(VIP) – 2020 seems to be the beginning of a new era in the ongoing history of the music industry. There is a completely new set up and a fresh generation of mover and shakers. Many of these operate from behind the curtain, driving new deals and spinning the wheels, whilst strangely enough, not being particularly evident to the majority of those working in this business.
Nevertheless, the relevant players operate a different twist. Today`s power players are, among others investment companies such as TPG Capital (CAA), Softbank and Silver Lake (WME), Onex (ASM Global), Providence Equity (Superstruct) or Investcorp (UTA).
For the time being, these companies will act as the game changers, being financially able to compete with market leaders such as CTS Eventim or Live Nation in reference to the gradual ongoing process of the corporatization of the live music sector. This process is still in its early stages, but already highly significant for the near future of this business.
The Experience Economy
The Economist is a glossy weekly magazine for economy and politics and is responsible for the term “Experience Economy”, a new buzz word for the live entertainment business. A shiny new wording tailor-made to trigger the lust for even more investments by the financial sector.
Whilst the financial capacities are there, the question remains, what kind of investment strategies are of interest for the financial sector?
For the moment it seems that all parts of the live music business could become potential investment targets, ranging from agencies, festivals, venues or ticketing companies. Highly popular are so-called “disruptive business models “, where technology or services are changing or replacing former value chains. What might be not thinkable so far, could easily appear out of the blue, when for instance booking procedures become modernized by artificial intelligence software solutions.
Risks and Challenges
Weather, new environmental or safety regulations and changing consumer preferences could easily be identified as obvious obstacles for the live music business. As a promoter in Eastern Europe recently mentioned he counted more than twenty private jets used by artists when traveling to his festivals. Once the names of those frequent flyers become public, it may have an effect on ticket sales within those peer groups that take environmental issues more seriously than the owners of SUV`s.
“Concern is growing about the rising exposure to loudness in recreational settings such as nightclubs, discotheques, pubs, bars, cinemas, concerts, sporting events and even fitness classes, ” is an observation published in the brochure “Make Listening Safe” by the WHO (World Health Organisation). The political impact of an institutional organization by the WHO could be described as somewhat more meaningful than the combined lobby efforts by live music trade bodies.
Political challenges are still widely underestimated in the concert business. In comparison to other industries’ awareness for such matters is still very low. The need is therefore obvious, but the majority in the concert industry is still as of yet not ready for joint lobbying activities, a fact that could lead to an unexpected backlash for the still prospering live music sector.
Thinking Long Term
In an interview with Eric van Eerdenburg on ETEP.nl, the mastermind of Lowlands Festivals in the Netherlands says: “Young fans that are students or job starters just cannot afford to buy a ticket in the near future. Going to a show or festival is going to be more and more an elitist thing I fear. The business side of music runs likes a hyper-capitalistic system.”
It is a statement that hardly needs any further explanation. It speaks for itself and is, therefore, a serious wake-up call for the entire live music community to find and develop solutions that can handle this issue appropriately.
This article was written by Manfred Tari and was originally published via VIP-Booking.com