How Covid-19 completely messed up the concert industry.

The scenario is devastating: unemployment, disappearance of small promoters, astronomical losses: the doldrums installed by the pandemic of the new coronavirus in live music.

At a time when all concerts and festivals are suspended at least until July, the situation is potentially dramatic for independent promoters, as well as stage-setting companies and merchandising vendors.
In a world-market dominated by two big show promoters, Live Nation and AEG, and four agencies, they are likely to be the smallest companies to pay the highest bill for the crisis caused by Covid-19.

In the United States, this is an industry with about 50,000 wage earners and 200,000 self-employed or seasonal workers. In Europe the numbers are not too far. The big summer festivals in Europe are the main income source for 90% of small concert promoters in Europe and this season goes from May until August. If there is effectively no live music by July, it is estimated that the losses could exceed ten billion euros, many concert promoters will shut-down duo the high-looses.

Concentrating three quarters of the market, however, Live Nation and AEG have greater bargaining power, particularly with regard to the advances they have to pay to the agencies for each concert or tour. Despite having lost, since the beginning of the pandemic, half of its stock market value, Live Nation is expected to emerge from this crisis with its market share intact, recalling that the company still owns Ticketmaster, the giant ticket sales company, and that the money from tickets already purchased for concerts that have not yet been canceled remains in the coffers of these companies. Whether or not to refund money already paid by ticket buyers is an issue that remains unclear.

In 2019, Live Nation recorded a 7% increase in its profits, raising almost 11 billion euros. Bearing in mind that, in addition to the gains from tours, the company also concentrates the funds from agency operations, sponsorships and other sources of revenue within itself, the impact of the crisis should be suitable for such a prosperous company. It will be the smaller promoters, with less room for maneuver in negotiations with agencies, to suffer more from this forced stop.

The market that will emerge from this crisis, will be “even more concentrated and more competitive”. Currently, the “big six” of live music — Live Nation, AEG and the WME agencies, Creative Artists Agency (CAA), Paradigm and UTA — say they are working together to postpone cancelled events to August/September/October in Europe and US, Coachella festival is one example in US, Primavera Sound in Europe.

However already exist canceled events in both sides, Glastonbury and Radio 1 Big Weekend cancelled due to coronavirus in Europe and South by Southwest in USA. That decisions had massive costly financial consequences and led to the dismissal of an half of the festival’s teams in both sides, South by Southwest did not return the ticket money yet.

Unemployment is, moreover, one of the most likely effects of the crisis caused by Covid-19, as an example Cirque du Soleil and Feld Entertainment, which a week after Live Nation and AEG suspended their their shows, dismissed six thousand employees, that is, 90% of their workforce.

In Europe big summer festivals starts to be cancelled or postpone, this situation will lead to massive unemployment rates across countries like United Kingdom, Germany, Poland, France, Spain, Italy and Portugal.