State of Music Industry: Article Series to understand the Impact of COVID-19 on the Music Industry
/
By Dominic Wren
The novel coronavirus has hit 2020 like a bus. Most parts of the national and the international economy have taken a beating like never before and it there doesn’t seem to be much end in sight. The music industry is in no way protected from this crisis and some even argue that it is one of the hardest hit sectors of the economy. During these uncertain times, so much of information is circling around of the impacts of the virus and it can become somewhat confusing to wrap your head around. In an attempt to clarify all this at least a little bit, a series of articles have been created for you all to read at your own leisure with the hopes that it will make the current situation slightly clearer. The next few articles will look at some of the main topics of this mess, such as realistic timelines for the return of music events, what artists are up to during quarantine, effects on the supply chains that support the industry, how the music industry has rebounded in the past, and the future of nightclubs. Please keep in mind that the information presented only scratches the surface of the reality facing the music business. Hopefully this upcoming string of articles will be of use to your comprehension of this worldwide crisis.
Starting with General Facts and Numbers
During these crazy times, to say that the global music industry has been turned upside down is still an understatement. Unfortunately, the music business has taken a hit like never before and unless there is a sudden a major change in the course of this virus; it is only going to get worse. Though this might sound depressing, keep in mind that this crisis will also drastically change the way we consume music and that might not be such a bad thing (on the long run at least…). Before addressing these changes, let’s look at the numbers. In 2019, the global music industry was worth over $50 billion according to the World Economic Forum. Half of that total revenue comes from the live music scene alone. With a lasting ban on large-scale gatherings makes the concert business almost worthless. In the case of EDM specifically, the International Music Summit (IMS) reported that even though the global value of the electronic music industry grew 2% in 2019, the estimated total value of the industry is expected to fall 56% from $7.2 billion to $3.3 billion by the end of 2020. Though some small events, such as car raves and social distancing concerts have popped up across the board, it still only represents a very small fraction of the overall live music industry. The IMS has even stated that the club/festival alternatives are unlikely to see long lasting commercial success. With no large scale live events and limited alternative live music experiences, advertising and sponsorship deals, a core part of what makes music festivals and more a reality, is also seeing their share of troubles. According to the Interactive Advertising Bureau, a quarter of advertisers and sponsors have halted completely their advertising efforts while another 46% have reduced spending in the first half of 2020. Adding to this, a 6 month closure of live music has estimated to cost the industry $10 billion in sponsorship deals, the
IEG reports. The main revenue for music artists in the 21st century has come mainly from touring so with no shows and no advertising; artist revenue has also seen a significant decrease. Analysts at IMS have announced that DJ and artist income could fall 61% from $1.1 billion in 2019 to $0.4 billion in 2020. There is a bright side though. Even if this situation seems dire, some sectors have seen much growth. Live streams have been a sort of savior for music fans around the world. When no live performances are available, fans turn to the web for their fix of live music. Reports from the IMS show that 70% of the most watched music channels on Twitch were EDM focused, totaling at about 6 million viewing hours. The same analysis shows that DJs who performed a live set on Fortnite has increased their Instagram follower growth by ten folds during and after their event. Streaming is undoubtedly a promising medium for the future of the music industry though it is only expected to generate about $0.1 billion in 2020. This year is going to be a very hard year for the music industry but it is to be expected in a situation like this. Coming back from these losses will be a long and hard road but one thing that is for sure is that music will never die.
Most ravers around Canada and the world are for sure wondering when the next concert will happen. The answer to that question is unfortunately more complicated than simply assuming that concerts will return as they were on a future date. In the next article, we will be discussing what a realistic timeline for the return of live music event really looks like.
