The last couple of years have been great for the live music industry. After being locked up with the pandemic for a couple of years, fans splurged on concerts and festivals in an orgy of “funflation,” that sense that life’s too short and you might as well enjoy it while you can, no matter what it costs.
There were a couple of excellent years as revenues exploded, quickly returning to pre-pandemic levels. It’s now a $40 billion a year business with the top 100 tours grossing US$9.2 billion in 2023, which is nearly twice as much the US$5.5 billion grossed in 2019.
However, things are getting a little cloudy. We might have reached some kind of breaking point.
I first wrote about this problem back in April when it appeared there was a lack of enthusiasm for this year’s crop of music festivals. For the first time in years, Coachella struggled to sell out. A worrying number of Australian music festivals were cancelled. Word in the U.K. was that festival-happy Brits were sitting on their wallets, endangering many festivals. Since then, things have only become worse.
At last count, at least 40 British festivals have been called off with many others on both sides of the Atlantic either teetering or announcing that they’re done after 2024. Jennifer Lopez cancelled her entire tour. The Black Keys’ arena tour was postponed so it could be scaled down to more intimate (read: smaller) venues. Busta Rhymes called off his Blockbusta tour. After scoping out a European tour, 311 has decided to call off everything, citing “rising costs of touring overseas.” Pink and Justin Timberlake have cancelled a couple of shows each. The Jonas Brothers were going to Europe, but not anymore. Guitarist Robin Trower announced he’s staying home. I’ve heard from other mid-range acts — artists you would think could reliably draw good crowds — say that the economics of touring just don’t make any sense.
While it’s still early in the summer touring season, promoters continue to worry if punters will show up for gigs they’ve got scheduled down the line. What’s going on?
The short version is that people have run out of money. They’re having to make hard choices about which shows they’ll attend and which ones they’ll have to miss.
Acts like Taylor Swift, Beyoncé, and Madonna have drained bank accounts as people not only attended local shows but travelled to out-of-market gigs. U2’s 40-night stand at The Sphere in Las Vegas — which was worth the price of a ticket, by the way — grossed US$240 million.
With tickets for superstar acts so expensive, it’s easy to blow the annual allocation for concerts with just one or two shows, meaning there’s nothing left over to spend on midrange or emerging acts. With so many people struggling with the cost of living, concert ticket sticker shock comes into play. A show that a fan might attend on a whim is the first to go. Casual music fans are staying home to watch Netflix. Even hardcore fans are balking at spending $100 for nosebleed seats.
Ancillary expenses have also gone up. It’s not uncommon to see parking lots near a venue charge $40 and above for a space. Inside, food and drink costs more. And if you travel away from home to see a show, there’s the matter of transportation and accommodation, both of which are hardly cheap. Toronto hotel rooms for Taylor Swift’s visit in November are insane. Anyone wanting somewhere to lay their head for those couple of weeks in November will be shocked to learn that $2,000 a night is the going rate at many establishments.
The prices for top-tier shows are not coming down, either. I’ve heard industry insiders lament that tickets for the biggest stars are still too cheap and in no way reflect their true market value. At the same time, though, they’ll admit that tickets for everyone below that level are too expensive. Meanwhile, the secondary market of ticket resellers continues to make it difficult for regular people to afford concerts. (Fun fact: Average resale ticket prices seem to be dropping, an indication of … something.)
Meanwhile, there are just so many acts on tour — too many, in fact. The market is saturated. But given that some artists derive up to 70 per cent of their revenue on the road, they need to tour to make ends meet. Staging a road trip has also become more expensive. Standard inflationary pressures are bad enough, but add in shortages of everything from gear to trucks to buses to roadies, up-front costs have skyrocketed. The U.S. has also boosted the price of visas for foreign acts, which is an issue unto itself. But if the public has run out of money — well, you can see how the crises start to pile up.
There also has to be much consternation behind the scenes, too. One concern is the dwindling number of smaller venues, an essential part of the live music system. If you’re an artist of a certain size, it doesn’t make financial sense to play anything bigger. How many artists have quietly decided to forgo a tour instead of risking playing before a sea of empty seats and losing money?
While many are bullish on the future of live music — Goldman Sachs included — there are others who say that the current trajectory is unsustainable. And what happens when the biggest acts, many who are in their 60s and 70s, disappear from the scene?
Maybe when Taylor Swift finally takes a break, everyone will be able to take a breath, replenish their concert ticket funds, and things will turn around. Or maybe not. What if the economics of live music dictate that the industry needs more venues like The Sphere? It’s certainly easier for acts to play residencies and have fans travel to them. How much could that scenario drain away from the middle and lower end of the market?
The live music industry has always been risky. We might soon find ourselves in a situation where things are even riskier.