(Hypebot) — Concert attendance grew 20% last year, and if you read the headlines, the entire US and global live music business is booming. Taylor Swift, Beyonce, Live Nation, Ticketmaster, and more are breaking revenue and ticket sales records.
Independent live music venues and the artists that perform in them are in crisis. The UK lost 125 smaller music venues last year, and Australia lost 1,300 or one-third of its small and mid-sized music venues since the start of the COVID pandemic.
While no firm numbers exist for the US, dozens of venues, independent promoters, and agents tell Hypebot that a similar crisis is imminent.
How did live music venues become so unprofitable?
Running a venue has never been easy, but it became particularly difficult post-pandemic. Rents rose, the cost of goods and services skyrocketed, and a competitive job market with rising minimum wages pushed labor costs higher. Touring musicians are also facing many of these same economic pressures.
Some would-be concert-goers also learned how to be happy staying home during the pandemic, and once reliable income from bar sales is under threat, with younger generations drinking less than their predecessors.
Back in Australia, attendance at small-to-medium-sized music venues has fallen 60%, patrons are drinking 70% less, rent prices are up 34.7%, and insurance premiums jumped up to 500%.
In the UK, demand for tickets remains strong, but the Music Venue Trust’s annual report showed that 38% of smaller music venues posted a financial loss. Countrywide grassroots UK venues operate at a tiny 0.5% profit margin, hardly enough to survive even the smallest bump in the road.
A Victim Of Live Nation’s Success
Another major economic pressure is the success and rising ticket prices at the top of the live music ecosystem.
“When someone pays $250 – $500 to see a shed, arena or stadium show, it’s 10 to 20 less $25 tickets they can afford at their local music club,” said one independent venue operator echoing the sentiment of dozens of others. “With Live Nation, AEG, and ticket resellers sucking every dollar they can out of the top end of the market, you find yourself trying to survive on scraps and that’s just not sustainable.”
The Solution?
In the US, the National Independent Venue Association (NIVA) is helping its members with collective buying discounts and funding options. But another more radical solution is under serious consideration in the UK, which would use the success at the top to help those further down the ecosystem survive.
According to the proposal, £1 / $1.26 USD would be added to every ticket sold to an arena or stadium concert to create a fund to help smaller venues. Who should pay – fans, major artists, or the venues themselves – is under debate.
One UK band has already embraced this approach.
UK rockers Enter Shikari donated £1 from every ticket sold to their recent OVO Arena Wembley show to support struggling venues. So far, no other major musicians matched their pledge.
Bruce Houghton is the Founder and Editor of Hypebot, a Senior Advisor at Bandsintown, President of the Skyline Artists Agency, and a Berklee College Of Music professor.
