Boom-Clap: Live Music's Riddle Unravelled

Sean Adams

Sean Adams

— 10 min read
Boom-Clap: Live Music's Riddle Unravelled
Photo by Sisi / Unsplash

Or why Live Nation's record profits amid venue closures is a head-scratcher. And what you can do to help...

Bit of a different newsletter this week. There's a buried crisis in live music and I wanted to share some of the data and quotes that I found when researching an essay about the importance of grassroots music. This will run alongside my take on the Oasis surge ticketing debacle, which will soon be sent to supporters of this newsletter (upgrade your account here).

Firstly, you've probably heard the good news about the live music industry booming. At the very top end this is true. Especially if you're Live Nation, the owners of Ticketmaster:

It’s become a familiar headline — “Live Nation Reports Record Quarter or Year” — and in the first fourth of 2024, the world’s largest live entertainment company did it again: Compared with the first quarter of last year, revenue was up 21% to $3.8 billion with an operating loss of $37 million; adjusted operating income was up 15% to $367 million; attendance was up 21% to 23 million fans; food and beverage spending at its venues was up 10% in U.S. theaters and clubs; 77 million fee-bearing tickets sold; and sponsorship revenue was up 24%.
Live Nation Reports Biggest-Ever First Quarter With $3.8 Billion, on Track for ‘Record 2024’
With a Justice Department investigation looming, Live Nation reported its biggest-ever first quarter with $3.8 billion in revenue.
VarietyJem Aswad

In fact, the music industry is doing so well that even Goldman Sachs publishes annual reports on it:

With the live music industry having outperformed expectations in 2023, this year’s edition of Goldman Sachs’ (GS) influential Music In The Air report outlines an improved growth outlook driven by strong demand and supply. The investment bank estimates that the industry grew 25% year-on-year in 2023, well ahead of its 6% forecast.

These numbers are in stark contrast to the ongoing struggles below the surface of the stadium and arena circuit.

Whilst I have watched plenty of noisy post-rockers playing in their weird time signatures in my days. I've seen plenty of future pop icons, including Adele and Charli XCX, perform in grassroots venues and if these venues close, where will the seeds of stardom germinate from? And will all the weird and wonderful music we love have anywhere to exist?

Two live music spaces are lost in the UK every week

Earlier this year, The Music Venue Trust's (MVT) annual report, stated that:

  • In 2023, 125 UK venues stopped offering live music. More than half of these venues shut down completely.
  • This means an average of two live music spaces in the UK closed every week in 2023.
  • Of the 366 small music venues Ed Sheeran played while learning his trade, at least 150 are now closed.
  • Another 72 of these Grassroots Music Venues (GMVs) that he played significantly reduced or ended their live music offer in 2023.
  • 38% of GMVs in the UK made a loss in the last 12 months. That's over a third of the remaining UK grassroots music venues currently operating at a loss.
  • The sector operated on a 0.5% profit margin overall.
  • Grassroots venues contribute over £500m to the economy and the industry employs almost 30,000 people.

This decline left only 835 grassroots music venues remaining in the UK by the end of 2023. Here's the areas of the country where they closed (source: NowThen):

It's not just live music being impacted. It's clubs in the UK too. In the first quarter of 2024:

Many of spaces have multiple uses for communities.

Blackwood Miners' Institute which is threatened with closure. Not only is it where a young Nicky Wire and his brother hung out, but it’s where Coldplay's promoter got his start in music. What potential futures are erased if this venue goes?

According to UK government figures, grassroots venues are part of a thriving UK creative sector. More than one in eight UK businesses are part of the creative industries, according to 2019 figures (notably the year before Covid struck). The creative sector accounted for £115.9 billion - almost 6% of the UK’s entire economy - in the same year. That's more than the aerospace, automotive and life sciences industries combined.

At the top-end, the live music industry made $18.76 billion (£14.97 billion) in revenue in 2023 - up a whopping 39% from 2022. 

This is part of a wider trend that reflects boom times in the wider music industry, where the annual International Federation of the Phonographic Industry (or IFPI for short) report shows the music industry had a 10.2% revenue growth in 2023, that's a yuge $28.6 billion in total recorded music revenue.

Is All The Money In Festivals Then?

Paying to see a buffet of live music for hundreds of pounds has taken money out of the live music economy during a cost of living crisis would only make sense if UK festivals weren't also in crisis.

The Association of Independent festivals revealed alongside their 5% for festivals campaign that:

  • 192 UK festivals have disappeared since 2019.
  • In August they confirmed that 60 UK festivals have now announced a postponement, cancellation or complete closure in 2024.
  • Without intervention, it’s expected that the UK will see over 100 festivals disappear in 2024 due to the pressures of unpredictable and rising costs.

AIF CEO John Rostron said:

“The number of festivals forced to cancel, postpone or shut down entirely in 2024, largely because of unpredictable costs and a credit crunch within the sector, shows no signs of slowing. The urgent need for government intervention through a temporary reduction in VAT on ticket sales to 5% remains. We hope that the new Labour government will take swift action to save many successful festival businesses that are facing this existential threat."

So Where's The Disconnect?

Just look at this final paragraph of this recent Guardian piece:

Live, the federation representing Britain’s live music industry, revealed that the sector’s contribution to the UK economy topped £6bn for the first time last year, as fans denied live experiences in the Covid pandemic rushed to snap up tickets.
The figure, which adds up the economic impact of more than 55,000 gigs, concerts, festivals and events, is 17% up on 2022 and 35% up on pre-pandemic 2019.
The £6.1bn is derived not only from direct ticket sales but also from spending at an event and at businesses nearby that benefited in the time period around the date it was held.
The growth in the sector last year was fuelled largely by concert revenues, which climbed 19% year on year, driven by big tours such as those by Beyoncé and Coldplay, which accounted for almost three-quarters of the total £6.1bn economic impact.

It doesn't take an economist to see that there's an issue with trickle down, which is why Coldplay's decision to donate 10% of the proceeds of their show to Music Venue Trust is such a big deal.

...the band placed a poster in the window of the Dublin Castle in Camden, London – the scene of the first ever Coldplay show, in February 1998 – revealing that 10% of the band’s proceeds from the Wembley and Hull shows will be donated to Music Venue Trust. This will help fund the Trust’s vital work supporting UK Grassroots Music Venues and upcoming artists. Donations will also be made to Music Venue Trust by the concerts’ promoters (SJM Concerts, Metropolis Music and Live Nation), the band’s booking agent (WME), the venues (Wembley Stadium and Hull Craven Park) and the official ticket agents (Ticketmaster, See Tickets and AXS).

What Can The Industry Do?

I know a lot of people who work in the industry read this newsletter, please keep in mind that anyone can take part in this initiative and have been encouraged to do so by the government to ensure they don't need to do it by force with legislation. Forward this from Mark Davyd speaking to Billboard to your teams:

“...our door is very open to anyone on this topic. I want this to become the new normal – I don’t think that’s stupidly ambitious. There are lots and lots of examples of industries – all properly functioning industries – to reinvest to get future gains. As soon as you start talking about it as an investment program into research and development, I don’t think companies should be resistant to that but should be thinking, ‘that makes perfect sense’.”

What Can Music Fans Do?

If you care about live music's survival, you could tag or comment on posts by artists announcing their tour, if they'll be supporting grassroots venues. Fan power can often sway a lot of artists and their teams.

Do you have 3 minutes? Write to your local MP (find their email by popping in your postcode here), requesting that they read and act upon the CMS Select Committee’s report into Grassroots Music Venues (the deadline for which is the end of this month!).

Music Venue Trust has more info and even has an email template you can use.

The key request from the report is a £1 levy on stadium and arena tickets. This is money that can preserve our incredible grassroots music scene. Aside from Coldplay, a few good eggs like Enter Shikari are already doing this voluntarily but the industry needs to do much more if want to secure a future for the grassroots gigs and musicians of tomorrow.

Remind your MP that with 1-2 venues closing every week in the UK, we need this and also a fan-led review of live music urgently.

In the words of Gwen Stefani, what you waiting for???

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FURTHER EXPLORATION

Read more about the government hearing in NME's summary here:

The case has been made for a £1 ticket levy on all arena gigs – for the survival of grassroots venues and artists
Artists and figures from the live music industry headed to Parliament to make the case for a mandatory £1 ticket levy on to the UK government
NMEAndrew Trendell
While a 3.5% concert ticket levy in France brings in €200 million for small venues, Mark Davyd pointed out that his organisation was not even seeking support on that scale. For just a pound on each ticket, he suggested that the available fund would enable small venues to “take risks with their programming and really give artists the first step on the ladder they need”.
“I think we have a long history of experimentation, of taking cultural risks, and of our artists being supported at the grassroots level by people who just believe in music in their communities,” Davyd told MPs.
MPs investigate grassroots venue crisis: Could a £1 levy on arena and stadium tickets be the answer?
The Culture, Media and Sport Committee of MPs held a session as part of its inquiry into the ongoing crisis for grassroots music venues. Read on for the debate between key players, including Music Venue Trust chief exec Mark Davyd and John Drury, chair at National Arenas Association and VP/GM at OVO Arena Wembley…
BrandsAndre Paine

ICYMI: I spoke to Big Issue's Laura Kelly about their Venue Watch campaign, and went into this in our conversation on the Drowned in Sound podcast. Read more about the campaign here:

At least two grassroots music venues closing each week
Shocking new figures show 2023 was the ‘worst year’ yet with 125 grassroots music venues closing and many of those left operating at a loss.
Big IssueLaura Kelly

The Guardian on 'dynamic ticketing' featuring a few words from me:

Bands urged to oppose dynamic pricing of concert tickets after Oasis ‘fiasco’
Fans who queued online for tickets to see Gallagher brothers’ shows found price had almost trebled
The GuardianJosh Halliday

More on the ticket levy and the MVT annual report

Grassroots live music venues suffer ‘most challenging year’, report says
Soaring costs forced 125 venues to stop offering live music in 2023, the Music Venues Trust says.
BBC NewsAlex TaylorBBC Culture reporter

A new org to get grassroots venues active during the day - check if your local venue is doing anything like this. https://independentvenuecommunity.com/

Read more