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Long term effects of Coronavirus on the Music Industry

If you are a part of the music industry, you’ve most likely lost a lot of income over the next few  months. 

I know this sucks, but keep in mind that there is more at stake than a canceled tour. This is like the recession, but worse.

There is a large consolidation of industry coming. Some of you will not have jobs to return to. Large companies are starting layoffs. Paradigm announced it’s laying off over 100 people. Labels will be signing fewer acts, renewing fewer contracts and may even be shelving records. Many small venues will close their doors. Bands will be slimming down the touring crews. 

Although acquisitions will decrease overall, we will likely see independent venues selling to Live Nation/AEG and independent labels selling to Sony, Universal and Warner. 

 

The fall will be oversaturated. This will be the first time we see spring, summer and fall festivals all happening in the same season. Smaller acts and agencies will have trouble finding weekend holds, and maybe even weekday holds. Danny Wimmer Presents canceled Epicenter, Welcome to Rockville and Sonic Temple citing, “scheduling conflicts, venue availabilities and a number of other factors” as to why they couldn’t postpone instead. This is because many of these bands may already have fall tours scheduled.

Promoters – please be conservative with your offers. Try to avoid outbidding each other for pride’s sake. Agents – keep in mind you may be seeing lower offers. I know you will be anxious to catch up on lost revenue, but there will be a lot of competition and the fans will have less to spend. 

 

The independents will struggle the most. Big businesses will be able to access funding unobtainable to small businesses. They have real estate and other assets to leverage. Live Nation’s stock value will most likely bounce back. 

Gig workers have likely watched 70-100% of their income disappear overnight. Independent venues that survive the quarantine will struggle heading into the fall as smaller shows compete with a myriad of larger tours. Fewer independent acts will land opening slots on these tours as major label acts fight to preserve the numbers they have had in previous years. 

 

If independents want to survive, they need to work together. 

Promoters should be co-promoting shows if they plan to compete with larger tours and festivals. Now is the time to invest in real marketing because traditional strategies will not be enough. Keep your offers conservative – consider offering backend before offering a higher guarantee. 

Agencies – your goal should be to sell packages at market value. This is a unique challenge and responsibility. Overselling will cause independent promoters to struggle more; underselling will cause the bands to struggle. Work together across agencies, labels, etc. Now is the time to forge new relationships and broker the best deal for the artist, not just the agency. 

Venuesstop taking merch cuts. It will make your offers look more competitive, and the bands need that money more than ever. When Eventbrite inevitably suggests it, don’t raise your ticket fees. That would be taking more money from the fans without offering any additional value. It is your job to create value and embrace your customers. If you’re increasing prices at the bar, add drink specials for those attending on a budget.  

A few points that hold true with all parties..

  • Focus on cash flow – not profit.  
  • The status quo is no longer enough to survive – there is no room for dead weight.
  • Keep an eye on independent acts departing from major agencies and labels – they still hold value.

 

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