In 2005, live was considered the golden goose of the music sector, all hopes were invested in the small venues and festivals, while pundits and executives preached it to be the future; the alternative to the sinking and piracy-ridden recording industry. By 2010, hopes were still up, but there were many issues to be faced: rising booking fees, rising ticket prices, and a slew of cancelled or underperforming concerts and festivals. Nonetheless, income from live was the primary reason (along merchandising) artists resorted to 360 degree deals.
How do things stack up in recent years? Festivals continue to be cancelled especially smaller, regional ones, small venues are continuously fighting the red tape, (though some progress has been made in early 2013). Madonna exited the Live Nation agreement (one of the first and most discussed 360 deals) and signed a three-album contract with a traditional record label Universal Music which is not to say all 360 deals are crumbling, but there is something to be understood about the artists this type of agreement works for and its reinforcement of the idea that a one size fits all" solution is probably impossible to find for the music industry.
All in all, the 2011 UK's PRS report Adding Up the Music Industry" shows the live sector in decline for the first time in recent history" from £1.59bn ($2.51bn) to £1.48bn ($2.34bn), a 6.8% fall. The downward trend is blamed on the decrease in stadium tours, arguably caused by the lack of 'giant' acts (like the Rolling Stones, Take That, or Coldplay) touring and downsizing of medium-major artists and bands gigs. Although statistically it might be correct, I believe this approach is slightly simplistic. The way PRS is formulating the issue, it almost sounds like it was bad luck" that it happened that no major artist toured intensively in 2010. Had this been the only issue, it's hard to believe there was no such similar year in recent history.
Overall, risk adversity has increased due to the recession and, most probably a long-term analysis of previous under-selling gigs. This development might also be related to the age of the superstars: according to a Pollstar analysis of the top grossing live acts in the US in 2011, 40% of them were over 60, 19% over 50, 35% over 40, leaving a tiny 6% to the 30 year-olds.
Moving forward, the trend continues if we look at overall gross incomes: some of the profitable music brands are related to artists who have passed away: Elvis, John Lennon, Michael Jackson which brings me to the analysis of a curious phenomenon catching roots in 2012: holograms. But these virtual appearances aren't the only way technology influences the live sector and I will look at some trends below.
The Tides of New Fan Experience
Technology has already dramatically changed the live experience: from pre-purchase to attendance and post-event enjoyment. From the moment of deciding what gigs to attend and keeping abreast with the multitude of offerings, any smartphone user can install Songkick the app that scans the users' music library and automatically tracks" their favorite artists in any given location. Thus, push notifications and emails are sent to users, alerting them to imminent tours and gigs, and offering them links to buy tickets. Songkick can be synced with Facebook and each user will have a gigography" based on past and future attended concerts. As seen, previously, social media plays a big part in fan self-expression and interaction with the artist or other fans.
Next, from purchase to the door: new technologies like the RFID bracelets allow users to pay for tickets and other goods easier, therefore, it is predictable that consumers will spend more because of these facilities. These technologies are currently powered by brands, like Samsung which is a sign of where sponsorship in music might head. Maybe in the future the bracelets or chips could be connected directly to the phone, where users could be taken to a custom mobile store where songs could be purchased, along a free virtual flyer of the gig, perhaps with the setlist included. The idea of having mobile sites, created around live events is not new companies like Gigaboxx used specialize in them but they seem to have ceased activity. Their biggest challenge was that they relied too heavily on QR codes and text messages to be accessed which made the implementation clunky, and which arguably stopped it from spreading like wildfire. Another possible development could see the QR codes replaced with a more effective alternative. Technologies like First Enswers (who rely on video scanning and thus threaten not only QR codes, but also Shazam) prove this might be a way.
At the venue, technology will help make the crowd a deeper part of the experience, influencing the long-term attachment or love story" with the band, which, in turn, will arguably translate to further ticket, record or merchandise purchases. Pepsi recently ran an experiment (as part of a bigger music strategy): tweet to influence the playlist in order to make fans feel they are playing an active role in the artist's set, and, by extension, part of the band's family." Even more apps are lined up to change the live scene: InConcert Ampd takes Pepsi's idea even further, by its capacity to allow fans to vote on which song the band should play next; answer quiz questions; hold their phones up to display custom animations that play at exactly the right time (an artist could turn one side of the venue blue and the other red, and so on); and of course let people buy the currently-playing song." Fans could also inform the band on how they're feeling, via biofeedback," pioneered at the 2012 SXSW music conference, which saw devices tracking skin moisture, heart-rate and other indicators to show movement and dance in the room. Statistics back this trend again: a study undertaken by Live Nation shows that consumers tend to be highly engaged on their mobile devices during shows. Live event mobile users also tend to be on the younger side and have smaller incomes, but are said to be spending more frequently and making more purchases."
To sum up, technology helps the live industry by increasing audience development (through enhanced discovery), diversifying the means of engagement with participating fans and building loyalty, but also by driving additional revenues through simplifying ticket, merch, and even music purchase processes.
Florence + The Machine and Live Streams
There are two events that qualify this particular artist as a noteworthy case study. First, the live streaming of her sold-out launch gig for Ceremonials in October 2011. According to LoveLive, the company that produced the streaming (along with a similar experiment for PJ Harvey, both being commissioned by Universal Music), the concert was made available via the artists' official websites and embedded on Facebook and The Guardian. Pay-per-view streaming is very rare in music, but fans paid an encouraging £3.99 ($6.30) to see Florence + The Machine perform. In addition to a unique access code to the stream, fans were engaged in a live chat platform and got downloadable souvenir programs. The show moved from online to TV, with Channel 4 receiving rights to broadcast at a later date, along exclusive interviews and backstage material. Although final stats are not disclosed, LoveLive boasts exceptional viewing figures," significant conversation amongst social communities and worldwide reach."
There are a few conclusions to be drawn: the first and most obvious being that video and live streaming are growing (backed by stats*). Moreover, true fans are ready to pay premium prices for exclusive streams £3.99 ($6.30) for an hour or two is enormous compared to a £10 ($10) month for unlimited music on Spotify and Rdio; or the average £7.99 ($9.99) for an album that you get to keep, not rent." Although digital growth is spectacular, TV (and mainstream media, by extension) is not dead not by far. While online remains the primary medium to engage core fans, that are closely connected to the artist; traditional media is the one getting the wider reach. That's why this event, along backstage footage and additional content have been later broadcasted on UK's Channel 4.
Furthermore, we live in an era of impatience, of an increasingly shorter attention span: long gone are the times when (average) fans watched shows transfixed, they now fidget and need interaction, live chats, Facebook shares, Twitter hashtags and creating a conversation around the event they are watching. These aspects seem to have been understood by HP, when they sponsored the live streaming of Florence's concert at The Royal Albert Hall. Not only did they encourage social media involvement and word-of-mouth, but they offered eight possible angles to stream the concert from fans could opt between a panoramic view, or a zoom on a corner of the orchestra or Florence herself and could switch between angles at any time. This is not a viable solution for shorter videos, but there are early signs of a solution: 360° videos. Some of the artists who have used this technology are Professor Green and Will.I.Am. Both these projects are sponsored by Doritos and Intel respectively.
Of all the examples shown above, sponsors come across as heavily involved in video. Music partnership professionals see it not only as a cost-efficient, but also a very effective tool of fan engagement. An interesting development is VEVO's Unstaged series, sponsored by American Express streaming concerts from the likes of Usher, Jack White and Coldplay. They're not the only ones doing it: Deezer recently streamed a live gig of French band The Shoes from the Roxy Pro festival in Biarritz in five countries and has expressed the desire to continue with similar projects. One avenue that has only recently started to be explored but might soon be a wider viable solution is the use of shoppable videos.
In a nutshell, live streaming is becoming more predominant and new ways of monetization are emerging. It can be sold as a premium product for artists with loyal fan-bases or sponsored by commercial brands, for whom it's proving to be a versatile consumer engagement tool. Also live streaming could easily become part of Kickstarter/ Pledge Music packages being not only a unique gift to offer, but also an easily multipliable asset, unlike any other physical product.
Holograms: Creepy or Innovative Resurrection?
Going further into the virtual world, a new, slightly morbid trend has emerged with the 2012 Coachella festival that saw rapper Tupac Shakur resurrected in the shape of a hologram, playing" an entire track with Snoop Dogg and Dr. Dre. The media and fans were in frenzy: who else should they resurrect? How would a festival line-up made up entirely of holograms look like? Amy Winehouse's father entertained the idea of creating an Amy hologram: It depends on what Amy's fans want as a way to keep her memory alive. If it's a book, an album or a hologram, then so be it." Less than a few months after the shocking Tupac hologram, people already start to talk about this technology as something they could use casually, like a book" or an album." Moreover, the rumor mill suggests prime-time TV talent show the X Factor plans to feature their contestants dueting with appearances" of Michael Jackson and Elvis Presley.
The creator of the Coachella marvel says he doesn't believe holograms will ever replace live gigs, while also pointing this could be compared to the theatre versus the cinema. And indeed, on some occasions theatre, ballet or opera is streamed live in cinemas in cities where there is no theatre or where particular shows would be too expensive to tour: UK chain Odeon is proving this field is quite lucrative, streaming a broad pallet of events from sports to gigs to ballet or opera.
Holograms don't need to replace the live experience, but they can surely branch it into a new source of income. Given how fast the trend has spread, the technology is most probably fairly affordable (I am not discounting this despite the fact that Digital Domain, Tupac's hologram makers have filed for bankruptcy). And although statistics show the most popular or highest earning artists are either old or deceased, there are also plenty of major, alive, extremely popular acts who might embrace this technology. I predict once the resurrection mania is over, holograms will move to multiplying" live gigs, enabling 3D streaming in new locations. Picture the following scenarios: stadium acts like Will.I.Am, Jay-Z, Deadmau5 organize the biggest party on Earth" (or the UK): they will play live in one secret location and via holograms in the others. No one knows where they will be for real. Will people pay tickets knowing they might not see the real deal? I think yes. Plus, with the reduced costs of the artists not having to travel, be accommodated and paid large amounts of money for each individual gig, ticket prices can be dramatically lowered. Again, this does not mean live touring is replaced it's just an alternative. Or, on the other hand, imagine something special like Elbow's St. Paul's Cathedral (London) gig replicated in other intimate venues across the country or the world. Could it be almost as good being there for real? It remains to be seen if experiments are ever carried out.
Casandra Govor is a Marketing Associate at INgrooves, a digital media distribution and technology company.
* The 2012 IFPI paper reports a increasing trend in video consumption, highlighting the record held by Justin Bieber, whose video was watched over two billion times on YouTube. Premium platform VEVO has attracted over 550 advertisers and has delivered more than $100 million in royalties to rights holders in 2011 (via ads and commercial brands sponsoring original programming), a mere two years after launch.
Disclaimer: This is piece is largely adapted from my dissertation New Artist Marketing and Revenue Streams in the Commercial Music Industry (Aug. 2012) for my MA degree at Goldsmiths, University of London. Huge thanks to Denzil Thomas, Head of Music at Billington Cartmell for a long and enlightening talk about music and brand partnerships and the uses of video in this field.