The music industry is in a state of immense transition the likes of which we have never seen before. To make matters worse, judging by the ongoing rate of major festival cancellations and postponements, it does not appear the industry machine will be starting back up again in full until fall 2020 at the earliest–and that’s in a best-case scenario.
Since the explosion of recorded audio for commercial purposes sparked by the invention of the mechanical phonograph cylinder by Thomas Edison in 1878, the music industry’s evolution has been tied to technological innovation. The advent of radio broadcasting in the 1920s and the birth of the corporate recording labels shortly thereafter, the launch of MTV and the music video era in the 1980s, the rise of online retail and distribution via platforms like iTunes in the early 2000s and, most recently, the arrival of streaming, have all played their respective roles over the last 100 years in forcing the industry to adapt or die.
Now, the industry finds itself at a new crossroads—one which, though hopefully not as permanent as previous shifts in consumer habits, will force its strongest corporate minds and innovators to come up with ways to save not only individual jobs and departments but entire companies. According to a report from Billboard shared this week, before the pandemic, the live side of the industry had employed 50,000 salaried and contract employees and 200,000 part-time and seasonal workers. Many of whom, are now out of work for what could be months, with zero chance of finding a gig in their area of live entertainment expertise.
While it’s tough for even the largest companies to come up with game-changing strategies to save themselves from entering very possible bankruptcy, there are some realistic projections as to what fans and industry personnel could see happen to their colleagues and competitors over the next few months.
Mergers & Acquisitions
From Wall Street to Shakedown Street, commerce at large is a buyer’s market right now. The value of specific products and companies is dropping by the day—unless you make toilet paper or alcohol—thus opening a window for prospective buyers who have the necessary means to step right in and make a big-time offer to buy out their competition that may be bleeding cash thanks to the dismal current state the market.
Even though the biggest organizations in the industry (AEG Live, Live Nation, etc.) are dealing with the same economic stresses of their own–the Billboard reports states that every day after April 1st that Live Nation can’t put on concerts, it loses earning $30.3 million in revenue–it wouldn’t be surprising to see smaller, independently owned concert venues, festival brands, talent agencies, or show production companies offer up a potential merger or sale to a larger fish in hopes of simply staying afloat and saving their employees.
Think of this theory as similar to the 2008 financial crisis when numerous major banks were forced to merge with or sell to their competition to prevent bankruptcy on a larger scale. The drastic downside to this inevitable strategy, is that the two major promoters who already have commanding control over the industry, will only become more powerful.
Paradigm Talent Agency, for example, has reportedly temporarily laid off hundreds of its employees in the last week. Additionally, a report shared by CULTR this week said Paradigm supposedly already in talks with larger agencies like CAA and UTA for potential sale valued at $300 million.
AEG Live + Live Nation Will Roll Out Their Own Streaming Platforms
Perhaps this was a plan all along, but at this point, the timing is inevitable for the two largest concert/event producers in the country to roll out their own video streaming platforms. Over the last decade, concert and festival livestreams have gone from an experimental outlet for event producers to the norm in expanding revenue outside of ticket sales. With the loss of live events, real-time streaming of live performances artists’ home studios and re-broadcasts of previous events by way of Facebook and YouTube are now nightly occurrences, and all eyes and ears have been tuning in.
It’s safe to assume that AEG and Live Nation have vaults upon vaults worth of video content captured from all the concerts and festivals which they both own and produce every year, giving them enough material to roll out over the next few months and beyond. The two companies do license the use of such video content to television broadcasting stations like AXS TV or MTV Live, but think of this strategy as similar to the launch of Disney+. Brands like Disney or the newly-merged ViacomCBS could license their intellectual property to pre-existing streaming outlets like Netflix or Hulu, which they both have in the past. But why would a company with endless financial and technological resources like Disney worry about lending its intellectual property to Netflix’s streaming platform when it could just launch its own, which it since has?
AEG and Live Nation could license their video archives to a Nugs.tv or a similar service, but why would they when both of those companies have the resources to simply launch their own streaming platform? If there were ever a time when industry giants were to take the inevitable step into the booming video streaming industry, it’s now.
A Boom In DIY Album Projects
It’s already happening. From Trey Anastasio to White Denim, artists of all genres who aren’t tied down to legally-binding release restrictions from their labels are using all this free time at home to write, record, and release new music. There’s never been a better time to be a creative, as outside distractions quickly dissolve to make way for what could be months of personal time indoors in solitude. If artists are smart and have any burning initiative in them to do what they love, they will use this time away from the road to focus their energy on the core of their craft—songwriting.
When this is all said and done, and maybe even before, fans can expect to see (and hear) the release of a lot of album projects and recordings inspired by or composed/recorded during this time of mass quarantine. Home studios and songwriting couches have never been busier, and as a result, there’s about to be a lot of new music on the horizon. Buckle up, folks, and get those headphones ready.
Labels Turning To Archival Releases & Deluxe Reissues
It will be interesting to see how record label executives and their teams, who have already spent that last decade in panic mode with the ongoing loss of monetary value in recorded music, manage their approaches to continuing to release music. The good news for labels is that the sale or streaming of recorded music doesn’t require mass gatherings in order to turn a profit. The issue here is that some artists—like Lady Gaga, for instance—have decided to put the release of their planned studio albums on hold until the economy recovers a bit. One also has to imagine that other artists and labels share the same mindset of waiting until the country’s employment rate gets back to healthier spending levels.
In the meantime, labels and artists might turn to previously-shelved projects or archived live recordings to supplement the lack of earnings from new releases. This is the normal practice for artists within the jam scene, as bands like the Grateful Dead have managed to chart a mind-blowing 100 albums over their career—many of which were live archive releases—despite never having made much a dent in the market with their studio efforts.
Although the market for selling recorded music is still dismal at the moment—and likely to only get weaker—deluxe reissues and live albums would have the strongest earning potential with the quickest turnaround and lowest production costs. That route, as opposed to labels waiting on artists and their production teams to finish a studio album already in progress from different locations, would have the best chance at keeping the lights on at the office until this pandemic blows over.
Artists Expanding Their Professional Brands
Artists and creatives now find themselves at a unique place in their careers where many—mostly low-earning, independent musicians—will have to find new ways to earn money without performing concerts. Even major artists will have to find innovative ways to supplement their lack of performance earnings. This could easily act as a blessing in disguise, however, as many artists will be creative enough to use their skillsets for other purposes.
Take John Mayer for example, who has put a bit more time into his DIY late-night Instagram show, Current Mood, which has been more active over these last few weeks. The Disco Biscuits bassist Marc Brownstein has recruited members of Umphrey’s McGee, STS9, and more to dive into the world of online music lessons. David Crosby is also using skills he’s picked up over the years to focus on cannabis these days, as he’s spent the last few weeks judging the joint-rolling skills of his fans via Twitter, and his opinions on their attempts are just as entertaining as his music.
It will be interesting to see how artists use their platforms and built-in audiences to expand their brands and try their hands at a new venture for a change. When life gives you lemons…