Live & Touring

Live Music Today: The Good, The Bad And The Ugly

1In this piece Joe Rinaldi reflects on the state of the live music industry, and how the rise of the streaming age and the drop off in retail sales has further increased the necessity of live performance for artists looking to make it in the music industry.



Guest post by Joe Rinaldi, Managing Partner at San Diego’s Music Box

In recent years, live music has become the backbone of the industry, replacing much of the revenue that was once earned primarily through record sales. Since the debut of popular music streaming platforms, consumers transitioned from purchasing full albums to finding their favorite individual songs and listening to them via a streaming platform.

Spotify’s average payout to musicians ranges anywhere between $0.006 and $0.0084 per stream, leading to the vast majority of streaming revenue going to the world’s most famous artists. In fact, just one percent of artists earn a massive 77 percent of recorded music income, leaving independent musicians with limited resources to thrive in the vast and highly-competitive market.

Without the help of earnings from record sales, most artists today depend heavily on the revenue brought in through live performances, a space which seems to be doing well on the surface. According to PwC’s annual global entertainment and media outlook, live events make up the majority of the revenue in the music industry, accounting for 43 percent of all revenue, with streaming coming in second at 18 percent.

3While the outlook for live music looks strong, the reality is that independent artists, who make up 90 percent of the industry, play only a minimal role in this calculated growth and music festivals are one of the main reasons. As a result, live music has morphed into a multi-level business. Also, ticket giants generally focus on large venues, leaving small and mid-sized venues to independent musicians.

In order to be successful, independent musicians must not only understand the challenges in the live music industry, but also the importance of showing their versatility in a market that favors those at the very top. The following is a deeper dive into some of the current challenges plaguing independent artists in the live music scene and the organizations working to improve their odds of success.

A Fragmented Booking Experience

To discover new talent and book artists, talent seekers often must go through the outdated process of dealing with a middleman, in many cases a booking agent, which is costly and inefficient. For others, the process of discovery involves sorting through an inbox of emails from bands and referrals.

However, Los Angeles-based startup Gigmor, hatched from the mind of independent artist and ex-AOL executive David Baird, is making strides towards improving this arduous process. Its recently-launched online platform connects independent musicians and bands with venues, event planners and others looking to book talent.  

Making an investment to perform live music is essential for artists to receive credibility from consumers. Whether it’s selling music at a show, gaining publicity or a crucial supporting act appearance, music requires live show discovery, making it essential for artists to find ways to be recognized by larger audiences.

Music Festivals: The Fine Print

There is no doubt that when up-and-coming artists are selected to participate in festivals, they stand to gain greater exposure by performing in front of large audiences. However, festivals all too often place tricky restrictions on artists such as radius clauses. These restrictions can often extend past a 300-mile radius and last anywhere from a few weeks to six months before and after a festival performance. These regulations put a serious dent in the earning potential for artists as they sideline them from being able to play anywhere else in the region for an extended period.

Many independent promoters and artists are taking to the media to shine a spotlight on the issue of radius clauses. In 2010, the Illinois Attorney General was compelled to open an investigation into Lollapalooza and the legality of the festival’s use of radius clauses. Nothing ever came of the latter, and as of yet, no solution exists. The issue is likely to continue to be hotly contested, especially as fewer companies take on more ownership of every aspect of the live music experience.

The Power of a Personal Connection

2With the prevalence of platforms such as Spotify and SoundCloud, music fans are continually discovering new artists and music. For this reason, it is becoming more critical than ever for artists to establish a genuine presence on these platforms. This can be accomplished through many methods, most importantly live performances and social media. Generally speaking, an 80/20 split of efforts between the two, respectively, is most effective for establishing and nurturing personal connections with fans that can translate into increased revenue. There are many great tools and resources available to artists and venues to help effectively build and maintain social media relationships, many of which are free or available for a minimal fee. Some of the most popular include Hootsuite and Sendible, which provide users with a dashboard to manage their social media accounts and boost productivity.

To better promote live music, artists must build a genuine rapport with their fans, even if it’s non-verbal. If an artist is identified by their followers as an anti-corporate punk rocker, does it make sense to for them play a corporate holiday party? Another good approach for artists is to personalize their message when announcing or promoting a gig. Audience members pay hard-earned money to see live music and knowing that the experience was also memorable to the artist goes a long way in repeating business.

From Personal Connections to Ticket Sales

For artists, the ability to maintain a personal connection with an audience is extremely vital, but establishing an artist-fan relationship is only the beginning. To most effectively leverage these connections, independent artists must be fluent in social media promotion and have a working understanding of how to activate their virtual following enough to convert the relationship into live event attendance.

Take after Chance The Rapper, an independent artist whose most recent album, Coloring Book, was the first ever streaming-only album to win a Grammy. He is known for his ability to connect with his fans, even utilizing word-of-mouth marketing to encourage his cult following to plaster posters of his album across their hometowns. Following Chance’s example, the more personal the marketing strategy, the better the promotion and the more fans artists can expect at their next show.

Ticketing Challenges

The saturation of advertising channels and the lack of singular web-based engines to direct music fans to concerts (like Fandango does for movies), makes it a challenge to promote shows to fans. Music fans today have endless options when it comes to choosing a concert to attend. According to Songkick, up to 40 percent of concert tickets go unsold due to the fact that many fans never learn of certain concerts.

To help spread the news about an upcoming show, there are many kinds of marketing tactics that can be implemented from engaging a social media following to old-school word-of-mouth techniques. For example, venues can get fans talking by offering discounted ticket prices. One benefit of reducing ticket prices for shows that are not likely to sell out is luring a more diverse audience that is motivated by a lower admission price to check out new bands or genres.

It is easy for music industry professionals to assume that small live music performances are being cannibalized by mega-corporations. However, small concerts give fans a uniquely intimate experience with an artist in a way that festivals are unable. To encourage concert attendance in the constantly-changing live music landscape, small venues and independent artists alike must understand what advantages they have that set them apart and how to tap into a demographic market that is willing to venture beyond big-name headliners and multi-day concert festivals.

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  1. What can be done to improve the payouts to musicians based on streaming then?
    This has to be addressed also…There are lots of musicians who can’t tour, or whose music is not settable for a live format, or who have health or other reasons that mean they can’t tour, etc…If there is demand for their music, they should get paid right for it

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