What's Probably True (and Probably Isn't) About The Future of Concerts

With New York State set to commence its "un-pausing" on Friday, May 15th, and with other states having already begun reopening their economies, it actually feels like we're climbing out of this deep ditch created by the coronavirus.

New York's plan is 4-phased, starting in the less populated upstate areas and then if all goes well, it will make its way down to the New York City area sooner rather than later. The businesses that will open in the first phase will mainly be construction, manufacturing, and certain retail. Subsequent phases will follow at 2-week intervals contingent upon progress made in mitigating the spread of COVID-19. It won't be until the 4th and final phase that live entertainment will be allowed to reopen to audiences. Las Vegas will also approach its reopening in a similar way, slowly bringing back its casinos and shows, at first with limited capacities, but with an eye towards reinvigorating its famed Strip as soon as possible. In a situation brimming with cruel ironies, it stands to reason that the cultural aspects of our society that were hit hardest by COVID-19 will be among the last to recover.

The concert industry in particular will therefore have to withstand a heavy blow for a while longer as it tries to reconcile the complicated and unique challenges that it's faced with. Whereas some are writing the eulogy for concerts, citing projected prolonged economic hardship as well as a permanent shift in people's attitudes towards live entertainment given potential health risks and attractive at-home options for enjoying music, there are still some solid reasons for hope and possibilities for new opportunities in the concert space that should inspire optimism for the beleaguered industry. There are myriad circumstances that will effect the concert industry from here on out, and plenty of opinions on what the future holds, some of which are likely true and some of which aren't. Among them are:

True or Not True Issue 1: Streaming video will hurt the concert business.

Video may have killed the radio star, but remember when televised games were supposed to be a death knell for sports attendance? So afraid was the NFL of how its own gaudy TV deal would impact attendance at games that it instituted a TV blackout rule for more than 40 years, which forbade a game from appearing on TV in its home market if it was not close enough to being soldout. And do you remember what's happened since? Not only has televised sports surpassed being the boon it was expected to be, but it turned out to be the best possible marketing tool for the live experience and attendance has increased exponentially over the decades.

With the prominence of downloadable digital music files (MP3 and others), the recording industry has suffered mightily. Since recorded music can be accessed for free or inexpensively as part of a subscription streaming service, traditional consumer recording formats like the CD are all but extinct. The incremental returns paid out by streaming services are minuscule compared to the $15 or so a pop that an artist would command from a CD sale. This caused a transition over the last decade to a heavy reliance on touring for income, and this is why so many artists seem to always be on tour. Without the ability to attend concerts for the time being, music fans have been watching concert footage on platforms such as YouTube, and artists have gotten creative, livestreaming concerts, jam sessions, and even music lessons via Instagram and other social media services. Not only has this helped to fill a void, but it has provided uplifting intimate access to artists in a time when intimacy is appreciated. There's legitimate concern inside the concert industry that the at-home formats will usurp live concerts and perhaps even replace them as the preferred way to get up close and personal with music. But just as sports attendance increased in the age of the 100-inch screen, HD home theatre, concerts can still thrive when fans have viable alternatives at their fingertips. Besides, even if accessing music and other forms of live entertainment at home is convenient, it doesn't offer the opportunity to engage as deeply or completely with the entertainment as you would when you're there live; either you're falling asleep on the couch or you're getting interrupted by the kids, as if it's not easy enough to get distracted anyway and hit the pause button. The bottom line is, the truly engrossing experience requires you being there. If anything, the music industry can use this present condition as an opportunity to monetize video access to artist content as a way to compensate for the lost revenue that used to come from record sales. This would make the music business less reliant on touring revenue, but it wouldn't necessarily make attending a concert any less desirable than it was before.

Verdict: Probably NOT TRUE

True or Not True Issue 2: COVID-19 will have a longterm and wideranging effect on the concert business.

The concert industry had been enjoying untold success before a pandemic stopped it dead in its tracks. But despite its record breaking trajectory at the gate, there were some reasons to be concerned that the non stop touring machine was beginning to show some cracks. Several recent high profile tours were either cancelled altogether or had particular dates cancelled or postponed, and prominent music festivals were mired in red-tape, litigation, and/or various other types of conflicts. Furthermore, unfriendly ticketing practices such as price manipulation and surprise delivery restrictions caused controversy with fans and drew unflattering attention to some of the unsightly aspects of touring. Given the sheer volume of tours taking place, there were bound to be some missteps along the way, but that didn't stop the industry from taking in record revenues and top dollar for tickets, at an average of almost $100 per seat.

Now, all of that momentum has been stymied by COVID-19 and the mandates against large gatherings that have come with it. Conventional wisdom suggests that as people begin to reacquaint themselves with culture and society that they'll be slow to come back out to concerts, especially given the fact that we still don't know when fans will be allowed to attend concerts, what restrictions they'll encounter once they are, as well as lingering health concerns. So it stands to reason that the concert will experience a more pronounced decline from its lofty heights than it otherwise might have. Compounding this scenario is the fact that the concert industry exists in a complex and diverse ecosystem, in which it is co-reliant on other types of businesses; anything from carpenters, to engineers, to transportation, to security, to maintenance, to concessions, among many, many others. The absence of concerts and other large scale events has impacted each of these industries to the point of financial distress. This will create a problematic cycle in which the industries that relied on touring were hurt to the point that they may not be available or viable to service the concert industry once it's ready to ramp up again.

There would be no shame in diminishing touring returns based on the fact that the industry had been on all-time highs. However, any reduction in touring would certainly impact those industries and individuals that support the concert business, particularly on a show-by-show basis. Losses in the area of $20 billion for 2020 across the live entertainment landscape will certainly have a lasting effect. Furthermore, the accelerated economic decline resulting from COVID-19 will shake the concert industry and related industries all the more violently and with greater impact, ensuring that the rise back to the top will be anything but smooth.

Verdict: Probably TRUE

True or Not True Issue 3: People will simply stop going to concerts.

Every crisis is different. The novel coronavirus is indeed unique in its pathology and we're still as yet uncertain as to what its official legacy will be. So we can't always draw on past experience to accurately predict the future. But, we can look to similar situations as points of reference and examine historical patterns in order to guide our strategies and tailor our expectations. Since its introduction, COVID-19 has been compared most strikingly to the Spanish Flu epidemic of 1918-1919. Although the two diseases represent different strains of respiratory illness, the highly communicable and widespread nature of each provide some definite similarities. That said, the world was a much different place a century ago, when Spanish Flu infected 500 million people and resulted in up to 50 million deaths. The global population was less than 2 billion at the time, about a fourth of what it is today, and it coincided with the end of World War I, which was complicit in its rapid spread. Yet, the period immediately following that pandemic, the Roaring Twenties, was one of the most significant cultural and economic renaissances in the history of western civilization. With a much larger global population today than there was in 1919, and with a lower expected infection/death rate from COVID-19, there's no reason to believe that once the dust settles, human resolve and ingenuity won't pave the way for yet another major boom. In fact, the conclusion of World War II brought on the Golden Age of Capitalism, a period of industrial, economic, and cultural prosperity that lasted more than 30 years, once again proving that humanity is at its most resourceful when arising out of difficult times.

The idea that people will stop doing anything that they've traditionally done because of COVID-19 is unfounded as historical context suggests exactly the opposite. There will likely be some trepidation at first, but we'll also eventually learn how to manage the disease and treat it. By then necessity and desire will have reestablished themselves and not only will we be going to concerts again, but we may be on the precipice of another great cultural awakening.

Verdict: Probably NOT TRUE

True or Not True Issue 4: Economic turmoil will affect people's willingness to spend on concerts.

How does that Barbara Streisand song go again? People, People who need people, Are the luckiest people in the world... Regardless of the severity of extenuating circumstances, this will always be true. We're social creatures and no amount of Zoom Happy Hours will ever change the need for interpersonal relationships and shared experiences. The toll that COVID-19 has taken on the economy, with businesses shuttering and loss of jobs will undoubtedly impact personal budgets as households carefully examine how they spend money, particularly on discretionary items like entertainment.

However, the average concert-goer has an annual household income above $80,000, while more than half of those affected by job loss or pay cuts have sadly been from the lower end of the pay scale. Higher income earners have in no way been immune to the tsunami of joblessness that has more than 30 million Americans seeking unemployment benefits. Yet the unemployment rate for those earning $75,000 and above is about half what the overall unemployment rate is. This means that the concert audience has been largely left financially intact and the main obstacle to attending concerts won't be financial, although health concerns will likely still cause reluctance amongst would-be concert-goers.

The need for social interaction can still lead people to activities and events that are either free or less expensive than concerts are. Still, there's a certain ritual and pageantry associated with attending concerts that will always be a significant draw. We'll gravitate towards those handful of live events per year that have the potential of providing once-in-a-lifetime experiences. By the same token, if in fact consumers from the higher end of the financial spectrum will be looking to budget more efficiently, it's highly possible that a concert would replace a vacation or a weekend getaway as the occasional splurge.

Verdict: Probably NOT TRUE

True or Not True Issue 5: Consolidation will be a major obstacle in the concert industry's recovery.

Economies contract. It's a natural part of the economic cycle and is as vital to the overall health of an economy as growth is. Contraction helps to weed out excess, it allows truly exemplary products and services to shine, and it motivates innovation and new economic development. That doesn't mean that contraction doesn't issue some pain along the way. Businesses close, jobs get lost, and production and spending recede. Naturally this would impact the concert industry just as it would any other.

The rapid decline of our consumer economy has accelerated the phenomenon of contraction to uncommonly stressful levels. Businesses that may have survived in a normal downturn won't be able to. Among those will be smaller concert venues like clubs and theatres that are vital to gigging musicians. Another industry that will contract and experience consolidation is the ticket industry. Some ticket sellers will merge while others will fold, thus shrinking not only the distribution channels that ticket buyers seek, but it will make the ticket market less competitive which can be less favorable to consumers in the long run.

Besides the consolidation in the economy, the calendar has also been consolidated since events were shutdown, leaving event organizers scrambling to reschedule events, in many cases at the earliest available dates. It's preferable for organizers to postpone and reschedule events rather than cancel them outright, in which case they would have to issue refunds and then sell tickets anew. However, new policies in the ticket industry implemented in response to COVID-19 allow for refunds for rescheduled events if requested within a certain timeframe. A truncated 2020 means that rescheduling an event risks conflicting with other events, such as sporting events and other concerts. There simply won't be enough dates in the near term to reschedule events quickly enough in a way that makes sense. This will be particularly problematic for festivals and other outdoor events which rely on good weather, often need to coordinate with multiple artists, and will be looking to reschedule from the spring, for example, to the autumn, while weather is still pleasant. The challenge here will be to avoid running up against previously scheduled events and other festivals, which may force the audience to opt for one event while skipping another that they would have otherwise attended, due to the close proximity of the dates. Of course, all of this is moot if audiences are not allowed back into events until past the time that events have been rescheduled for. This makes anything rescheduled for the late part of 2020 merely speculative, as some estimates don't see audiences returning until late 2021, which would freeze the concert industry for an unbearable period of time. So, while economic contraction and consolidation are fundamental, the global health crisis from COVID-19 exacerbates their impact on concerts in many ways leaving a treacherous road to recovery in its wake.

Verdict: Probably TRUE

The concert industry is not alone in that it continues to face daunting challenges as it attempts to sort itself out in the time of COVID-19. However, its challenges are unique, complex, and will take time to overcome, as states begin the uncertain process of reopening. Fortunately, these challenges are not insurmountable for the industry and time luckily heals all wounds.

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I welcome your feedback on my articles, whatever your opinion may be. I'm fascinated by the ticket market as a facet of our overall economic landscape and often discuss my views in writing. Sometimes, I write not about tickets but other topics in sports, music, and entertainment. For tickets to any event, anywhere; including the best in sports, concerts, theatre, and more, please visit www.seatslink.com. I'm also happy to help you navigate these uncertain times, even if you just have a question about refunds and next steps regarding tickets you purchased. You can find out more information from the Seatslink Facebook page, and can get updates and information sent to your email by registering for the Seatslink mailing list! Feel free to DM me on LinkedIn, email [email protected], or call 718-676-0504 for assistance with tickets and events.