Crefovi's newsletter: Live touring and ticketing - the sky is the limit, despite anticompetitive allegations marring the live industry

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Let’s dive into the characteristics of this very serious contender for the top spot for revenue generator in the music industry. The live touring and ticket business is back with a vengeance, post COVID-19 pandemic. However, not all is well in this very lucrative sector of the music industry, as tour promoters and venues, and even search engines (!), see their liability, legal and financial risks increasing, in a world dominated by fans’ satisfaction, safety and fair access to tickets.

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1. How live and touring have become the core revenue stream for artists

The music business has many facets, with each musical activity generating its own sources of revenue, as follows.

The music publishing side, which mainly derives income from monetising the copyright on musical compositions and song lyrics:

• by way of royalties on public performance rights, collected by music collective rights management societies around the world, from music users such as major TV networks, radio stations, pay cable services, digital service providers, websites, concert halls, the hotel industry, nightclubs, bars, theme parks, etc.;
• by way of royalties on mechanical rights on public performance rights (also called additional mechanical rights), deriving from TV, radio broadcasting, as well as internet broadcasting on sites such as Dailymotion, YouTube and Vimeo, also collected by music collecting societies;
• by way of synchronisation fees, paid to music composers and lyricists, as well as to their music publishers and sync agents, for the licencing of copyright on musical compositions and/or lyrics which are synchronised into video content (such as advertisements, films or TV series and other visual projects), and
• by way of print licencing fees, paid to music publishers, to obtain the right to print, display and publish the music notes and lyrics of a song on sheet music and scores, which are then sold to music performers who will perform those songs.

The second income stream is the sound recording side, which mainly derives income from monetising:

• the neighbouring rights on sound recordings (also called phonograms, songs, music tracks, etc.), by way of royalties collected by neighbouring rights collecting societies around the world, from music users such as major TV networks, radio stations, pay cable services, websites, the hotel industry, nightclubs, bars, theme parks, etc.;
• the streaming rights on sound recordings, by way of streaming royalties paid by digital service providers such as Spotify, Deezer, Amazon Music, to music performers and their music labels, and
• the copyright on the master recordings, by way of sync fees paid to music performers (singers and session musicians), as well as to their music labels and sync agents, for the licencing of the sound recordings which are synchronised into video content (such as commercials, films, TV programmes and other visual projects).

Next to revenue streams derived from the above-mentioned copyright in the music compositions and lyrics, as well as copyright in the master recordings and neighbouring rights, there is touring income.

Touring revenues are generated by tickets bought by fans, music lovers and teenage fans’ chaperones, in order to have the privilege of watching a music performance live, either in a concert venue, a school, an arena, a stadium, a casino or online on a streaming site.

Indeed, most music performers model their careers on that of the concert performer (in terms of both live and recorded performances). Touring is essential for performers to:

• develop their craft;
• grow and sustain their audiences;
• help promote their record, stream and merchandising sales, and
• build their stature (for this reason, most ?non-legacy” performers will schedule tours to coincide with the launch of a new record album release).

Concert performers function through true business entities, as opposed to being employees of a producer or promoter. They possess assets (such as valuable names, trademarks, very expensive music, sound and lights equipment and instruments, and often copyrights on their songs, musical compositions or lyrics); employ numerous individuals (such as agents, managers, supporting musicians and tour personnel) and, if all goes well, earn substantial touring income.

Post COVID-19 pandemic and its string of excruciatingly-long lockdowns, the live touring industry has come back with a vengeance, with some performers’ tours single-handedly being recognised as contributing to a nation’s, or town’s, economy, in the billions of USD or GBP.

While most music performers, composers and lyricists complain about the paltry level of their streaming income, which is going to get even smaller for the vast majority of performers due to the implementation of Spotify’s new 1,000 play minimum policy, touring is increasingly seen as THE way to make serious bucks in the music industry. Some industry analysts go as far as to say that touring is where musicians make most of their annual total income, dwarfing the revenue earned from streaming.

Pollstar, a service that monitors live performance/touring statistics, reports that live concert sales for the 2023 worldwide top 100 tours were up 46 percent to USD9.17 billion from USD6.28 billion the previous year. Average grosses were up a whopping 53.20 percent to USD2.37 million per show from USD1.54 million. Attendance increases were less dramatic but still significant: total ticket sales were up 18.40 percent from 59 million to 70 million; and average tickets per show were up 24.25 percent from 14,570 to 18,103. Average ticket prices increased 23.33 percent from USD106.07 to USD130.81.

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Crefovi's live webinar: Live touring and ticketing -?the sky is the limit, despite anticompetitive allegations marring the live industry

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26 January?2024?| 15:30pm London time

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Crefovi's live webinar will begin on Friday 26 January 2024 at 15:30pm London time (UK), and will provide an in-depth analysis on the live touring and ticketing industry. The sky is the limit, despite anticompetitive allegations marring the live industry.

You haven’t yet secured your free place for our upcoming webinar on music law?

Here is your chance to join Annabelle Gauberti on Friday 26 January 2024, 15:30pm London time (UK) as she explores how The live touring and ticket business is back with a vengeance, post COVID-19 pandemic.

In this webinar, our expert speaker will discuss:?

• How live and touring have become the core revenue stream for artists;
• The live and touring ecosystem, and
• Ticketing issues in the live music industry.

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