The recorded music industry is vastly aware of the challenges posed by the digitisation of music, but how often does it consider the benefits that can be drawn from the live industry? FastForward recently presented a panel discussion focusing on the synergies between live and recorded music. Prior to the event, many may have thought of the two as separate entities, with recorded music experiencing over a decade of declining revenue whilst live music experienced a consistent increase in revenue. However, the topic was explored well enough by experts from both the recorded and live industries to reveal there is more than meets the eye.
Challenge the status quo: recorded music revenue is no longer in decline
As highlighted by Chris Carey, Founder and CEO of Media Insight Consulting and FastForward, “despite the perception that artists make money through live music, the recorded industry brought in $15 billion in 2015. This marks the first period of growth in 20 years, showing that the recorded music sector still has a significant role to play in an artist’s revenue portfolio.”
Live music is not the turbo revenue machine it seems
Resulting from the widespread perception of recorded music revenues being in decline, many have turned to the live industry as the answer. Streaming may not be enough to secure commitment from fans in the long run, but is live music more capable than recorded when it comes to achieving such things on it’s own? Whilst it may be easy to presume live revenue has been increasing in conjunction with decreasing recorded revenue, the live industry has in fact suffered a decline in ticket revenue for the first time in a long while.
According to PRS for Music’s Economic Insight, live ticket sales fell from £956.9m to £843.5m between 2009 and 2010. Claire Mas, Head of Digital at Communion Music reinforces the realistic standpoint that live industry revenue is not as glittering as it seems; “it’s a myth that bands make all their money on the road these days. Unless you’re touring venues of 2,000 capacity, you’re hoping to simply break even. This, of course, varies between singer songwriters and 5 piece bands”. Matt Hanner, Booking Agent at CODA Agency, reinforces this view: “Touring incessantly isn’t necessary today; in fact, it’s costly.”
Can digital bridge the gap?
With streaming services dominating fan base listening, there must be a way to meet in the middle. Spotify has nearly 100 million active users, Apple Music has more than 13 million and is on track for 20 million by the end of 2016, whilst the recently launched Soundcloud Go has an estimated 175 million monthly listeners. Streaming may be less likely than live music to engage fans at an optimum level for the long term, but it can most definitely help to bridge the gap between live and recorded music.
Sam Briggs, Director of Business Development at Songkick commented, “the main principle behind closing the gap between live and recorded music is to integrate music services. This can be achieved by doing things such as advertising concert tickets on streaming platforms. Adopting a holistic approach such as this enables increased fan engagement by captivating and utilizing opportunities on recorded music platforms to drive traffic to live music.”
How much of an impact can marketing have?
With the rise of video in digital marketing, joint messaging across both live and recorded has the potential go even further. Facebook has recently launched canvas and carousel adverts, the former of which allows a neat yet completely immersive advert bringing together video, pictures, text and links. Mas states “carousel and canvas adverts are the cheapest thing on the market at the moment; they allow you to seamlessly integrate records and live messaging in a powerful way, yet not many people are using them. Labels and agents are missing a trick if they fail to collaborate by creating joint messaging and instead choose to bid one another up.”
If you’re going to market and sell either live or recorded music, reviewing and understanding your data is another task on the hit list. Briggs reinforces that “everyone wants data; artists are ravenous for it. Yet very few people know what to do with it, how to dissect it or use it effectively to drive long term engagement.”
Hanner adds that “the deeper you dive into the fan base community the more you realise the heights of its value. Engagement between live, recorded and the community is expected to become more symbiotic.”
What options are left?
One technique used to bridge the gap between live and recorded music is to employ a ‘bundling’ strategy by grouping related products for sale. The label might dress up a ticket with products to ensure recorded music gets into as many tickets as possible. Mas determines “success rates of bundling will depend on how it’s approached; if you sell through a faceless ticketing platform it will appear as a redundant upsell to the fan, but if it’s done through an artist’s website the bundle carries more relevance.”
Whether bundling can have long-term success with marrying recorded and live is another question. The time frame for which you can package a ticket with a deluxe album is a lot shorter than the time frame for which you can package a deluxe album with a t-shirt. Briggs points out that “the bundle has to have respect for the value of both the album and the tour without forcing too much upon the fan too soon. At Songkick we often let the fan buy what they want first, then offer the add-ons later down the line.” Identifying great examples already employing effective bundling strategies, Briggs references the recent approach by British alternative rock group, The 1975: “Bundling was done extremely well by The 1975 when they guaranteed 4 tickets to their 2016 tour if the fan pre-ordered their album. This was a very clever way of getting fans to engage with the value of both the album and the tour distinctly, rather than forcing the tour together.”
The power of collaboration
Whether it’s bundling, marketing, or digital techniques that encourage closure of the gap between live and recorded music, it’s evident that humans must work collaboratively to establish an effective loop. That means labels talking to agents and agents talking to labels. It also means going back to basics with communications and leveraging the network which already exists between fans and their own communities. In summation of the panel discussion hosted by FastForward, Carey identified how powerful the two industry sectors can be: “opportunities created through synergy have the potential to encourage sustainable business models for the future of all music industry sectors.”