After the Coachella Valley Music and Arts Festival was postponed and South by Southwest canceled, the concert industry — which is an all-important source of income for artists in the streaming era — is reckoning with what could be still more damaging consequences of the coronavirus, from jettisoned superstar tours to lost wages for crew members, merchandise sellers and others who depend on live music.
As the virus spreads, concert promoters and artists’ managers are contemplating a difficult year that could be full of postponements and cancellations — and with that, the potential for millions or even billions of dollars in lost income.
“It’s already devastated touring,” said Allen Kovac, manager of Mötley Crüe, which is set to begin a stadium tour in June. “You have people delaying on-sales for tours, and you have people who are going to postpone tours. It’s chaotic and stressful, from agents and managers to artists, their families and their support teams.”
The concert industry has grown steadily over the last two decades to become a primary source of income for many artists — a position that has become only more pronounced in the age of streaming.
According to a report last year by PricewaterhouseCoopers, the global market for ticket sales and sponsorship for live music was predicted to reach $29 billion in 2020; according to industry practice, the majority of ticket sales go to the performing artists.
By comparison, the global market in recorded music was recently estimated to have around $22 billion in sales, with artists’ royalties typically representing a much smaller proportion of the profits.
Some leaders in the industry have seen Coachella’s decision to postpone its event — rather than cancel outright — as a promising sign that brought out a spirit of mutual cooperation throughout the business.
Some festivals are now negotiating with municipalities to adjust permits and other agreements to allow spring and summer events to take place later in the year.
“This is a unique time,” said Michael Rapino, chief executive of Live Nation Entertainment, the biggest concert and ticketing company in the world. “Everyone has to figure out how the show goes on, and how it goes on smartly and safely.”
The stock market has not been as sanguine. On March 11, Live Nation’s shares fell 16.6% as foreboding news continued to build over the coronavirus.
One consideration is insurance coverage. Some policies cover cancellations, but not typically those caused by ccommunicable disease.