Marketing and Behaviour
The Covid-19 crisis represents an extraordinary challenge to humanity.
The astonishing projections of potential life losses, aligned with the current lack of vaccines and poor resources has left countries and governments with no choice but to impose social isolation, quarantines and lock-downs. These are decisive measures determined by the World Health Organization with the aim saving human lives, protecting health systems and avoiding an even greater disaster.
In a matter of days, humanity has drastically modified its behavior and paradigms. Universities and other organizations that for years were reluctant to adapt to the digital era have almost immediately shifted to the online environment. The lost trust and appreciation for science seems to have been restored and a genuine sense of solidarity among people can be felt.
Moreover, as the days go by and the more informed we are, a striking new reality starts to sink in: it will take a long time for life in society to go back to how it was, simply a few weeks ago.
Even when the Covid-19 is controlled, most likely the fear of new infection waves will influence governments to restrict large public gatherings. And the population will also have a very different mentality in respect to being among many others.
And what will this life change represent for the for the entertainment industry?
Well, it represents a great deal. Here, I would like to address four relevant aspects.
1. General Attendance of Live Events
In the coming months we will, hopefully, witness the first countries able to “flatten the curve” and successfully control the Corona virus. Countries such as Germany have already very low death rates due to Covid-19 and Sweden has adopted a completely different approach to social isolation (although we still lack longitudinal data to know its true effectiveness), which hopefully may present positive results.
Nevertheless, virologists in Brazil warn that the “re-opening” of society after social isolation will not be immediate. It will be a gradual and slow process in order to avoid new spreading and new waves of infection.
Thus, it is to be expected that the attendance of live events such as music concerts, games, races and more will be deeply impacted not only in the short term, but unfortunately, long term. Capacity restrictions in venues and stadiums are also to be expected.
Furthermore, there is another important element to this equation: perceived trust. Regardless of potential governmental restrictions, how will we all be when the crisis is done? Understandably so, the fear of new infections may shy some fans away from attending live events.
On the other side, the lock-downs and current social isolation may boost the desire for human contact, creating and even greater motivation to attend such events. As humans we strive for pleasure. Potentially this experience that the world is witnessing may highlight what research had shown recurrently: experiences is the form of consumption which trigger greater long-lasting happiness.
It will take some time to understand the true impact of this societal change.
2. Income of Musicians
The technological developments seen in past decades have triggered profound changes in the music industry. Since the appearance of Napster in 1999, the adoption of music streaming services have skyrocketed. In the mind of listeners, the convenience of access and storage brought by digital streaming overcame the attachment to physical records and consequently, it almost vanished the income from album sales.
Thus, musicians were left with only one main source of income: live concerts and touring.
Therefore, at this stage, it is worrisome to imagine the impact of Covid-19 to the music industry. Given the timeline predictions, it is difficult to imagine music festivals and large concerts taking place any time soon.
In fact, the lack of income due to cancellations is already hurting musicians and will most likely exacerbate a problem which was already large enough and will potentially, and hopefully, open relevant discussions in the industry. For example:
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- Is the payment model of streaming services fair to musicians? How could it be improved?
- Are there more effective solutions to connecting private companies with artists and forms of sponsorship models?
- Which innovative revenue streams solutions can we come up with?
More than ever before, musicians will require active managers and a direct collaboration with brands and organizations to support them. And also, the support from governments.
And some positive cases are already appearing. For example, in the UK, the Government has already announced that self-employed musicians can claim up to 80% of their salary. The German government has also announced it will support artists financially amid the crisis.
Finally, musicians have asked Spotify to triple payments for streaming. It seems seems a reasonable request (to say the least) and further support is expected. Other relevant example has come from Live Nation, which started a “Global Relief Fund” to support crew members.
3. Senior Fans
For this seniors, live entertainment experiences are fundamental events during the “post-retirement” life. It represents a pleasurable opportunity to break away from daily routines and, perhaps most importantly, socialize.
Senior fans make up an important share of classical market, in specific. According to a study published by Statista, 41% of global music fans of classical music are older than 55 years of age.
But unfortunately, they are the main risk group to the Covid-19 and, according to OurWorldinData, are by far the age group with greatest amount of casualties due to Covid-19.
How will this moment impact their willingness to attend live events?
The crisis will sadly take the lives of many senior fans and might leave others with a deep sense of insecurity. More than ever before, the entertainment industry will require a joint effort to support them, provide all possible support, such as medical assistance and assurances of all types that all possible measures are being taken care of.
We have to always remember: Senior fans need and deserve safe live entertainment experiences.
And the industry needs them also.
4. Arenas, Stadiums and Concert Halls
In major capitals in the world, traditional arenas and concert halls normally work with a two year schedule plan. Tours of major artists are booked well in advance, and in addition to tourism-added revenues, have profound impact on local economies.
To provide an idea of the dramatic scenario, Europe currently counts with 159 indoor arenas with capacity over 10,000 spectators. Currently, they are all closed. Moreover, tickets sales have come to an almost complete halt with no expected return. Given our current uncertainties, it is unimaginable to consider anyone planning at the moment a live event.
The chain effect of tour cancellations is tremendous. There are multiple logistics factors which, when in crisis, trigger a “domino effect”. Putting the pieces back together among ticket sellers, artists, fans, arenas and promoters will not be an easy task. The near future will witness clashes of dates, unavailability of spaces and services and an immense sense of confusion.
But as always, I firmly believe the industry will strive as it has always done.
Final Thoughts
At the moment the lights are out, there is no sound or the stages are empty. Life is much more precious and the focus is, rightly so, on saving as many people’s lives as possible. And there should be no compromise in doing so.
Everything else can wait.
And when life comes back to “normality”, I truly wonder what world it will be like. Hopefully a better one, maintaining its trust in science, keeping the generosity between people and full of music. For everyone.
This way all challenges addressed here will be, one way of another, solved. As they always are.
But for now, let us focus on what is most important: looking after our health and supporting others.
