Tim Chambers, a mentor, advisor and consultant within the international ticketing and live entertainment sectors, assesses the current state of the market and argues that post-pandemic, not every event can sell-out...
Despite bullish quarterly statements from various international congloms, the post-pandemic recovery of the live music industry has been a varied experience for individual artists, attractions, and promoter/producers all eager to re-establish their businesses, and for international territories as the various health protocols and regulatory restrictions governing events relaxed.
In the UK, PRS for Music reported that in 2022 there was a ‘rebound’ in live music activities, with over 128,000 events generating £62.7M an increase of 683% when compared to 2021 and 16.1% (£8.7M) from 2019.
However, the calculation of the PRS royalty is based upon a proportion of the stated ticket face value which is an increasingly abstract notion as it potentially excludes service fees, ticket bundles & packages and how to identify, or report, primary market dynamically-priced inventory?
Nevertheless, the enforced congestion of COVID-19 rescheduled events, alongside the relaunch of the sector drove the overall volume of events in 2022, which when coupled with live entertainment ticketing cost-push inflation (the live entertainment sector is one where ticket prices has outstripped core economy inflation over the last 20 years), led to an apparent overall growth for the industry when compared to 2019.
Whilst the publicly available PRS data doesn’t reveal which specific sectors grew, or which experienced difficulties, a trend first noted by Will Page revealed that the major growth in the UK over the last decade has occurred at the larger-scale stadiums, festivals and arenas.
In the UK and elsewhere during 2022-23 there has been a number of high-profile tours and festivals featuring tier#1 artists (Arctic Monkeys, Beyonçe, Blur, Bruce Springsteen, Depeche Mode, Guns N’Roses, Harry Styles, Muse, Red Hot Chilli Peppers etc.) that have gleefully announced their return to audiences, who are apparently willing and able to buy a volume of inflation-busting tickets – for example Glastonbury increased its 2023 ticket price from £265 per person to £335.
Audiences excited to re-immerse within the larger-scale live experience have therefore re-adopted credit card usage (with the trillions saved by consumers during the pandemic having been spent down rapidly in the last year and then re-engaged with debt purchasing amidst a consumption boom partially accelerated by ongoing inflation) or taken up layaway instalment payment schemes.
But for others within the sector operating outside of the top tier, the successful relaunch of live music has proved to be more elusive.
The grassroots venues and emerging artists sector, where budgets have always been tight, have struggled with the cost-of-living crisis, runaway energy prices, and reattracting those skilled support staff and event service providers who left the industry during the Covid hiatus.
There has also been an additional pressure of diary availability, ranging from simply just not enough weekend nights to the inability of production service suppliers to meet the post-pandemic demands, or the ability to deliver events at previously-set (2019) budgets with surging production costs – including 2022-23 logistics, transportation, and motor fuel prices.
Similarly, the mid-market touring sector of tier#2 artists or heritage acts not fuelled by viral social media videos, appearing at secondary metropolitan arenas and theatres have found audiences more squeezed by the competition for disposable consumer income from those major international touring artists and franchised festivals, with the previously mentioned cost-of-living crisis and more recently the surge in mortgage payments, forcing a cut-back in ‘non-essential’ consumer expenditure.
These COVID-related and post-pandemic pressures were brutally detailed by the AIF (Association of Independent Festivals) who announced (June 16, 2023) the results of a study which revealed that ‘there were 600 music festivals held in the UK in 2019, but only 482 will take place in 2023.’ They further noted that ‘the 19.7% decline includes festivals that disappeared during the pandemic … tried to return in 2022 but either failed … or took place but have not made it through to 2023.’
This partial, fragmentary return of consumers to all sectors of the live music industry is mirrored in other entertainment genres.
For example, SOLT (Society of London Theatre) reports that in 2022 because of rising costs, the average West End ticket price rose by £2.21 since 2019, but after adjusting for inflation the average ticket price actually fell from £52.17 to £48.11.
However, because of the post-pandemic reopening of venues previously closed for restoration and refurbishment in 2019, as well as fewer ‘dark’ weeks in 2022 this contributed to a 7.9% increase in total capacity with the number of overall individual performances also increasing by 4.7%. A combination of these factors contributed to a total 7.1% increase in theatre attendance in 2022 from 2019 – in part driven by the partial return of international tourists.
This growth of total event capacity, number of individual performances and increased ticket prices, drove sector revenue growth of 11.6% to £892.8M in 2022.
In spite of this after adjusting for inflation, real revenue has fallen by 1.1% since 2019.
The Broadway League in New York also reported that the 2021-22 season delivered $845M in box office revenues from 6.73M admissions, down from the 2018-19 season which saw $1,829M and 14.77M respectively. And the first full Broadway season since the pandemic shutdown began (23.05.22–21.05.23) revealed $1,577M in grosses from 12.8M admissions, growth from the previous year, albeit still down from the period pre-pandemic.
The Metropolitan Opera reported a ‘slight uptick’ in ticket sales in its second season (2022-23) following the coronavirus pandemic, selling 66% of tickets, up from 61% during 2021-22, but still down from the 75% reported for the pre-pandemic 2018-19 season.
Similarly, as noted by others (including Dave Wakeman) the OPERA America report ‘Early Ticket Sales Study for the 2022-23 Season’ published October 31, 2022 noted that the overall number of performances were down 10%, single ticket sales down 84%, subscriptions down 33% and revenues from ticket sales down almost 50%, while the price of tickets was up 7%. (*Full analysis of the data is only available to participating companies.)
Changing territory, the British ALVA (Association of Leading Visitor Attractions) reported that in 2022 due to the cost-of-living crisis there were dramatic increases in admissions to free-attractions, and whilst overall audiences returned by approx. 118% Y-O-Y from the pandemic depressed 2021, ‘many attractions are still not back up to 2019 visitor levels.’
And lastly, albeit conversely, the English Football League reported its highest attendances for 70 years as nearly 22 million passed through the turnstiles of EFL competitions the highest cumulative figures recorded for league matches since 1953-54. Whilst the English Premier League reported a record 15,193,585 attendees.
So, is the football product more competitively priced, or the spectacle offered more ‘attractive’ than other genres of live entertainment?
This snapshot overview of post-pandemic live entertainment markets reveals a (partially) returning audience, but not consistently across genres, territories, or scale of events.
Whilst individual sector revenues appear to be growing in part due to price inflation and the greater adoption of premium-product strategies including bundles, packages, and dynamically priced inventory, this greater emphasis by event Rights Owners on upsale and yield management maximisation of ROI from each-and-every event, isn’t achievable, or desirable, for all.
The crude commercial focus appears to be to maximise the revenues from individual audiences, with less regard for overall audience development, or inclusion for those less able-to-pay.
There appears to be little awareness that the (diminishing) backlog of previously purchased and rescheduled events still incurs an incremental expense to attendees in terms on-site and off-site F&B, merchandise, transportation, accommodation etc.
So, overall revenues have been driven by the sheer glut of post-Covid concerts, tours, and festivals, combining those originally postponed by the pandemic alongside new activities, attractions, immersions, and entertainments.
And despite the obvious excitement for some audiences that ‘live’ has returned, there hasn’t been a noticeable increase in the frequency of event attendance, i.e., in general audiences are attending as many but no more events than they did before Covid-19.
So, the consumer wallet for live entertainment typically hasn’t increased, with the higher-priced tier#1 events in effect squeezing those with less FOMO.
In summary, in the last 12-18 months there has been a vastly increased event supply, with greater utilisation of dynamic-pricing (with the associated argument that this is (re)capturing revenues otherwise siphoned off by ‘bad actors’ via the secondary markets – for example, Live Nation reported that in 2022 it delivered $700M to artists with ‘more market value ticket pricing’) and more focus on incremental revenues derived from bundles, packaging & VIP ‘experiences’ which have all contributed to the reported post-pandemic boom.
So, boom, but no bust?
But even for those operators who are reporting record results, there are some indicators that there may be an oversupply of events, and further that this abundance of choice has meant that not every event can sell-out, or in some cases fail to reach the originally budgeted breakeven+, or worse may even be loss-making.
Live Nation: Concert Week & Festival Weekend
For example, on the May 4, 2023 Live Nation announced the return of its ‘Concert Week’ promotion, which this year offered $25 All-In Tickets (i.e. ticket + associated service fees included) to more than 3,800 shows by over 300 artists across North America.
Then May 17, 2023 Live Nation further announced a ‘Festival Weekend’ promotion offering $99 All-In 1-Day Tickets for 13 festivals across the U.S. for a ‘limited time only and on a first-come, first-served basis’.
Originally launched in 2015 the then $20 ‘Kickoff to Summer’ ticket promotion was designed as an ‘awareness campaign’ to re-introduce and promote its amphitheatre shows.
The word ‘discount’ was never used in any press materials, rather Live Nation typically referenced ‘robust sales’ aided by the incremental marketing exposure, whilst also stressing an expanded and improved F&B offering with craft beers, health-conscious dietary options etc.
The Live Nation ‘flywheel’ explains that F&B is where it derives a major part of its event-specific revenues (excluding ticketing & sponsorship) not least because typically 90%+ of the ticket price – whatever that is – goes to the artist.
The number of events and/or tickets offered by this annual marketing promotion has grown over the years:
- In 2017 ‘1M tickets’ were available.
- In 2019 this had grown to ‘over 2M tickets’.
- In 2022, ‘more than 3,700 concerts’ with tickets at $25 were available, which is a notable figure given that the total North American shows promoted by Live Nation in 2022 was 29,169 – so approximately 12.7% of the entire year’s U.S. concerts were involved in the (not) discounted campaign.
- And then in 2023, ‘more than 3,800 shows’ and ‘over a dozen festivals’ were offered.
In summary, for economists, ‘excess supply’ or oversupply typically occurs in situations where the price of the goods or services are too high, and there is insufficient demand at that level.
An oversupply may also occur when the producer of the goods or services has misread the market demand for those products.
When prices are too high, i.e., when demand is less than supply, then discounting is the most usual method utilised by retailers.
Lowering the price of a good or service may encourage consumers to purchase, but inevitably forces suppliers (in this case artists & attractions) in conjunction with the promoter/ producer to redraft budgets, trim productions, curtail tours, cut costs and/or share losses.
The annual (not) discounting but (re)promotion by Live Nation is therefore a signifier that the live music market, at least in North America, for a proportion of its events, is experiencing a level of ‘disequilibrium’.
This means that two seemingly conflicting ‘truths’ can be correct.
That executives at live entertainment companies who are claiming that post-pandemic demand remains strong and isn’t showing signs of letting up, are broadly correct – specifically for the tier#1 events.
But for consumers, the abundance of concerts, festivals, residencies, and tours, coupled with the surge-pricing of #tier#1 events, and the macro-economic constraints (inflation, cost-of-living crisis, ending of fixed-rate mortgages, caps on credit card expenditure etc.) forces a series of FOMO-informed prioritisation queries. Is this really the last ever tour? Should consumers convert their holiday budget to a festival ‘staycation’? If the general public do go to experience the glamorous Diva / K-Pop extravaganza / authentic ‘working class hero’ instadia or stand-in-a-field with tens of thousands of others, is their subsequent compromise of several months of sofa-bound streaming and home delivery worth it? Especially as some consumers may have no spare cash to see any other live acts for a while.
In short, post-pandemic, not every event will sell-out. And the over-supply of events will mean more individual concerts, tours and festivals will inevitably fail.
Live Nation Celebrates Summer’s Biggest Music Tours With 2nd Annual National Concert Day Show And $20 Ticket Offer (28th April 2016) https://www.livenationentertainment.com/2016/04/live-nation-celebrates-summers-biggest-music-tours-with-2nd-annual-national-concert-day-show-and-20-ticket-offer-2/
Join Live Nation’s ‘National Concert Day’ Celebration With 1,000,000 Tickets Available For Only $20 – On Sale This Week Only (3rd May 2017)
Live Nation Launches ‘National Concert Week’ With $20 All-In Ticket Offer Celebrating Kickoff to Summer Season (23rd April 2018)
Live Nation Celebrates National Concert Week By Making Over 2 Million Tickets Available To the Hottest Summer Shows for Only $20 (24th April 2019)
Live Nation’s Annual Concert Week Is Here – Get $25 Tickets To More Than 3,700 Concerts (28th April 2022)
Live Nation Announces Annual Concert Week: $25 All-In Tickets To Over 3,800 Shows This Year (4th May 2023)
Live Nation Launches Festival Weekend: $99 All-In One Day Tickets To Over A Dozen Festivals As Expansion Of Annual Concert Week (17th May 2023)