For nearly two years, the live music industry came to a halt due to COVID-19. Tours were canceled, roadies lost their jobs, venues faced difficulties, and support staff were laid off. However, with the lifting of COVID restrictions, the industry has made a comeback, although not without challenges.
Deryck Whibley of Sum 41 shared that they had to resort to old-school touring in a van since tour buses were not available. Most buses had been parked for two years and were still not roadworthy. Rental agencies with available buses increased their prices, and acts who could afford it took them. Sum 41’s buses ended up going to Metallica.
Other problems arose as well. Many roadies left the industry after losing their jobs and didn’t want to return. Finding enough sound and light equipment to rent became difficult. Some venues did not survive the lockdowns and permanently closed their doors.
However, this summer has witnessed a return to pre-pandemic times. Concerts and festivals have been packed with attendees. While Taylor Swift and Beyoncé have attracted attention for their record-breaking revenue, other acts are also doing well. Drake, for example, is playing in front of up to 34,000 people a night on his current tour and recently became the first rapper to earn over $5 million for a single show. Ed Sheeran, too, broke attendance records in various cities.
Live Nation and AEG, the largest concert promoters, are experiencing record revenues. It is estimated that the live music revenue in Canada will reach around $1.3 billion with a projected annual growth rate of over three percent. The average spend by a Canadian concertgoer is approaching $200.
However, despite these positive aspects, the live music industry, like other sectors, faces rising costs, higher insurance premiums, higher interest rates, debt from COVID-19, and other financial pressures. There have even been reports of porta-potties being in high demand at festivals, causing some to be underserved. Additionally, opportunistic gouging is prevalent, with exorbitant parking fees for popular shows.
Running small-to-mid-sized venues has become increasingly challenging due to scaling limitations. While large promoters can manage rising costs more easily, smaller venues struggle. This is reflected in higher ticket prices and increased costs for parking, concessions, and alcohol at shows.
Moreover, the live music industry is witnessing a change in consumer behavior among Gen Z, who are the prime attendees at live events. These young fans are drinking less alcohol, impacting an important revenue stream for smaller venues heavily dependent on bar sales. Many Gen Z individuals are pursuing a more straight-edge lifestyle for better mental health, which further adds to the worry for smaller venues.
The decline in bar sales has led to another issue: merch cuts. Artists heavily rely on the sale of T-shirts and souvenirs at shows, but venues demand a share of the sales to compensate for their own financial struggles. Rates vary but are often negotiable, ultimately burdening the artist.
The live music industry faces additional challenges such as the deadline for repaying loans obtained during the pandemic, potential funding cuts by governments, and the inevitability of high prices. Fans will have to choose between saving for big acts or attending multiple smaller shows. Music residencies and performances at venues like casinos are becoming more popular, involving higher travel expenses for fans.
On the artist side, there is a growing allure of playing corporate gigs, which doesn’t directly impact the average concertgoer but may affect the artist’s reputation. Overall, the future of the live music industry is uncertain, especially as inflation and interest rates prompt individuals to cut back on discretionary spending.
In conclusion, while large acts, venues, and promoters may thrive, the future remains uncertain for smaller entities in the live music industry.
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