Stadium shows in the age of mechanical reproduction

If you've had a discussion with anyone about the state of the music industry over the past decade, it probably started with a lamentation about the relative collapse of record sales, before ending on the optimistic note of “well, at least live music is going gangbusters”.

You had this conversation because it's true. While recorded music revenues still linger in both real and nominal terms below 1999's highs, shrinking artists' income from their imprinted art, live music has been a boon for those willing to dare the stage.

Want hard numbers? Here's a chart from Citi last year showing the various sources of artist's income since 1986:

Similarly, those businesses who provide the infrastructure for live music, from ticketing to promotion, such as NYSE-listed Live Nation, have been coining it. In the past decade, its ebitda has grown from $149m to $914m.

And here's the share price chart for the Beverly Hills business, just to underline the point:

So the live music market is booming. But a recent report by Zach Fuller of MIDiA Research on the business got us thinking about a topic we tackled a few weeks back: namely, “the death of cultural transmission”.

This is the idea that the traditional mechanisms for music passing from generation to generation have been disrupted by the twin forces of on-demand media and handheld devices. If a child is never forced to listen to The Beatles as a youngster — say, by an older sibling — then will they ever become the dependable listener so vital to making those artist's intellectual property valuable as an asset?

Fuller's report also highlights similar risks from new technologies, and the types of music consumption they foster, to the blockbuster stadium tour.

Let's start with the high-rolling acts at the moment. In 2018, according to Billboard, the Top 25 tours worldwide grossed a shade over $3bn, with ginger-bard Ed Sheeran topping the list with $429m.

Here's the list in full:

That is a 12.3 per cent increase from 2017, when the Top 25 tours pulled in $2.7bn, with tax-efficient U2 on top that year:

If you know anything about any of these acts, and we assume our culturally-informed readers do, you'll note two related facts about them compared to what's currently topping the charts: they're relatively old and, in terms of genre, radically different.

To ward off accusations of ageism, we spent a few hours comparing the ages of Top 2018's big-ticket sellers versus 2018's Spotify success stories. The gap is telling: 21 years separate the top-selling live acts, such as oh-no-they're-not-going-on-tour-again-are-they specialists The Rolling Stones, and Spotify's whippersnappers, whose average age is 30.

In terms of genre discrepancy, the gap is just as large. While 48 per cent of Spotify's Top 25 are of the ubiquitous yet vague “R'n'B/ Hip-Hop” parish, only 12 per cent of performers are. Perhaps more tellingly, the most popular genre among concert-goers after pop is rock — a genre, which for the best part of the decade, seems to have lost almost total relevance.

As Fuller notes, part of this gap can be explained by time: there's a lag between mainstream popularity and being in that small group of artists successful enough to sell out a stadium-sized venue. Therefore not only do touring artists tend to be older, but they also are from genres which held sway a generation, or three, ago.

But whether the mechanisms for translating a career of chart-topping to an string of arena shows will be viable in the future seems less clear, for a number of reasons.

Consider who is buying tickets to the Rolling Stones, Ed Sheeran and Elton John at the moment. Hint: it's not the younger fans, even if they're the ones going. In a pattern similar to some of dynamics playing out across the real estate sector of globalist metropolitan hubs, it's often the older generations subsidising the young.

Particularly, as it turns out, in developed nations, where spending power per capita is largely concentrated. From Fuller:

Whether it's daughters taking mothers to Ed Sheeran or mothers taking daughters to Sir Elton, there's seemingly only one generation rich enough to regularly splurge $100+ on tickets. This won't be much of a surprise.

However, just think about the genre representation Spotify's Top 25, who are yet to make the big time. Most would agree that hip-hop does not translate well to large stadium audiences, particularly absent intensive theatrics, such as a 50 foot volcano. Part of this is a function of content: hip-hop relies heavily on production and is therefore tricky to perform within a stadium environment. This is one of the reasons, along with poor amplifier technology, that The Beatles stopped touring. (Although Alphaville would still like to see Revolution No. 9 performed live.)

But it's also a function of career path. While today's septuagenarian rock bands had to cut their teeth for years playing live in pubs and clubs, it's now possible to rise to prominence as an artist without ever playing a show. Burial, the south London-based dubstep producer, did just this at the tail-end of the noughties. There are exceptions: Ed Sheeran earned his reputation off the back of circling the UK on the gruelling open mic night scene, which makes him far more comfortable on stage than most young artists.

This is driven as much by incentives as by experience — and not just because streaming is beginning to offer established acts guaranteed cash flows, but because there's money to be made from a wide range of other activities, such as songwriting, social media influencing and advertising. As one example, in 2018 Post Malone, a 23 year-old hip hop artist, started his label, film production studio and landed an advertising campaign with Bud Light. Why bother touring when money is available from so many other sources? It's safe to say that most of these income streams aren't available to bands like the Eagles, who earned $2.7m per show in 2018.

Then there's of course the larger question of how concert-going habits will be shaped by streaming itself, which is the main subject of Fuller's note. It is reasonable to suggest that the concert, in its current form, was informed by the old, long-player format of recorded music. Audiences would sit down and listen to an album at home and, perhaps every other year, go to a show with roughly the same 90-minute format.

As we argued last year, the MP3 tore the first half of this relationship apart. Consumers, no longer shackled by the constraints of physical formats, were able to pick apart a record as they pleased. Spotify and its streaming rivals, with their relentless focus on playlists, ossified this damage. The filter through to the concert-experience is unclear for the moment, but the implications are clear. Here's Fuller's analysis (with our emphasis):

Listeners are less likely to invest in individual artists for an extended period of time, a trend caused by the increased choice among consumers that both downloads and streaming have facilitated. While festivals serve this audience better than individual shows, it could be argued that in the coming years, extended sets by a particular artist make less sense to someone who only streams a few songs by an individual act. The festivalgoer’s desire for shorter sets may conflict with the artist's desire for a longer show given the fee they are being paid. The current live show format of long performance sets looks divorced from consumers’ listening habits. Live venues are already preparing for this postconcert future, which bears greater resemblance to the variety act format so popular in Britain up until the early 60s when the advent of rock gave rise to the traditional concert format.

Some of this variety-act format can already be seen today. Mumford & Sons, one of the only rock bands from the post-MP3 era to make it to mega-stardom, have regularly curated tours which feature multiple acts playing over a single day.

The accessibility of recorded music may also effect what music audiences want to see. Before the MP3, it was pretty much impossible to develop an interest in a non-mainstream genre without access to a specialist record store. Large audiences, therefore, gravitated towards a small number of acts who garnered extensive media coverage. Sales of tickets to arena concerts were in part fuelled by this dynamic.

Streaming has flipped this on its head. The problem now isn't obtaining music, but choosing what to listen to. It's not great for the indecisive, but for those who want to develop a taste in the esoteric, it's ideal. Want to get into free-jazz? No problem, here's Anthony Braxton's entire oeuvre.

We asked an organiser of one of the UK's jazz festivals, who wished to remain unnamed, whether he thought streaming had helped the six-year old festival grow. He told us that while it wasn't the main driver, “streaming had boosted interest in the festival” as audiences grew receptive to music outside of the pop canon.

Dispersion in taste, genre and age doesn't make a difference to streaming services. They're agnostic, supposedly, about what's hot and what's not.

But it does matter to the various intermediaries — promoters, ticketing companies and venue owners — whose income is linked to the idea of the arena concert being a perpetual winner. With the pipeline of future stars seemingly thinner than it's ever been, it might be time to prepare for a downturn, perhaps by diversifying. The problem is, there are only so many ATP Finals to go around.

Related Links:
The death of cultural transmission - FT Alphaville
The death of cultural transmission, an update
- FT Alphaville

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