Covid19 has had a massive effect on the music industry and its presence has impacted the entertainment industry, specifically music, in ways that we didn’t intend. With a vaccine on the way, but mass production shortages expected going into 2021 the effects of Covid19 on the music industry have effectively given way to the next era of fan interaction, album rollouts, brand partnerships, etc. Before we break it down let’s add context.
The Present Climate
By now fans know that artists are dependent on touring revenue to make a living as they typically do not own their masters and their publishing monies are only paid out at specific times of the year. More to the point, with the pandemic not allowing for groups larger than 10 to be in any one area every conceivable live event that could’ve taken place in 2020 has been effectively canceled.
The cascading effects of the pandemic have also caused Performance Rights Organizations (the organizations in charge of certain kinds of music royalties) to not payout as scheduled and to our earlier point of countrywide tours being canceled that usually means that live show deposits are refunded. Lastly, research shows that music streaming platforms took a massive hit with consumers pivoting strongly to video content which means less streaming revenue for musicians, labels, publishers, etc.
In this respect, it’s clear to see that COVID-19 has put a dent in the music industry, but moreover, it’s becoming apparent that a new era of the music industry is cropping up. And, with the touring industry incapacitated for the foreseeable future (estimates say that live events won’t return until late 2021) artists have had to find ways to make up for the revenue that they’ve lost from what is generally their biggest moneymaker. To deal with the loss. Many artists have pivoted to these avenues:
The Rise Of Live Streams
Earlier we mentioned that the livelihoods of most artists come from being on the road; It’s where they generate the most revenue upfront and unlike record sales, “show money” (at least the deposit) hits the artist’s business account immediately upon being booked for the event. Unlike regular jobs, entrepreneurs in the music world get money in lump sums. They can months without getting a sizeable check and when receive a year’s salary in a month; such is life. But more to the point, depending on the artist’s financial situation those show deposits are often used to pay off bills that have been adding up, or for purchases they’ve had in mind — much like people with regular jobs do.
With that in mind, At the beginning of the pandemic, in March, many touring musicians had to cancel tours and other engagements that guaranteed them money. Without the foresight of knowing that they’d be canceling their whole year’s revenue, it’s safe to assume that artists needed a way to make up the money lost.
As a result, a few savvy musicians pivoted to on-demand live streams. Erykah Badu, specifically, was the first to see success as she hosted a series of online ‘Quarantine Concerts’ where she subsequently charged $1 $2, and $3 apiece for entry into each show. She ultimately ran these events at a deficit and did not turn a profit but collectively the shows generated over 100,000 viewers for a gross profit of 100k — not bad for a first time offering and it shows that there could be a future in live streaming if one can keep their production costs low.
Community Building
The pandemic is showing us that the future model of a traditional music career lies not within just monetizing music, but rather through community building with marquee experiences locked behind a paywall, newsletters to keep in touch, and discord channels to connect virtually interact with fans.
Because of the pandemic, Fans are now seeing some of their favorite musicians move into other forms of media as they try to find a way to cope with the losses of their revenue from touring and album sales. This includes some of our favorites launching OnlyFans accounts, starting podcasts, and hosting exclusive events for super fans all to generate their influence in a way that allows them to generate revenue overall.
Moreover, musicians are now moving in mass to platforms like discord and Twitch, where they’re able to interact with their fans in realtime. The rise of producer discords has become a hot topic as of late with producers like Monte Booker, and Kenny Beats becoming discord regulars who invite other industry producers online to talk about everything from beats to life, and in these close-knit online communities producers cannot only interact with their favorites industry leader, they are also able to rally behind other members of the group to get them things like gear to help push their endeavors further along.
From an interaction standpoint, this climate closely mirrors the best of the early 2000s where AOL, MySpace, and Tumblr reigned supreme; this is a model heavily dependent on exclusive fan experiences, community building, and creating a cult-like following; The best part is that artists are seeing some stability in what has now become an uncertain future.
Brand Partnerships
Brands are feeling the economic effects of the pandemic just as much as the entertainment industry and they’ve had to find new ways of staying relevant in the minds of consumers who are risk-averse and avoiding in-store visits over safety concerns. Their main concern as its always been is brand awareness i.e. getting in front of potential consumers and convincing them to buy.
Since this is essentially the lifeblood of most musicians it creates a unique situation for brands who are ready to invest in the right artist. We’ve recently seen that as McDonald’s jumped at the chance to work with Travis Scott on a campaign dubbed ‘The Travis Scott Meal’ which generated a ton of PR for the company and we’re sure stores received a spike in traffic with Travis fans hoping to try the Cactus Jack Burger.
While partnerships like this aren’t out of the norm, they are becoming more of the standard; Consider that brands going forward will likely have to reallocate budgets that had been planned out months in advance because they can no longer rely on events, and they have to be ever vigilant of another spike in COVID cases until the country gets a mass-produced vaccine. Again, with this being the climate for the foreseeable future, there’s a huge opportunity for brand/artist partnerships to become as standards as deluxe edition albums and merch bundles.
In essence, one could suggest that the music industry is being forced into a renaissance of sorts where artists are becoming more innovative to survive, brands are putting more resources behind acts that have the power to keep them relevant, and community is key to both parties’ survival. And while the present circumstances are somewhat dire, the future on the horizon seems promising.Â
-Snobhop