Virtual concerts: A new video format

The global pandemic thrust the live music sector into chaos, with global revenues falling by 75% in 2020 compared to one year previously. The music industry was rocked by first-order impacts (no concerts, no fan engagement) and second-order impacts (many artists realising that streaming did not add up without live income alongside it). Necessity, though, is the mother of invention and an unprecedented period of innovation and experimentation followed, creating a whole new virtual concert ecosystem. One that presents great opportunity, but that also reflects the flaws of a hastily constructed industry – flaws that must be fixed for the sector to realise its ambition. Rather than the future of live, virtual concerts represent an entire new video format.

MIDiA’s new report ‘Virtual concerts: A new video format’ provides a comprehensive overview of the market with revenues, forecasts, demographics, vendor mapping and industry metrics. The report is immediately available to MIDiA clients. Here are some of the key findings. 

Live streaming of concerts is not new, but the combination of a complex rights landscape and resistance from the traditional live sector stymied the sector’s growth. The fact that technology itself was not the problem is well illustrated by the dynamic growth in live streaming in other content verticals, gaming especially. Since the pandemic’s first impact, there has been a rapid rollout of new live music streaming solutions and companies, enjoying varied success both commercially and creatively. Nonetheless, artists now have a vast array of options at their disposal and the rapid shift is well illustrated by the Foo Fighters’ Dave Grohl joking during his band’s December 2020 high quality, ticketed live streamed concert that the sector had come a long way from artists playing piano in their living rooms earlier in the year.

One of the most important changes was the strong shift in the latter part of the year from free streams to more professionally produced, ticketed events. From June to November 2020, the share of live-streamed concert listings on Bandsintown grew from 1.9% to 40.7%, while the total ticketed revenue in December was up 292% from June. The shift to paid is crucial, especially considering the #brokenrecord debate (arguably the most important second-order impact of the cessation of live music). Traditional live is a scarce, premium product that generates many artists the bulk of their income. Yet the start of the live streaming boom was all about free, an uncanny rerun of when music first went on the internet. With the current wave of COVID-19 worse in many countries than the first, 2021 is set to be another highly disrupted year for the live sector. It is crucial that live streaming can pick up some of the slack as a meaningful revenue driver for artists.

Overall, ticketed live-streamed concerts generated $0.6 billion in 2020 with a flurry of ticketed events in the last two months of the year, including end-of-year spectaculars from heavyweights as diverse as Justin Bieber and Kiss.

Live streaming though has a long way to go, illustrated by the fact that penetration is just 9% and audiences have an early adopter, younger male skew. In many respects live streaming was not ready for primetime when COVID-19 hit. Unlike sectors such as video conferencing and home fitness tech, which had become well established before, music live streaming was a bit of an industry backwater. A whole host of new entrants swept in to tap the new opportunity, while pre-existing ones that had been limping along pre-COVID, gave themselves a new lick of paint.

The vendor landscape is complex and increasingly fragmented. But most importantly, it is characterised by companies wanting to own as much of the value chain as possible and trying to achieve as much as they can before the giants of the traditional live sector get back on their feet.

Live streaming has vast potential – not in some binary live music replacement equation, but instead as a new video format. In fact, live streaming could be to live music what pay-TV is to sports, creating in the long run a market that is even bigger than the core business. But between now and then there is a lot of hard work to be done.

Why Rishi Sunak is both wrong and right

Earlier this week the UK Chancellor of the Exchequer Rishi Sunak suggested that creatives such as musicians who had seen income dry up during COVID-19 should consider retraining for the new ‘opportunities’ the lockdown economy is generating. 

The principle makes sense from an economic perspective, but it is just that – an economist’s solution to a cultural problem. A guitarist becoming an Amazon van driver or a Just Eat courier will certainly have the desired economic output (i.e. more economic productivity), but the cultural damage is potentially irreparable. Perhaps more importantly, however, it is throwing in the towel after the first round of the fight. 

A quick lesson from history

Culture is one of the most important outputs of society and the more developed a society is, the more it normally invests in that culture. A brief overview of history illustrates the point. The Roman Empire, one of the first great civilisations, was focused on warfare and expansion. It spawned some famous philosophers and orators, as well as great art (sculpture and mosaics especially). Yet warfare was the defining trait of the empire, and so the majority of the great figures we remember are the military generals and emperors. Fast forward to the Middle Ages in the same Italian peninsula and we had the Renaissance, ironically rediscovering the lost art techniques of the ancients. Although Italy in this period was dominated by warfare, and although there are no shortage of generals and petty princes to fill the history books, it is the art and culture that the period is best known for. Artists like Leonardo da Vinci, Michelangelo and Raphael are the great names of this era. There was no structured art marketplace, however; instead, rich benefactors (bankers, princes, generals) patronised them, subsidising their art. They did so often in the hope of immortalising their own names, but instead immortalised the artists. Art does not always pay for itself. Sometimes it needs a helping hand.

Small venues create national economic output; virtual ones may not

Now to be clear, I am not advocating that music should become state subsidised. Nor am I comparing the musical output of a bedroom musician with that of a renaissance master (though Kanye does think that he is ‘unquestionably’ an even better artist than even those Italian greats). The lesson to learn from history here is that in tough times, society benefits from supporting culture. If small music venues continue to fall like flies,smaller and emerging artists will be bereft of real-world places to perform and to build audiences. The music market will stagnate with new talent having one more hurdle to success put in its way. Live streaming will pick up some of the slack and may even become a valuable alternative for many artists. For the UK government, however, that will mean swapping the economic output of UK venues for that of predominately American technology platforms. That economic output will leave the UK economy – and at a time of trade uncertainty leading up to Brexit, to lose music, arguably the UK’s most culturally renowned global export over the last century, would be a weighty hit.

Artists need to experiment and innovate now more than ever before

This is bigger than national economic protectionism, and it is certainly bigger than the UK. To use that horrible management consultant phrase: change is difficult. We are cursed and blessed to live in interesting times. Technology has changed the recorded music business beyond recognition; now, because of the pandemic, technology is going to accelerate change in the live business as well. This process may be difficult, and it may be long, but it will result in a differently shaped music business in the mid-term future. Artists have an opportunity, even a responsibility, to innovate and experiment. Before COVID-19, live, merch, recording and publishing were – in varying degrees – the majority of the revenue mix for most artists. Live is unlikely to return to anything resembling normality until 2022. From this moment on, then, artists need to experiment with new models, new ways to engage with audiences and to generate income – whether that be writing for other artists on Soundbetter, making sound packs on Splice or Landr or selling digital collectibles via Fanaply. Artist income is more varied and sophisticated now than it was 10 years ago. The reality is that this trend is going to accentuate both in the lockdown economy and post-pandemic. 

However, new models take time to become viable. In this interim stage, if there is a role for state support, it is to provide artists and songwriters with the financial support and technical and business training to enable them to be winners in this new creative paradigm. Rishi Sunak was wrong to suggest that artists should retrain out of music. But he was right that they should retrain. They should retrain from being artists of the 2010s to artists of the 2020s, and that is where he should be providing support.