In a worst-case scenario, the concert industry could lose almost $9 billion if coronavirus quarantines don’t lift by the end of the year, according to a study just published by the trade publication Pollstar — and that figure does not include associated businesses such as transportation, production, marketing, concessions, security, sponsorships and more.
While Pollstar projected a $12.2 billion year for the industry based on its first-quarter chart — which was up 10.9% over 2019’s record-setting year to $840 million for 2020 while ticket sales rose 4.5% to 9.4 million — those projections changed virtually overnight as much of the country went into lockdown over the past few weeks.
“Estimating what might have been lost obviously depends on when the business rebounds,” the study says, “but if the rest of the year is dark – which is a worst-case scenario and certainly not expected – the potential $12.2 billion yearly estimate minus the grosses from all the shows completed before cancellations and postponements places potential losses for the remainder of the year right at $8.9 billion.”
The damage will be less severe if the industry recovers sooner in the year. Losses will be “much less, about $2.3 billion, if touring is possible as early as late-May,” the study continues. “And if quarantines continue through the summer, say, late-August, industry losses could total about $5.2 billion in just missed ticket sales alone.”
However, at this point no one can guess realistically when quarantines will lift, let alone when people will feel secure enough to pack closely together with fellow humans in theaters, arenas and stadiums.
For the past 15 years, the concert business has been the primary financial engine of the music industry. As CD sales plummeted in the first years of this century and the bottom fell out of the recorded-music business in the wake of Napster and illegal downloading, artists came to accept their recordings as a loss leader, a sort of sampler to entice fans to their concerts and merchandise, which, along with sponsorships and synch opportunities, gradually became the primary revenue streams to enable them to make a livelihood and a living.
In just one telling example, Pollstar reported that 12 tours grossed more than $100 million in 2019.
Indeed, Pollstar notes, “The pandemic arrived at a time when box office success from global concert touring had been steadily on the rise, a ‘Live Golden Age’ if you will, with grosses and attendance figures reported to Pollstar showing unprecedented growth. That trend was continuing full steam as we entered 2020, based both on anecdotal evidence – agents, promoters and managers we spoke with were bullish on 2020 and forecasted a record-setting year – and the analysis of our latest box office numbers. While $12.2 billion for the year is a massive number, if one were to add the multiplier effect of each ticket sold across the entirety of the live music industry economy, it wouldn’t take too much calculus to arrive at a full economic impact as high as an estimated $20 billion.
“Instead, live is enduring the most brutal body blow in its history.”
The first quarter of 2020, which spans Nov. 21 through Feb. 19, was largely unaffected by the pandemic and actually grew significantly year-over-year. Pollstar’s Top 100 Worldwide Tours chart, based on global ticket sales, saw increases in both the number of sold tickets and total gross. At the end of the first quarter, the gross figure amassed by the top 100 totaled $839,653,875, a significant rise of 10.92% over the same period in the previous year. Ticket sales also rose 4.6% to 9,438,879 reported to Pollstar, with the industry on its way to a record-setting summer season.
Instead, virtually every concert tour has been postponed or cancelled, including the Rolling Stones “No Filter Tour,” the Eagles’ “Hotel California Tour,” Elton John’s “Farewell Yellow Brick Road Tour,” and hundreds of others.
But ticket sales are just one element of the devastation the lockdown has wreaked on the industry. “To get at how this impacts the greater economy, one must look at the multiplier effect of a single ticket,” the study continues. “This includes per capita spending on merch and food, which is at least $10 a head, as well as transportation, parking, gas (another $25 -$50), restaurants and lodging (festivals, residencies, etc). Additionally, each tour pays or helps pay the salaries of tens, if not hundreds of thousands who work in venues, production, marketing, concessions, security, box offices, sponsorships and more.”