Event scheduling in the second half of 2021 in North America will be 10-times the run rate of the first half of the year, according to a new study.
The Live Events and Entertainment Insight Report for January by BWG Strategy surveyed 23 live events professionals – encompassing several of North America’s flagship arenas and event spaces, as well as ticketing firms — and found that by the second half of the year, event scheduling is expected to reach 50-60 per cent of pre-COVID expectations.
It also expects discounts on tickets to continue to thaw, dissipating by early 2022, as events return to the schedule.
In terms of ticket pricing, in the first half of 2021 almost 30 per cent of respondents said they do not plan to host events. However, of those who indicated they have concert plans early this year, 23 per cent plan to offer discounts of up to 50 per cent. This changes in the second half of 2021 and into 2022 when all respondents plan to host events.
In the back half of the year, 27 per cent plan to offer discounts, which falls to just 10 per cent in 2022. Next year’s outlook also sees more than half of respondents targeting almost full capacities, which marks a huge jump from the 14 per cent of the sector that sees the return of full capacities happening in the second half of 2021.
“Pricing and distribution strategies need to be completely rethought. The patron and fan experience in the venue will never be more important than it is now. Long-standing products and processes like season tickets, the traditional secondary market and no refund policies are all going to be rethought,” said one respondent that represents a ticket pricing software company.
The findings state that nearly 70 per cent of venues and event promoters are not profitable below 50 per cent occupancy. Based on responses, operators are not planning a return to ongoing profitable events until late 2021 at the earliest, and much more likely in 2022.
The group’s views on the vaccine are positive and this group is hopeful about a return to normalcy by midyear. President Joe Biden’s ‘100 million vaccines in 100 days’ claim was mentioned by respondents several times, and is fuelling hope for event operators.
However, the survey also found that agents and artists have suggested that they cannot begin booking shows until six-12 months after clear line of sight on herd immunity.
In addition, the sector believes that a sporting event attendance recovery will take place before a concert performance recovery, perhaps by one to two quarters.
The survey detailed the group’s thoughts on what lasting industry changes from the pandemic would be, including consolidation of failing venues, with more leverage going to large promoters. They also maintain that Live Nation and AEG are in leading positions to benefit moving forward and that the industry will quickly transform to contactless, with POS, vending machines, and digital ticket scanning to be key technology enablers.
“Live Nation and AEG have large capital reserves, and they are borrowing money to keep cash flow strong,” said an unnamed City Convention and Visitors Bureau respondent in the survey. “Once this break, I see both promoters very active in getting rescheduled shows to play and also looking to book numerous new tours. The real question is if the deals will change significantly.
“There have been stories written that they will try to renegotiate contracts with artists to make the deal much more equal. Instead of paying artists huge guarantees, they will try and work out smaller guarantees or different split points to lessen the risk to the promoters.
“I think this will work for mid-level artists, but the larger higher-paid artists will hold out for a similar deal or will not work with Live Nation or AEG. They will try and cut deals with smaller independent promoters who will pay the larger guarantee.”
It also predicts that sanitation services will ramp up and remain elevated, even with a vaccine, with organisations planning to spend more on cleaning service into the future.
In addition, it has been suggested that the primary market for tickets will become increasingly important at the expense of secondary.