Live Nation’s Concert Revenue Plummeted 84.5% in 2020
The final numbers are in for concert behemoth Live Nation’s 2020 fiscal year, and it will surprise absolutely no one to learn that the company took a massive hit: overall concert revenue plummeted 84.5% year over year from 2019, from $9.43 billion to $1.46 billion.
While the above figure represents total concert revenue (likely including concessions, sponsorships, in-venue advertising, etc.), ticketing on its own dropped from $1.54 billion to $188.4 (88%) in the same period, while sponsorship and advertising slunk from $590.3 million to $203.7 (a slightly less dismal 65.5% dip).
Despite those grim figures, CEO Michael Rapino remains upbeat about the future of the concert industry and the company. In a statement issued to shareholders, he cited the ongoing vaccination program, pent-up demand for concerts, a surplus in consumer savings, and the company’s investment in livestreaming and other digital initiatives as reasons Live Nation is well-positioned to bounce back.
Rapino’s statement reads in full:
“Over the last year, leaders across all our business lines of concerts, ticketing and sponsorship have been analyzing ways to improve their businesses. Some of our key initiatives include: re-organizing to become more nimble while also reducing our cost structure by $200 million; Building concert streaming and direct to consumer businesses to expand our revenue streams; Advancing our technology initiatives globally while accelerating the shift to digital tickets to meet changing needs of fans, venues and artists; and reinforcing our balance sheet to endure this period, while maintaining a strong position to build our business for the future and act on opportunities as we identify them, such as our recent acquisition of the streaming platform Veeps and a continued pipeline of bolt-on acquisitions throughout the globe.
“So while this past year has been challenging for the company, our employees, fans, artists and so many others globally impacted by COVID, I have never been more excited about the opportunities in front of us.
“We continue to have a substantial tailwind in the live event industry, as consumers more than ever are looking to spend on experiences. The supply-demand fundamentals of the concerts business remain strong, with artists ready to get back on the road and fans eager to reconnect at events. All our data continues to show that there is substantial pent-up demand for concerts on the consumer demand side. The $2.4 trillion projected surplus in savings in the U.S. alone by June is a key indicator of consumer spending potential. At the same time, surveys demonstrate the high demand for concerts globally, with 95% of fans likely to attend a show when restrictions are lifted. This is proving out in fan behavior as well, with 83% of fans continuing to hold onto their tickets for rescheduled shows.
“On the artist side, there is a broad desire to get back on stage — to connect with their fans and to provide economic support to their bands, crew, and the hundreds of others employed each night putting on the show. Given the limited touring activity in 2020 and 2021, the pipeline for 2022 is much stronger than usual, with almost twice as many major touring artists on cycle in 2022 than a typical year — about 45 artists versus the usual 25. And there remains plenty of scheduling availability at arenas, amphitheaters and stadiums to accommodate these additional tours, with over two-thirds of these venues’ nights unused by sporting events or major concerts in a typical year.
“It appears that the timing to release the pent-up supply and demand is now approaching. Vaccine distribution is accelerating and declines in Covid cases throughout most of the world gives us even more confidence that a safe and meaningful return to shows will soon be possible. For both the U.S. and U.K., projections indicate that everyone who wants to get vaccinated will be able to do so by May or June, with Europe and most other markets following a few months later. Given the massive social and economic toll that the lockdown has had on the public, we believe there will be strong momentum to reopen society swiftly as soon as vaccines are readily available. And we believe outdoor activities will be the first to happen.
“So while the timing of our return to live will continue to vary across global markets, every sign points to it beginning safely in many countries sometime this summer and scaling further from there.”
Despite Rapino’s optimism, a large number of festivals and tours scheduled for summer 2021 have already been called off.
Dr. Anthony Fauci, the nation’s leading infectious disease expert, recently suggested concerts could return some time in the coming fall, saying, “If everything goes right, this is will occur some time in the fall of 2021, so that by the time we get to the early to mid-fall, you can have people feeling safe performing onstage as well as people in the audience.” He added that that very much depends on the successful rollout of the vaccine, with a 70% level of inoculation necessary to achieve the desired level of herd immunity, and that a number of safety precautions will need to be in place when concerts to do come back, including mask-wearing and possible reduced capacity limits with social distancing.