The hidden crisis in the music industry

Fabian venue foto
Photo: Fabian Holt

While the music industry celebrates growth in the concert and festival business, this very growth creates a new challenge to the “eco system” of the music industry as a whole. This happens at a time when the recording industry has left much of the work in talent development and marketing to the live sector.

The music business has always been a source of juicy behind-the-scenes stories, but it has never attracted more attention than after the crisis in the record business began in the late 1990s. Thousands of articles have been written about the death of the record industry. By contrast, the growth in the live sector is commonly described as a story of success. Yet, one of the biggest challenges to the music industry – and to the ecologies of musical life more generally – is a new and more narrow commercial exploitation of live music.

A study of the European situation
In an international study of mid-sized music venues in eight cities, from Barcelona to Stockholm, ISE researcher Fabian Holt analyzes the history and evolution of these venues and their small-scale urban markets for live music. In this analysis, a thought-provoking future scenario has emerged that led Fabian to write an article for the Danish newspaper Berlingske Tidende and subsequently share some of the information via this blog post.

The study finds that the venues and their markets have grown, but that they are encountering new challenges because the economic growth in the concert business stimulates a more narrow commercial focus among new companies in the field. The consequence is that the type of venue that had a cultural rationale and for this reason maintains a small space at the 300- or 500-capacity are in the process of being replaced by ‘concert hotels’ that only present the most popular music and do not have such small performance spaces.

This development weakens the ecosystem of musical life at a time when the ecosystem is already weak and small venues serve as the one of the few remaining professional platforms for supporting artistic creativity and not just growing talent. This role of the music venues has become more important, since the record companies have far less resources for talent development than they used to. The record companies have left a vacuum.

Structural changes in the live sector
The key to understanding the current changes is the evolution in the live sector of the music industry. The venue organizations are part of this sector and operate under its structural conditions.

The structural dimension helps predict that the new and more commercial “concert hotels” will drain the resources of the conventional venues with a more distinct cultural rationale. Musicians, audiences, and professional workers will migrate to the concert hotels. Local music environments that produce artistic engagement and critical publics will be replaced by the most popular entertainment in consumer spaces framed by corporate brands. Today, sponsorships already constitute 30 % of the global concert business economy. Sponsorship is one of the important revenue streams for promoters and concert agencies.

But does venues with a cultural rationale have a future, and how is policy-making in the area responding to the new challenges? Small venues that grow talent are vital to the ecology of the music industry and musical life more generally. The weakening of the ecology can already be seen in how music scenes are moving out of city centers and dissolving in the process, so the urban popular music experience is transformed from neighborhood communities and scenes into professional mid-size venues and a small-scale concert industry, as Fabian has argued in his research on New York. Another consequence is that festival stages increasingly present bands with less professional experience than before. This scenario should be thought-provoking to audiences, politicians, and music professionals.

Fabian’s article in Berlingske Tidende can be read in Danish here.