Streaming is considered to be the savior of the music business, but what really saved it — until recently, anyway — was concerts.
Yes, the meteoric rise of legal streaming services during the 2010s provided a way for artists to earn some money from recorded music — after years of making nothing due to illegal downloading. But much more, it succeeded because artists came to accept that the small amount of money that most musicians now make from recorded music was a fair exchange — a loss leader as it were, for drawing audiences to the place they really make their living: concerts, where people not only buy tickets but merchandise and much more, and support not only the musicians but the entire ecosystem around live entertainment.
The 21st century live-music business was a financial juggernaut, spawning many tours that grossed in the hundreds of millions of dollars; according to concert industry trade publication Pollstar, its top 100 tours of 2019 raked in $5.5 billion in ticket sales alone.
As has been well documented, that business was laid flat in a matter of days by the coronavirus, and it’s unclear when it will begin to recover. Even the most optimistic predictions don’t foresee any concerts returning until late this year at the very soonest, and realistically, it will be at least 18 to 24 months before arena-sized concert crowds gather — if anyone can find an arena’s worth of people who dare.
“It was a worst-case scenario come to life,” one concert-business insider says, “but it really showed how vulnerable that business model is.”
So where does that leave the live-music industry? Like so much else in life, it’s coming to us through screens for the foreseeable future — and livestreaming and pay-per-view, which were previously ancillary business in the live-music ecosystem, are now basically the only ones. Fortunately, both formats are well established in terms of infrastructure: 458,000 people tuned in to the YouTube livestream of Beyonce’s epochal “Homecoming” concert at the 2018 Coachella festival (and 1.1 million when it streamed a year later on Netflix); some 400,000 people paid between $20 and just over $100 for livestreams or pay-per-view of the Grateful Dead’s series of “Fare Thee Well” concerts in 2015.
Of course, those concerts took place in a different world. And although artists like Erykah Badu (who started her own livestreaming business) and Travis Scott (who “performed” on the videogame Fortnite last week) are pushing the creative boundaries of online performances, the virtual concert as a business model is very much a work in progress.
But big plans are afoot as multiple companies work feverishly to find ways not only to improve livestreamed concerts creatively, but also as a business that can support as much of the existing live-entertainment ecosystem as possible — and sources say the early results of those efforts are right around the corner. Everyone Variety spoke with for this article mentioned or alluded to projects in the works — ranging from literal pay-per-view tours (that are “geo-blocked,” or limited to a specific area) to a plan to stream concerts into venues — that they “can’t talk about just yet,” but are coming within months if not weeks.
“Live music is going to come back, but it’s going to come back in a different way and in smaller situations,” says Deborah Mannis-Gardner of DMG Clearances, a specialist in music rights whose skills have been in high demand as the industry navigates the legalities of the new reality (and who is on the ground floor of many upcoming projects). While a venue in Arkansas is experimenting with a socially distanced, 20% capacity Travis McCready concert later this month, “The [current industry] thinking is that there probably aren’t going to be any big concerts in 2020, and when things begin to open up in 2021, venues will only be at 25 to 50% capacity. A livestream can’t recreate the environment of a concert, but we’re gonna have to get over that. It won’t be the way it was: maybe it’s 20 of your friends at your home, watching the show on a screen.”
It’s easy to consider that scenario and think of the Beyonce or Grateful Dead broadcasts (pay-per-view concerts are common party events in the jam-band world), but both were unique, elaborate and state of the art shows with formidable songlists and musicianship. While major acts along the lines of a Rolling Stones, U2 or Lady Gaga could do something similar in the new reality — albeit without a substantial live audience — it’s not a workable model to save the concert industry.
While she is prohibited from revealing details, Mannis-Gardner says she is working with companies that are “in the process of coming up with a game plan on how we can keep concerts going in a unique fashion” — one possible conclusion from the few details she did provide could be pay-per-view concerts streamed from a performance area into a separate, socially distanced venue, possibly with food, drinks, merch and the usual concert amenities. For fans, this would still feel like a night out (at least a bit), and would help to sustain venues and the ecosystem around them.
“How do we keep the music and the revenue flowing and keep all of these jobs filled — the lighting, the sound, the dancers, the food industry?,” she says. “Everything is going to be looked at differently, so we have to stop being negative and think outside the box.”
Another company that has found itself in high demand in recent weeks is Nugs.net, probably the largest music-based livestream company, which was founded by Brad Serling in 1993 initially as a way to share his Grateful Dead and Phish tapes with other fans. It grew from a fan site to a professional download service in 2002, and has since expanded from its jam-band base into a major provider of pay-per-view concerts, livestreams and other professional live recordings for Bruce Springsteen, Pearl Jam, Metallica — “We’ve done 687 Metallica shows since 2004,” Serling says — Wilco and many others.
Not surprisingly, the company has been “busier than we’ve ever been” over the past eight weeks, he says. The concert drought, bolstered by Nugs.net’s free trial period and free broadcasts on YouTube and Facebook, has brought in substantial new business. “Traffic is up by 670%, we have more active 30-day trials than ever before, and our conversion rate [from free to paid users] is up to 54%,” he says. “Obviously, the pay-per-view business has dropped off,” because there have been no major new concerts to broadcast, “but that’s compensated by increased subscription revenue — which we’d rather have anyway, because it’s recurring revenue.”
The company initially handled the shutdown of the touring industry by delving into its archive of previously recorded concerts. “We had been getting audio from 10 to 15 or even 25 new shows a night,” he says. “But when everything went into lockdown, first Pearl Jam called, then Metallica, then Phish, and everybody had same question: ‘Our tour is postponed, what do we do?’ My first instinct was to start streaming archived shows every night: We started with ‘Metallica Mondays,’ then ‘Dinner and a Movie With Phish’ on Tuesdays, and Saturday nights with the Dead, so we’ve event-ized these live broadcasts,” drawing viewers “across six digits.”
Mannis-Gardner is another proponent of the business potential in archived concerts. “I tell all of my clients that if they’ve got [concerts or other music content] that they didn’t do anything with because they needed to clear the music, clear it now and get it out there,” she says. “I’m sure Netflix and Amazon and Hulu are dying for content right now, and people want it.”
But archived concerts only go so far — and unlike Springsteen, Pearl Jam or the improvisation-happy jam bands that Nugs.net specializes in, most artists play basically the same set every night, and performing that set once and livestreaming it across the globe is hardly a workable business model.
One possible solution? Geo-fencing, the practice that limits a livestream to a certain geographic area. It is usually deployed for licensing reasons — say, if a broadcaster has the rights for a performance only in certain territories — but also could be used to increase exclusivity.
“We’re looking at virtual tours, where an artist would follow the dates they would be playing [on a traditional tour] and geo-fence the stream in those markets,” Serling says, agreeing (when asked) that the practice could be deployed for, say, a 35-date, geo-fenced, pay-per-view tour.
“We are in active discussions to do that, although none of them have been announced,” he says, adding, “It could be as early as next week, we’re in the contracting stage on a couple of them.”
Although such a concept is only going to work for established artists, Serling notes the remarkable success his company and others have seen with recent pay-per-view concerts by certain lesser-known artists.
“What’s been amazing to see is a bluegrass artist like Billy Strings do 7,000 pay-per-view [sales] a couple of weeks ago from his living room,” Serling says. “I don’t know if he’s ever sold 7,000 tickets [for a single show before]! We’ve done a couple of guerilla-style pay-per-views, and we’ll be moving into more professionally produced ones.”
In fact, Nugs.net has cameras and equipment installed at eight major venues in the U.S., including New York’s Sony Music Hall and the Fillmore in San Francisco, that can be activated with the flip of a switch, and the company can ship equipment virtually anywhere a gig could be played. Once the venues are determined to be safe for artists to perform with a small crew, the company plans to broadcast concerts from them, albeit without an audience.
“The next phase is an artist or a full band, with full production, at a classic venue like the Fillmore or Tipitina’s in New Orleans or places where we are teed up and ready to go the minute we can get in. But,” he notes, “we’re going to follow the artists’ lead on this and go wherever they feel comfortable going, and we’ll bring in as small a crew as possible — or maybe no crew at all, and their own crew films the show and we set them up to stream to us. We’ve been doing that for years.”
Of course, the concert itself is just one monetization opportunity. Ari Evans, founder of Maestro, an interactive livestream outfit that worked with Badu on her first two broadcasts as well as Deadmau5, Tiesto and others, is among the companies that have already begun to unpack the possibilities of the new reality.
“The way we look at it, the artist is not on the platform — the artist is the platform,” he says. “We try to tell them, ‘Stop thinking of all your audience as the same person: We need to create different experiences for different types of fans.”
That logic can be as simple as applying the same model for a livestream that companies do for traditional live events. “You start with the basic livestream — maybe that’s free or cheap, $3, $5, $10 — and that, along with merch sales, is your main monetization method. But then,” he continues, “you can also have unique experiences for smaller segments of the fan base: private meet-and-greets, or maybe after the big show you have an exclusive [second, different livestreamed concert], cap it at 100 people and charge $100 or $500 per ticket. Then you’re making really meaningful revenue — maybe more than you made on the big show.
“You’re going after the ‘whales,’ the superfans that have higher willingness to pay for private, intimate, scarce events — you could limit the number of tickets and auction them off, you don’t even have to set a price. This is something we do at physical events all the time: there’s VIP, there’s bottle service, you can keep getting the next bracelet up,” he concludes. “Why aren’t we doing that in streaming?”
Of course, performances are just one potential revenue stream, and the virtual merch table is only the beginning.
“If the artist has a fashion line or cosmetics line, you can do an exclusive drop of some product during your stream, and market the fact that it’s the only place fans can get it — if Rihanna did that, it would be hysteria,” Evans says. “Or, there’s another company that’s pressing livestreams to vinyl — that’s a small audience but a high price, like $40 each, but it’s a way to think about the different segments of your audience.”
And even that is potentially just the beginning. “The gaming business has done such a good job of giving people cosmetics that display their fandom: premium e-notes or a premium sticker or a badge next to your name,” he continues. “If you look at Asian streaming platforms, virtual gifs are the dominant form of revenue, and they charge anywhere from a dollar to thousands. Travis Scott’s Fortnite [appearance] was monetized with skins that made fans look and dance like him.”
The scenarios described above — from acoustic-guitar-and-iphone livestreams to multitudes of virtual Travis Scotts — are the closest most music fans, whether whales or minnows, will get to a real concert for many months to come. Even smaller-scale shows, with a socially distanced audience of a few dozen or a couple hundred people, are probably several months away — and that’s for those who manage to weather the financial pandemic.
“I don’t think people in the U.S. are ready to think about returning to concerts — they’re thinking about how they’re going to pay their bills, and people will be scared to [gather] for a while,” Mannis-Gardner says. “But what we can do is advise clients to get set up and start reaching out, so that when it’s time to flip the switch, we can.
“This digital age is the Wild West,” she concludes. “But we can understand it, get things in place and take advantage of the fact that we’ve got the technology to track what’s legit and what isn’t. If we all work together, we can make this happen.”