LIVE MUSIC INDUSTRY STANDS TO LOSE BILLIONS DUE TO COVID-19
Reeling under a near-complete lockdown, the Live Music Events Industry stands to lose billions in revenue due to the COVID-19 pandemic, according to industry experts and financial analysts.
The entire music industry is faced with a hitherto unimagined scenario right now and the live music events industry’s financial future, in particular, hangs in jeopardy. Most musicians work either freelance or on per performance-based remuneration. But musicians and tour crew members are not the only ones staring at a bleak future, the overall live music industry is floundering in the same boat. The global shutdown of the industry is expected to result in losses that are difficult to predict at this time, as no one is sure when the industry will resume work. As of mid-March, 90% of event organizers saw many of their confirmed events canceled.
“The losses for the sector that EEMA monitors in the event industry were pegged at 3000 crore for the 1st quarter. But now it’s likely that the 2nd quarter will be a washout. Worldwide all major music events have been pushed to 2021. Each business is on its own and solving their own problems. In the current scenario it is a wait and watch game,” explained Deepak Pawar, Secretary EEMA.
The entire live music industry has come to a screeching halt in a matter of weeks, with the result everyone is struggling to adapt and cope with the dramatically altered situation. While many companies have started exploring the digital space, it just may not be the medium that can help them recover their losses anytime soon.
“At Percept we sensed a massive opportunity to scale up and offer events in the digital space. While our on-ground MICE, Activations, Experiential and Live Music Events will take a hit in the next quarter, until Government clearances are received and clients attain confidence in embarking with on-ground events, we have used this time to roll out events in the digital domain,” stressed Karan Singh, COO Percept Live.
Live music industry faces unprecedented losses
The revenues earned through live music events run into thousands of crores every year. These losses will affect every single person involved. Artists in the live music industry are placed under different categories and the categorization of artists is not related to seniority or credibility. An event’s production cost is loosely summed up to be 2-3 times the money paid to the performers on an average.
According to Tarsame Mittal, Founder, TM Talent Management, the live music industry has around 100 artists, who fall under the A category collectively earn around INR 1000 crore yearly. The second category has around 250 artists who earn INR 2 crore a year on an average, making around INR 500 crore yearly. Then there are about 1000 artists who earn less than a crore per year, 50 lakhs on an average.
“The income for artists through live events is 2000 crores to 5000 crores per year approx. The live industry would suffer 3 times the losses compared to the earnings of the artists. From September to March is when 70% of the business is conducted, the rest is during the remaining months. Currently the losses are at 100% as we are in a lockdown. Overall the entire event industry will face a loss of 30000 to 40000 Crores a year a year,” opined Tarsame.
Virtual space offers potential
Going virtual now is probably the safest strategy as it keeps business going and is not dependent on social distancing. This is a new frontier for all concerned but in the near future, a blend of Live Events and Digital Events will co-exist. Digital events are already generating revenue, great content, and global connections. Virtual events have great potential, but in order to succeed in this space, we have to change our mindset and skillsets.
“The new ‘normal business/life’ post lockdown will never be the same again. So let’s break it up into two parts. What happens during lockdown and the developments post it?” asserted Roshan Abbas, Managing Director, Geometry Encompass.
“During the lockdown it is not that people are not making money. There are artists who are recording, supervising or composing music from their home. This does not hold true for the live music market. In India the live music market’s peak season time is post September to January. So why are people panicking now when this period is most slack during the year. Instead of panicking why don’t they prepare for the upcoming season by building new content?”
Innovation is the key
The COVID-19 pandemic has forced us to leapfrog into the digital age. India was already dipping its toes in the pool but now has to dive in. There are various reasons why Digital platforms will be around for the long haul, being environmentally friendly, with no venue or audience size constraints, lower overhead costs and risks, the available technology and marketing tools to scale up visibility, and offering enhanced Return on Investment (ROI) and Return on Experience (ROX) for brands investing in this space.
But for artists to find their niche, innovation will the key. For instance, when popular video game company Epic Games hosted DJ Marshmellow inside their Fortnite game, 10.7 million viewers watched the concert. The medium is open for all and so is the first-movers advantage. Viewers will surely get selective about the content as time passes and to be viable artists will have to be on their toes, producing innovative and engaging content.
If an artist is looking to be relevant during the lockdown, online collaborations are a great way to build an audience through the digital medium and many artists are doing just that. Learning to use technology to your advantage would go a long way in improving an artist’s prospects. An artist can seek out a technologist to build an online concert. The technologist will play the role of a show director now. Soon an artist will have to hire a digital manager who knows the nuances of exploring the internet to gain the best possible traction for the artist.
Engaging with Brands
The biggest challenge post adjusting to the digital platforms would be engaging the brands. The Indian live music industry is advertising revenue driven as ticket sales are negligible. Brands will always need to engage with their customers and this is a great time for the Industry to identify gap areas and customize innovative and creative online solutions for clients to drive brand-customer engagements.
Karan drew up three principles that will remain paramount when handling brands now:
Going ahead, it is difficult to predict until when this uncertainty and fear will persist. Some things are for certain, the industry will reopen sooner or later, brands will be looking to engage with their audience and most of them would be already impatient for live music. But how and when all this will pan out is what remains to be seen.
“Whenever we open up, the events will be more purpose driven. This is the common thought across the Industry today. This will also be the diktat given by the brands who invest in events. The brands will look to invest in societal campaigns and events as it is the need of the hour. There are some Dos and Don’ts, and SOPs that we are sharing with the government and other related organisations regarding the conducting of events in the near future,” asserted Deepak.
Expressing his perception of the future, Roshan said,
“Once things open up there will be a bloodbath as every artist would be willing to perform no matter the monetary costs. It will be a buyers’ market. Artists who will be successful in building their online image will create a niche and hold on to their price.”
What really will happen when the box office opens? Will there be a beeline for tickets or will people still be apprehensive? When will the artists reeling due to COVID-19 be back on stage with a smile or will they be forced to pick up cheques of lesser value? Will the entire dynamics of the Live Entertainment Industry be changed forever or just the short term? What about the live events support industry like light and sound? The answers to these questions will no doubt unfold in the coming future. Whatever the fallout of this disastrous pandemic there’s bound to changes, even some that are permanent, we will have to wait and see, but the Industry will adapt and definitely bounce back in the long term.