How Does Live Music Impact the Music Industry Financially?

Live music has long been an important part of the global music industry. This is especially true for professionals working in the live entertainment sector, such as touring musicians, booking agents, venue directors, talent buyers, sound engineers, tour managers and promoters. The recorded music industry has seen a decade and a half of sharp revenue decline, but thankfully showed actual revenue growth in 2016 due in large part to the rise and recent dominance of streaming services. But throughout this period of industry turbulence, live music has continued to grow steadily, now representing more industry revenue than downloads, CD sales and streaming services combined.

Live music is integral to the music industry. But who benefits from this important revenue source, and how can these professionals best capitalize on it during the modern digital age? The Frost School of Music's online Master of Arts in Arts Presenting and Live Entertainment Management (AP Live) is devoted to the intensive study of this important aspect of the music industry. Taught by experienced professionals, coursework focuses on best practices and specifics of the many careers in live music, allowing degree candidates to explore possibilities in the expansive field.

How Does Live Music Industry Revenue Compare to Recorded Music?

Recent data and projections for the next few years have shown an upturn in music industry revenue as a whole for the first time since the advent of digital downloads. Much of this increase has come from rapid growth in streaming services revenue. But revenue from live performances and tours has been consistently growing for years now.

According to Midia Research, the live music industry accounted for 33 percent of overall industry revenue in 2000, compared to 53 percent attributed to retail recorded music. By 2016 that number shifted dramatically — live music garnering 43 percent as opposed to recorded music's dwindling 38 percent. Moreover, Midia reported that 59 percent of an artist's annual revenue came from live performances, compared to 9 percent in music sales. The effects of this shift can be seen in most artists and bands turning to concert tours as their primary source of income. Where performances were once a vehicle for increasing record sales, they are now a driving force for the music industry as a whole, providing substantial income for artists and entertainment industry professionals alike.

How Can Live Music Professionals Capitalize on the Rise of Streaming Services?

Subscription- and ad-based audio and video streaming services like Spotify, Pandora and YouTube have become a major force in the music industry. Revenue from streaming has recently eclipsed that of downloads and sales. Growth in the music industry as a whole is credited to the development and proliferation of audio and video streaming. Of course, this is generally seen as a positive trend for the industry and promising of continued future growth.

Unfortunately, these services are also notorious for paying out relatively paltry sums to artists, publishers and labels, depending on licensing agreements and the like. As the market share of technology companies behind streaming services grows dramatically, revenue from sales and audio consumption for other industry sectors drops.

But the digital age of streaming services and social media has also evened out the playing field for artists at all levels. Relatively unknown bands can now access immediate exposure to millions of potential fans, a luxury once held only by stars on major labels with widespread distribution. Although artists may not make the majority of their money from these outlets, exposure can generate popularity, buzz and loyal fans. In turn, this can drive up attendance at live shows and substantially increase income for artists and other industry professionals.

The Role of Live Music in Driving Sales and Supporting Various Sectors of the Music Industry

Another important aspect of live music is its potential for driving up record and merchandise sales along with overall revenue for artists and other music-related businesses. Eventbrite's 2015 Music Discovery Report found that fans who purchase tickets for concerts spend four times more on CDs and downloads than others. Even more astounding, these concertgoers spend 20 times more than the average person on music as a whole (physical and digital sales, paid subscription services, concerts, merchandise, etc.).

So who does live music benefit financially? Shows and the loyal (and high-spending) fans they create generate revenue for nearly every facet of the music industry. The artist benefits from every revenue stream associated with live music, but so do countless other entities. Labels, distributors and streaming services earn revenue from increased sales and subscriptions. Managers and booking agents earn percentages of concert revenue. Venue personnel, promoters and arts presenters rely on concerts for their income. Publishers and producers make money through public performance royalties. The list goes on and on.

Clearly, live music is essential to the financial health and viability of the music industry as a whole, as well as being a driving force in its recent and future growth. Frost's AP Live program offers students the opportunity to focus specifically on how music-related businesses and professionals across the industry can capitalize on live music. With this education, degree candidates can develop the knowledge, skills and experience necessary to be effective in the potentially lucrative live music industry.

Learn more about Frost's online M.A. in Arts Presenting and Live Entertainment Management.


Eventbrite: The Future of Live Music

Billboard: Concerts and Festivals Create Passionate Fans (Who Spend), Says Study

Eventbrite: From Stream to Ticket: Mapping the Value of Music Discovery Where Does Music Industry Revenue Come From in 2016?

Pollstar Pro: 2016 Year End Special Features

ILMC: About the Live Music Industry

The Wall Street Journal: Music Industry Sees Growth in Concert Revenue

Statista: Live Music Industry Revenue in the United States from 2012 to 2021, by Source (in Billion U.S. Dollars)

Music Industry Blog: Do Not Assume We Have Arrived at Our Destination

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