-pain-and-future-prospects

Creative Artists Agency’s Debt Gets Downgraded: https://www.forbes.com/sites/mikeozanian/2020/05/04/creative-artists-agency-debt-gets-downgraded/

Endeavor’s Credit Rating Gets Downgraded on Live Events Exposure: https://www.hollywoodreporter.com/news/endeavors-credit-rating-gets-downgraded-live-events-exposure-1290092

Live Nation Gets Credit Rating Downgrade at S&P Globalhttps://www.hollywoodreporter.com/news/live-nation-gets-credit-rating-downgrade-at-s-p-global-1294438

 

Disclaimer:

Nothing published within this post constitutes a professional investment recommendation in any way whatsoever, nor should any content presented, or opinion expressed be relied upon for any investment activities.  Readers are strongly urged to seek their own independent investment advice and/or speak with a qualified investment professional before taking any investment decision. 

© If-I-was-that-clever-I’d-have-a-proper-job.

***

 

 

‘Corona-Ticketing’

As the COVID-19 pandemic stretches into an extended period of no new events, with a massively restricted level of new entertainment media or associated leisure service revenues, e.g. advertising, sponsorship or ticketing, the pressure on highly leveraged event promotion companies, some now carrying billions in debt, will increase.

Aside from the freezing of executive pay, expenses and bonuses, ever-larger furloughs and layoffs, or the acquisition of yet more expensive debt, the immediate response of the live entertainment sector and their associated ticketing service platforms has been to utilise ‘Postponement-As-A-Strategy’.

Because the advance ticket revenues collected by the retail agencies and box offices have typically been transferred (as per their contractual commitments) to the inventory suppliers –  many of whom have already spent the money on Artist deposits, production service retainers, venue hire, event marketing & advertising, and day-to-day business operational expenses – there may be little cash to refund to consumers.

 

Some organisations and their finance departments had calculated risk and exposure from advancing funds on a regular basis within the structure of an overall ticketing services agreement with associated promissory notes, formal Reps & Warranties, or inclusion within Event Cancellation Insurance policies, all formulated on a basic understanding of ‘containment’ as part of a fiscal ‘Domino Theory’

But no-one had modelled for the immediate and complete cessation of all events, full stop.

Which is why many consumers now cannot get a refund for tickets purchased months ago for an event originally scheduled for this summer, but now postponed until 2021.

Or are requested to donate part, or all, of their ticket refund to the apparently deserving but struggling arts organisation or venue neatly ignoring the disappointed and cash-restricted consumers, a growing number of whom are unemployed (22 million Americans have filed for unemployment benefits in the last four weeks – https://edition.cnn.com/2020/04/16/economy/unemployment-benefits-coronavirus/index.html), and many of whom want their money back. Please.

 

In the last few days the growing consumer frustration over refunds for postponed events spilled out in two letters published by Billboard magazine – Reps. Pascrell and Porter: Ticketmaster Needs to Do More to Refund Fans – https://www.billboard.com/articles/business/9376746/pascrell-porter-letter-ticketmaster-refunds with the immediate counterpoint industry response – Ticketmaster President: Reps. Pascrell & Porter Are Wrong, Company Has Processed More Than $600M in Refunds – https://www.billboard.com/articles/business/touring/9377374/ticketmaster-response-reps-pascrell-porter-refunds-letter.

Ticketmaster also posted the following graphic which claims to show that they were already providing the best customer service when compared to other U.S. sites, and stressed that more tickets would be refunded as soon as the clients returned their previously advanced monies.

© Ticketmaster

 

In the UK the Competition and Markets Authority has launched a Taskforce (https://www.gov.uk/government/publications/covid-19-cma-taskforce) to scrutinise market developments, identify harmful sales and pricing practices as they emerge and take enforcement action if there is evidence firms may have breached competition or consumer protection law. The TicketingBusiness news site noted that 4-out-of-5 COVID-19 complaints related to cancellation and refund issues, albeit not just within live entertainment: UK watchdog sees 4 out 5 COVID-19-related complaints from cancellation and refund issues – https://www.theticketingbusiness.com/2020/04/30/uk-watchdog-sees-4-5-covid-19-related-complaints-cancellation-refund-issues/.

Additionally, there has also been a growing number of media reports relating to the practise by some retail ticket agencies, in particular Eventim, SeeTickets and ATGTickets, that where refunds are offered companies retain part or all of the ticket processing fees with the argument that those services have previously been provided and as an agent for the event Promoter / Producer they are entitled to claim back those expenses. (World’s second largest ticket seller Eventim holding back millions in refunds from canceled events during coronavirus crisis – https://www.marketwatch.com/story/worlds-second-largest-ticket-seller-eventim-holding-back-millions-in-refunds-from-canceled-events-during-coronavirus-crisis-2020-05-08 + See Tickets – event cancelled but not entitled to full refund – https://forums.moneysavingexpert.com/discussion/2567989/see-tickets-event-cancelled-but-not-entitled-to-full-refund + Refund scandal could tarnish the reputation of the theatre industry – https://www.artsprofessional.co.uk/news/refund-scandal-could-tarnish-reputation-theatre-industry).

Again, this partial-refund is a customer service not universally endorsed by ticket buyers.

***

 

 

Ctrl + Alt + Del: ‘Live’ is dead, long live ‘Live’

As previously discussed (https://tjchambers.com/2020/05/01/what-future-is-there-for-concerts-festivals-and-events/),  for live entertainment to return, subject to local and national government regulations and timetable guidance, the live entertainment industry has to calculate operationally and logistically how it will reopen, assuming no vaccine is readily available: with the potential maintenance of some form of social-distancing; identity verification and personal temperature checks at event entrance; proof of immunity and/or on-site antibody testing; contactless-everything once admitted; and with organised queues to fill (at the bar) and then to empty (at the toilets).

 

Given that the initial return to live is likely to be piecemeal, downsized or small-scale, Artists may have to be convinced that they are ready and able to travel to the event, utilise whatever back stage facilities, dressing room, House PA, Lights and Backline is available, and then perform on whatever stage is accessible, all whilst maintaining a social-distance.

 

While this will not be too much of a culture shock for some, there is also considerable industry chatter (Producers overhaul contracts to minimise future lockdown losses – https://www.thestage.co.uk/news/news/coronavirus-producers-overhaul-contracts-to-minimise-future-lockdown-losses + Artist contracts renegotiated as Covid-19 reality bites – https://www.iq-mag.net/2020/05/offers-revised-down-post-covid-19-negotations-begin/) that some Promoter / Producers are already re-negotiating Artist fees with an expectation of shared risk, no guarantees and downward pressure on show settlements to reflect smaller (initial) audiences and increased risk and costs.

So, Artists willing and able to tour should expect smaller venues and reduced fees, with shorter Onsale periods for ticket sales, albeit with potentially increased focus on upgrade bundling (in an effort to maximise event ROI) and lots of communication in advance and onsite about health, hygiene and safety.

 

 

Assuming regulatory approval, the technical means to re-open, and a successful (re)negotiation with the talent, then the live industries have to convince its audiences that it is safe to re-engage with some form of mass marketing campaign (ATG announces “The Shows Will Go On” campaign across the UK – https://www.whatsonstage.com/london-theatre/news/atg-stage-close-advertising-show-go-on_51204.html) aside from event specific messaging and onsite signage, to reinforce the safety-first aspects of the live experience.

 

Additionally, it also will also have to convince consumers to purchase tickets once-again in advance for events scheduled (not guaranteed) for the near-future, thus providing the live industry with the return of some form of positive cashflow.

 

The industry will also collectively have to consider what constitutes the live experience going forward.  Does this period of shutdown enable new formats (and thus new stakeholders) incorporating live streaming and/or video-on-demand to develop a meaningful and monetizable audience?

Or as a temporary workaround will audiences relocate to the nearest drive-in: Is the future of live music a drive-in concert? – https://www.latimes.com/entertainment-arts/music/story/2020-05-01/drive-in-concerts-denmark-coronavirus + Drive-in concerts: A new normal for live? – https://www.iq-mag.net/2020/05/drive-in-concerts-a-new-normal-for-live/ + The world’s first drive-in raves are being held in Germany – https://mixmag.net/read/worlds-first-drive-in-rave-germany-news + ‘Save the summer’: event organisers working on drive-in summer festivals – https://www.brusselstimes.com/all-news/business/109739/save-the-summer-event-organisers-working-on-drive-in-summer-festivals/.

Alternatively, will the long-trumpeted arrival of AR / VR finally deliver a viable means to enable international artists (both the living and the glorious but previously departed) to ‘appear’ at local nightclubs and stages, or will the technical requirements for sophisticated A-V projected holograms and/or personal headsets reduce market penetration to domestic environments?

 

Arguably, it is with the livestreaming of events that offers the greatest potential disruptive fracture of the live industry as currently organised and how it might operate going forward.

***

 

 

You just can’t disrupt the live experience… or can you?

 

Attending live performances has never just been about seeing the artist play some songs, the actor recite some lines, or the sports star excel in their athleticism, but for the audience, fans and supporters, it’s also all the other value-add experiences that surround and encompass the event: the anticipation during the ticket purchase and then the journey to the venue; who you’re with; how close you are to the spectacle; the sweat-on-the-brow of the artist; the emotion of the audience; the stumble on stage, or pitch, and their recovery; the noise and the hush; the feeling that the single moment will last forever; and the sense of being part of something more.  A collective, a tribe, inclusive and important, joyful, serious and life affirming.

But the technical ‘remoteness’ from the spectacle of the performance hasn’t hurt for example the adoption of eSports and gaming whom attract mass audiences both online and in-person for (virtual) events. 

 

Arguably, just as streaming has replaced physical product as the main music revenue source (with 56% of recorded music revenues in 2019), the opportunity for live streaming to replace (in part) the live event will be powered by new operators, emerging technologies and alternate sources of capital for whom the ‘live experience’ may be only part of their audience-acquisition/audience-retention business development strategies.

Given the economic frailty of many of the leading live entertainment organisations, both large and small, saddled with debt and no recurring revenues, the sector may itself be ripe for reimagination and/or disruption from those with access to capital and for whom content merely aids market differentiation for their product range, with less concern over the marginal revenues related to event promotion.

‘Silicon Valley’ tech-giants and their Venture Capital / Private Equity funders prefer to move in on pre-existing sectors that support a hierarchical employment structure, with ‘archaic’ or restrictive practises and antiquated technologies, and offer an alternative, an ‘MVP’ initially seemingly inferior to the established product, but one that makes the consumer believe that the ‘service’ can be provided cheaper and in seemingly a more personally-bespoke manner (at a time, price and distribution channel apparently designed to first suit the consumer), and typically moving towards a ‘free’ price-point modifying historical patterns of supplier-user behaviour, in exchange for consumer data, and future revenue realignment.

No-one within the VC community will need convincing that the current live industry model is broken – no cashflow, huge debts, no suitable technology, endless unusable real estate requiring uneconomic social-distancing and hygienic retrofitting, and crucially doesn’t own any I.P. – and so for the next six-to-twelve months or more livestreaming, linear TV and webcasts offer a unique disruptive opportunity to re-invent the production of events and connection to an audience.

 

Until the lockdown the generally accepted economic reality was that the primary source of income for artists was via touring.  But for the organisations centred around the promotion of concerts, theatrical shows or sports their business model had almost nothing to do with making money from the promotion of the event – as the artist / attraction / star typically retained the overwhelming majority of event-related ticketing receipts.  Rather event promoters are more focussed on the incremental revenue opportunities derived from advertising, sponsorships, and various commissions related to F&B sales, car parking, merchandise, bundles & packages, and retrospective period-based discounts on production services and hall-rental etc.

Historically event promoters had overcome their capital-poor inadequacies or operational inefficiencies, by taking advantage of the advance ticket retail model of the consumer funding the sector, aided and abetted by the willingness of ticket agencies and box offices to forward revenues that should have been held in escrow on behalf of the consumer until event maturity.

The COVID-19 global shock to the live industry has fundamentally blown apart this business model and it now finds itself with ongoing infrastructure and real estate costs (venues, offices, equipment, and staff – not just the mega-million compensation packages of CEO’s but also the army of self-employed, freelancers, and zero-hours support workers).  It is also unable to claim back costs via insurance (an industry represented by bigger & uglier lawyers than even the live industry can afford), or to recoup advances previously made to the talent, it also has to renegotiate contracts with various landlords and suppliers whilst scoping out new health and hygiene services.  And all the while has massive consumer-side refund liabilities (morally if not legally). 

All of which opens the live industry to potential disruption.

***

 

 

Is It Live, Or Is it Memorex? (https://en.wikipedia.org/wiki/Memorex)

With thousands of concerts, festivals and tours cancelled or postponed due to the COVID-19 pandemic, the various social networks and streaming platforms have become the go-to resource and distribution networks for Artists and Rights Owners to continue to perform for their fans, patrons and supporters.

When Michael Rapino announced in the Live Nation Q1 Results statement (7th May) (https://www.prnewswire.com/news-releases/live-nation-entertainment-reports-first-quarter-2020-results-301055191.html) that the company was ‘well positioned to lead (the) live industry’, he also noted that ‘almost a million fans have come to our ‘Live From Home’ site to find virtual tours and acoustic performances from home.’

Without forensically analysing each and every stream (so apologies for the following generalisation) but other than providing an initial discovery and aggregation service for the various livestreams, the virtual destinations for these online performances were typically not venues owned or contracted to the promoter or the ticketing arm, nor was the live streaming technology an in-house solution, and many of the performers appealed directly to the viewer to donate to them, or fundraise for other worthy causes.

So, there was little direct gain for Live Nation, other than generating goodwill with its ongoing support for the Artists.

However, others were already busy.

 

Facebook announced plans (24th April) (Introducing Messenger Rooms https://about.fb.com/news/2020/04/introducing-messenger-rooms/) to allow users (creators and small businesses) to charge for livestreams, recognising the growing ‘demand for real-time video’.

Facebook further stated that it would enable ‘more ways to connect when you’re apart’ whilst providing a way for musicians and other creators to monetize their events on the platform ‘anything from online performances to classes to professional conferences’ (Facebook announces paid-for livestreams, more tips – https://www.iq-mag.net/2020/04/facebook-announces-paidfor-livestreamed-shows/.

Spotify had also announced its own virtual tipping facility (Artist Fundraising Pick – https://artists.spotify.com/blog/introducing-artist-fundraising-pick), which enabled streaming listeners to donate via the Spotify artist’ profiles using PayPal, GoFundMe or Cash App (incurring a backlash from some for serial underpayment to Artists by the platform): ‘With this feature, we simply hope to enable those who have the interest and means to support artists in this time of great need, and to create another opportunity for our Covid-19 music relief partners to find the financial support they need to continue working in music and lift our industry.’

Then on 19th May Facebook announced the development of ‘Facebook Shops’ (Mark Zuckerberg announces Facebook Shops, making it easier for businesses to list products for sale – https://www.cnbc.com/2020/05/19/zuckerberg-announces-facebook-shops-e-commerce-for-businesses.html ) a free service to enable businesses set up product listings on their Facebook page and Instagram profile.  In the future, it would also allow businesses to sell products to customers through the chat features of WhatsApp, Messenger and Instagram Direct.

Amazon-owned Twitch has also reported huge upturns in interest in livestreaming over recent weeks, with MD Mike Olson stating Twitch is helping thousands of independent artists get paid in a time when they are unable to perform live’, adding ‘we have a number of scaled monetisation tools for artists, including paid subscriptions’ (How livestreaming is taking its chance to shine – https://www.musicweek.com/digital/read/how-livestreaming-is-taking-its-chance-to-shine/079549).

Dan Chalmers MD YouTube Music EMEA, stated that ‘these types of virtual events and the responses we’ve seen will be here to stay. The numbers of some of the livestreams have been significant. It far outweighs any of the physical audiences in the clubs, plus you’re playing immediately to a global audience. It’s really exciting, for the talent and ourselves.’ (YouTube Music Europe director Dan Chalmers on the rise of livestreams – https://www.musicweek.com/digital/read/youtube-music-europe-director-dan-chalmers-on-the-rise-of-livestreams/079840).

Collaboration between Artists, technology platforms and media organizations has exploded since the pandemic, and it has quickly became apparent that livestreaming ‘virtually’ enables audience contact, engagement and retention whilst also providing the opportunity to fiscally support Artists, or Venue(s), for example MVT launched a #SaveOurVenues campaign (http://musicvenuetrust.com/2020/04/music-venue-trust-launches-saveourvenues-campaign/) which featured ‘at home’ performances by artists livestreamed in support of particular venues important to their careers.

Livestreaming has also supported those impacted by the Coronavirus, connect those feeling isolated and raise profile and funds for deserving charities, for example: ‘A Night Of Covenant House’ which featured Jon Bon Jovi, Dolly Parton, Meryl Streep, Morgan Freeman & Stephen Colbert in aid of the homelessness charity Covenant House – via Amazon Prime Video, Facebook, Twitch & YouTube.

https://www.covenanthouse.org/ 

 

Initially some of the livestreams were quaintly amateurish, with musicians prone to mistakes in presenting style and content (Lockdown launches a stream of live concerts – https://www.ft.com/content/c26e8bae-7e43-11ea-82f6-150830b3b99a) and many major artists quickly became co-opted within more homogenous (and mawkish) TV standard web-casts (One World: Together at Home — Stones steal the show while Gaga keeps it low-key – https://www.ft.com/content/2ae3415c-82fe-11ea-b872-8db45d5f6714) which simultaneously aired on ABC, CBS, and NBC with an edited version then available via the BBC.

https://www.bbc.co.uk/mediacentre/proginfo/2020/16/together-at-home

It should however be noted that OneWorld raised approx. $127M for Coronavirus relief – so let’s not be too sniffy (One World: Together at Home concert raises $127m for coronavirus relief – https://www.theguardian.com/music/2020/apr/20/one-world-together-at-home-concert-lady-gaga-raises-127m-coronavirus-relief).

 

Amongst the many, many other livestreamed offerings, the Royal Opera House announced #OurHousetoYourHouse (https://www.roh.org.uk/streaming) a free programme of curated online broadcasts via Facebook and YouTube

The National Theatre announced a weekly series of free past-performances (https://www.nationaltheatre.org.uk/nt-at-home) via YouTube

Radiohead announced their intention to stream concert films during the quarantine (https://consequenceofsound.net/2020/04/radiohead-concert-films-youtube/) again via YouTube: https://www.youtube.com/user/radiohead.

Also as part of YouTube’s #StayHome #WithMe campaign, a two-part online series featuring all 41 songs from Eurovision 2020 artists, premiered exclusively on the Eurovision Song Contest’s YouTube Channel: https://www.youtube.com/user/eurovision.

And Orchestral Manoeuvres In The Dark released ‘Live From Your Sofa’ an ‘online visual performance featuring never before seen footage of the whole of the band’s 2019’s Hammersmith Apollo London show’, again via YouTube: https://www.youtube.com/watch?v=Or02GYRDmCE.

http://www.omd.uk.com/news/omd-live-from-your-sofa/

 

MusicWeek reviewed the latter detailing various KPI’s revealing impressive viewership, engagement, charity donations, and virtual merchandise sales:

Last weekend saw over 30,000 OMD fans tune into YouTube to catch the airing of OMD: Live From Your Sofa, featuring an hour and a half of footage recorded from the band’s headline show at Eventim Hammersmith Apollo, in November 2019.

The band also offered a pre-show meet and greet where 800 fans queued for a live chat with Andy McCluskey, a virtual merchandise desk that took in 2,000 orders, and a charity raffle which auctioned off rare signed items and test pressings, raising a total of £6,000.

OMD, together with their manager and label chose charities to donate to, with Marie Curie, Reach (Newark) and Hotels Joining Hands (Cambodia) all set to benefit from the funds raised.

The show has now been viewed over 115,000 times

***

 

A trigger for this overall post was also the (always) excellent Tim Ingham, Founder of Music Business Worldwide (https://www.musicbusinessworldwide.com/) who wrote in Rolling Stone: Why the Music Business Should Be Looking Closely at Fortnite and Epic Games – https://www.rollingstone.com/pro/features/music-business-epic-games-fortnite-991211/ .

The article highlights the huge audience for video games / music crossover with the Fortnite in-game appearance of Travis Scott, whose ‘Astronomical’ virtual concert attracted over 27.7 million attendees.

The related post by Murray Staasen (Sony is building a team ‘dedicated to reimagining music through immersive media’ – using Fortnite maker Epic Games’ Unreal Engine – https://www.musicbusinessworldwide.com/sony-is-building-a-team-dedicated-to-reimagining-music-through-immersive-media-using-fortnite-maker-epic-games-unreal-engine/) with some specific job details outlined that some people at Sony were also thinking about what comes next.

***

 

Back to the livestreams …

Virgin EMI has also staged one of the biggest label livestream events since the lockdown:

https://www.lockdownlive.uk/

The event was in support of Global Citizen and the World Health Organisation’s COVID-19 Solidarity Response Fund and lasted three days (April 3-5) featuring artists performing from across the roster.

Whilst Italian tenor Andrea Bocelli performed a solo Easter concert from an empty Duomo di Milano streamed live to millions of people around the world in coronavirus lockdown.  (Update: “The Music for Hope” performance streamed via YouTube has now been watched more than 39 million times.)

https://www.youtube.com/watch?v=huTUOek4LgU

***

 

 

Other ‘Disruption’ from within

 

The Coronavirus crisis has also led to a number of independent live industry start-ups and emerging operators develop new solutions or even pivoting their pre-existing business to support artists, labels and live music campaign groups, with D-I-Y bedroom-streams, multi-screen orchestras, and slick TV-style webcasts & VOD (Video-On-Demand).

 

Bandsintown, the ‘platform where artists and fans connect’ has partnered with MusiCares to help collect donations for their COVID-19 fund for Artists, whilst also launching ‘Bandsintown Live’, their own live music channel on Twitch, showcasing live stream sets from Artists across all genres to connect with their fans.

https://news.bandsintown.com/article/2020-03-18-to-our-bandsintown-community-we-will-get-through-this-together/

 

Dice the event discovery and ticketing platform announced (17th April) the launch of a new TV function aimed at personalising livestreaming for users.  The aim is that ‘Dice TV’ will encompass concerts, festival appearances and DJ sets, ‘with fans able to buy tickets, make donations, invite and share events with other users’.

‘This is a crucial moment for the live industry to develop a sustainable ecosystem that helps creators and artists thrive’, said Co-Founder Phil Hutcheon. ‘This is just the start, we have a dedicated team on Dice TV and this will grow to be a long term solution for the industry.’ (Dice launches new TV function as focus shifts to livestreaming – https://www.musicweek.com/live/read/dice-launches-new-tv-function-as-focus-shifts-to-livestreaming/079504).

https://dice.fm/event/dr9vo-lewis-capaldi-live-and-acoustic-16th-may-stream-via-bathgate-edinburgh-tickets

 

Festicket, the travel packages and ticketing solution, announced (19th May) a new platform – in partnership with YouTube and Vimeo – to enable music fans to watch and engage with artists direct from their home.

Festicket Live will host free and also ticketed live streams, with Marketing Director Luis Sousa stating ‘The past weeks and months have seen a dramatic shift to online streaming, with over 60% of our customers saying they had watched a live stream since the lockdown began. We see this trend continuing, and possibly even remaining once physical festivals and events begin to return.’

 https://www.festicket.com/magazine/news/festicket-launches-live-streaming-platform-festicket-live/

***

 

 

In conclusion, Artists, Agents, Promoters, Venues and Ticketing Companies will all face several lean years, assuming COVID-19 survival, following the effective shutdown of the $27Bn global live music industry.

In the absence of anything else, the recent livestreaming explosion has been a boon for music discovery and promotion, but until the Coronavirus pandemic the real money remained in the live (physical) performance.

Going forward Artists and other Rights Owners may see within livestreaming a potential to replace part of that dependency.

However, to do so livestreaming is going to have to move beyond the traditional linear event performance to incorporate Q&A with the lyricist explaining the art of song-writing, band rehearsals & soundchecks, acoustic versions of works, guitar roadies explaining the various tech set-ups, backstage preparation and dressing room banter; fans surveys for favourite songs to be performed etc.  

And livestreaming can’t always remain a free exposure marketing tool, it has to be linked to virtual and eventually live event ticketing, merchandise, news, and regular interactions with fans and supporters.  Perhaps live streaming can then be aligned to a subscription model as part of a fan club or D-2-C service, extending the overall event experience into something more?

 

At a time of collective dislocation, the (recorded) music industry and others (the social networks, mobile platforms and web channels) have quickly encouraged consumers to ‘watch’ live, as opposed to ‘experience’ live – because that is the best available at this time. 

 

However, this transference also reflects the power and authority of the Rights Owners (Artists, Recorded Music & Publishing etc.) to quickly agree new monetisable relationships with the various tech distribution channels and media networks. 

 

These ‘emergency’ partnerships and new partnerships are not reliant upon the historical live entertainment business, and without assuming that live concerts and touring will never re-establish itself, the model will undoubtedly be changed going forward.

 

 

Lastly, for (much) more information about livestreaming ‘The legal underbelly of livestreaming concerts’ by Cherie Hu is an immense guide available via Water & Music / Patreon – subscribe here: https://mailchi.mp/9ab07d2b7dc4/waterandmusic and please support her work.

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Comments, please email: chambers.tj@gmail.com