An industry on pause: the pandemic’s effect on the music business

When doors closed and fear rose in March of 2020, the pandemics effects on the music industry were felt immediately. Streaming overall declined by 10% in April, a drop from 18.3 billion streams to 16.6 billion streams in the US, and physical recorded albums sales plummeted, declining 20.3% in the first half of 2020. Though audio consumption has since largely recovered, other more detrimental impacts on the industry persist.

Horace Trubridge, General Secretary of the Musicians Union, said, ”Music is one of the few certainties we can rely on to provide happiness and relief in tumultuous times. But musicians – whether they work in theatre, teaching, orchestras or gig-playing – will feel the full financial force of this global disaster.”

In a time when the world arguably needs music the most, artists have been forced to find new ways to share their creations, and concert venues have worked tirelessly to avoid permanent closure, some unfortunately succumbing to that fate. It will be a slow road to recovery for an industry that, like many other service markets, has been largely upturned by COVID-19.

Album Releases

Scheduling conflicts have been a major issue. Though some artists have taken advantage of the downtime — Taylor Swift produced her highly-regarded folklore and its sister album, evermore, in the span of a few months — the debut of Weezers Van Weezer has been delayed almost a year to May 7, 2021. OneRepublics Human is now slotted for a March release, and the timing for Adeles fourth studio album remains uncertain.

The inability to sell physical album copies and plan tours is at the root of many of these changes. Releasing an album during the pandemic means counting on royalties from streaming, which are trivial compared to other revenue streams.

“[For] a lot of us artists, you make your album sales either through touring or through signing the album,” said violinist Lindsey Stirling. “The only reason someones gonna buy that CD is if they just really want to support the artists and they want to have that physical thing. Usually that comes from if its signed, or if they were excited at the show and got the energy and excitement and bought it because they wanted to take something home.”

Live Music

Live music has arguably seen the greatest negative impact from the pandemic, since touring is the primary revenue stream for many artists. Several decades ago, record sales were the biggest money maker, but now music streaming, which is widely available and much less profitable, has forced artists to turn to live music as a way to earn revenue. In 2018, touring comprised 90% of Garth Brooksrevenue, and 96% of U2s. Concert ticket prices also reflect this trend; Led Zeppelin sold tickets at $10 each in 1977. Now, scoring a ticket to a concert of the same magnitude would likely cost upwards of $100. This makes COVID especially damaging to the industry.

During the pandemic, concert revenues have dipped to unprecedented lows as venues are forced to shut their doors. Live Nation, one of the largest names in the concert business, has seen an astonishing 95% drop in revenues in 2020, from $3.2 billion to $155 million. Even so, Live Nation has used some of its remaining funds to create a relief program called Crew Nation for the employees who have lost their jobs in the pandemic. The company contributed an initial $10 million and has since matched millions in donations given by artists and fans.

Even further devastated by the pandemic are the independent music venues. Without the support of a larger parent organization, small theaters, cafes, and music halls are struggling to stay afloat. One such venue is Caffé Lena in Saratoga Springs, the oldest running coffee house in the United States.

“It was very disheartening to lose one by one the entire spring, then summer, then fall schedule of concerts that had been carefully and lovingly booked over the course of more than a year,” said Director Sarah Craig of Caffé Lena. “At first we just postponed shows, and then re-postponed, and then finally gave up on them.”

Fortunately, some relief has come to independent venues since the start of the pandemic. In late December, Congress passed a large relief bill for independent entertainment venues affected by the pandemic. The Save our Stages act brought $15 billion in relief funding to these venues, as part of the $900 billion stimulus bill.

A Changing Industry

Even through the devastation caused by COVID-19, the music industry has stayed true to itself in one major way: creativity. Artists and venue owners have found innovative ways to boost revenues such as live broadcasting of virtual concerts, streaming on more profitable platforms, and even turning to vinyl, which has seen an uptick in popularity in recent years.

Moving forward, the industry is expected to see some lingering impacts from the pandemic.The Internet will continue to drive more of the industry, as more stars take to social media to promote and display their content. The fan experience may change as well – reports estimate that large concerts may not return to pre-COVID attendance levels for some time, and fansdisposable income has decreased, meaning less money for concert tickets. The virtual live experience may stick around for some time, bringing more privacy and comfort to the “live” music listening experience.

COVID-19 or not, music is core to our societys culture, entertainment, and overall joy. Heres hoping were back in a stadium screaming to Taylor Swift songs again soon.

MegBauer Profile
Megan Bauer
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Meg Bauer is a recent graduate of the University of Michigan Ross School of Business with a major in marketing. She currently works for a market research consulting firm in Michigan but has always had a passion for writing. Meg is especially interested in the topics of healthcare, environmental sustainability, and mental health awareness. In her free time, Meg enjoys yoga, playing guitar, and finding new recipes to try.

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