In this recap of a recent music business panel featuring industry heavy hitters, we look at the tenuous future of independent venues in the wake of COVID-19 and what the music business’s ‘new normal’ will look like.
Guest post by Amanda Montgomery, Associate at CAD Management
Last week, Fast FWD brought together an incredible panel of industry leaders to speak on the future of independent venues which featured industry executives such as Jon Ostrow, CRO of Bandsintown; Steven Matrick, Head of Talent and Programing for Lola NYC; Justin Kantor, Co-Founder | Managing Member (Le) Poisson Rouge and Patrick Wilson, Artist Relations Chair at NIVA – National Independent Venue Association. This panel explored how venues will have to adjust in the midst of a global pandemic and economic recession.
Here are some highlights from the discussion. Check out the full panel below: https://www.youtube.com/watch?v=4Ye2LhqH0TE
90% Of Independent Venues Might Go Out Of Business Post COVID-19
The National Independent Venue Association includes nearly 2,000 independent venues and promoters across the country. In a recent survey of NIVA members, 90% of venues reported that they will go out of business without government funding. Justin Kantor, a Managing Member of (Le) Poisson Rouge and Vice President of NIVA, states that a 5% deviation can be applied across the board. “The problem is venues do not have money coming in, a majority of their staff is furloughed, and the primary financial burden is the rent or mortgage,” Kantor goes on to say. With Pollstar estimating a $9 billion loss in ticket sales if venues remain closed through 2020, venues will be unable to financially sustain themselves.
“I’m putting together an impact fund via VenuePilot as a way to give cash advances to venues offset by future ticket sales at a very low-interest rate” Kantor adds, stating that venues receiving funds is often a challenge due to venues being for profit. He calls on streaming companies, labels, and other private sector businesses to band together to create new liquidity solutions, stating that independent venues incubate all of their talents. Patrick Wilson, Artist Relations Chair at NIVA, mirrors that thought, stating that venues are the lifeblood of the touring market for these multinational companies. Without indiependent venues, “the entire tour industry goes down.”
NIVA Is Lobbying Senators And Congresspeople For Legislation To Support Independent Venues
As more businesses open and the economy starts to improve, there will be less of a focus and incentive for government bodies to give relief. Patrick Wilson, Artist Relations Chair at NIVA, states that their primary mission is gaining federal assistance for independent music venues and promoters. Their recent Artists’ Letter To Congress, which includes signatures from artists such as Billie Eilish, Lady Gaga, Billy Joel, and the Foo Fighters, urges Congress to pass federal legislation to #SaveOurStages.
Justin Kantor mirrors that thought, stating that the independent venue and promoter community has a powerful voice, with their last campaign surpassing 500,000 letters to representatives. Kantor states that we must keep this issue at the forefront of our legislators’ minds.
Steven Matrick, Head of Talent and Programming for Lola NYC, adds that our current administration is very unfriendly to artists, urging everyone to vote in November for an artist-friendly administration.
There Is No Standardization On Copyright And Royalties Within Live Streaming Yet
Jon Ostrow, CRO of Bandsintown, is working with Twitch for Monday – Friday streams. “When we started looking at different platforms and creating a distribution strategy for our content, it became very clear that there is no standardization on how copyright, rights management, and paying performance royalties out is being handled.” He adds that a larger aspect of the risk comes specifically from sync, stating that we must make sure artists and rights holders are being paid correctly. Justin Kantor mirrors that thought, adding that you need PRO protection for live streams. “If you record it, do replays, and archive it, then it’s a whole other can of worms.”
With Business Plans Changing to Combat New Realities, Industry Professionals Must Lead With Transparency
A leaked memo from Live Nation reveals that the company will dramatically reduce performing artist payouts, expected to drop 20% from 2020 rates. Justin Kantor, a Managing Member of (Le) Poisson Rouge, responds to this, stating that the most important thing is for agents, artists, and venues to share their challenges openly. “We are in this together”, Kantor states, “deals are going to have to look different because the pot of money we’re working with has shrunk.” He goes on to say that no venue operator wants to screw over an artist, so if it is a transparent conversation, it will be positive. “It’s an opportunity for a reset in the industry for more transparency between the artist, fans, venues, and stakeholders,” Kantor states, adding that diversity is also an issue within our industry that he hopes will change, calling for more diverse panels and venue operators.
The Time To Monetize Is Now; Venues Will Move To A Hybrid Model Between Live and Digital, Using Live Streams As An Additional Source Of Revenue
Bandsintown has seen 31,000 live streaming events added to its platform from just under 11,000 artists since the end of March.
With everyone jumping on the live streaming bandwagon, companies now more than ever are getting behind artists to monetize. “I think where you’ll see more revenue is engagement focused sponsorships, VIP experiences, and merch” Jon Ostrow, CRO of Bandsintown states, adding that advertising revenue is probably not the best format to monetize. Ostrow continues on to say that creators are leveraging tipping to monetize an event rather than hard ticket sales. “The fact that live streaming has been a free thing forever, it makes sense for fans to pay whatever they want rather than paying a hard set amount.”
As events start to come back, venues will be able to leverage live streaming as a revenue stream long term. Steven Matrick, Head of Talent and Programming for Lola NYC, states that many venues will be setting up permanent cameras to live stream, however, the issue is if people will want to pay, or how much. Justin Kantor, a Managing Member of (Le) Poisson Rouge, adds that LPR has been exploring live streaming for quite some time. He states that there will be the opportunity to live stream as an alternative revenue source going forward. “It can be one piece of many that will be an additional revenue stream. I don’t think it is practical to think it’ll become a primary revenue stream.”
The Emergence Of New Features Such As Geofencing and Meet and Greets Will Make Live Streams More Engaging
Jon Ostrow, CRO of Bandsintown, states that geofencing an event to specific locations essentially sets up a digital tour. This allows for Bandsintown to promote events to fans in specific locations. Since the panel, Bandsintown has already partnered with Suicide Silence and the world’s biggest independent heavy metal label Nuclear Blast to power a groundbreaking virtual world tour for 39 specially selected cities around the world. Bandsintown was able to keep the shows geofenced for ticketed fans.
Patrick Wilson also brought attention to the comedy world, stating that this industry needs to be in front of an audience. “We’ll start to see more comedians going into rooms with super low capacity and then adding a digital aspect, or a digital meet and greet to get more money.” Low capacities in comedy call for an audience to get the laugh but not enough people to make money off of it. Wilson then adds that companies such as Looped act as virtual venues, allowing creators to sell GA and VIP tickets. Steven Matrick, Head of Talent and Programming for Lola NYC, adds that he uses StreamYard for The New Colossus Festival, where the live streams also interview bands so viewers gain knowledge about the songs. Patrick also adds that the platform is multiscreen and can edit the show as it is going on.