With digital media and the rise of streaming music services, the sale of physical albums and singles has dried up. Artists now rely on making a living from live performances, but that, too, is under threat. Michael Sainsbury with the story.
Australia’s Arts Minister Tony Burke has a guitar strapped on for his Instagram profile pic. He regularly posts shots of himself at gigs and was vocal in his support of the local live music industry during his time in opposition.
But it’s the multinational music and ticketing companies that are benefitting most from these changes, not the local music industry.
In government, so far, Burke has followed through with launching the first serious national arts initiative in living memory in the shape of Revive, a national cultural policy whose centrepiece is Creative Australia, backed with $286 million. Long ignored by the government, the live music sector is about to come under the microscope, with a Federal parliamentary inquiry into “the challenges and opportunities within the Australian live music industry” finally underway.
Venues struggling
Yet for all of Burke’s good vibes – and a small slice of the new government-funded cultural pie – the local live music sector remains in trouble.
“Small venues are a crucial step in the ladder to success that is widespread enough to earn a living from having enough monthly listeners on Spotify and playing bigger venues,” Howard Adams, Chairman of the Australian Live Music Business Council (ALMBC), tells MWM.
The fallow years of COVID saw many venues close and continue to struggle, along with ill-conceived projects like Sydney’s long-standing lockout laws. Today, rising costs for energy, insurance, and security, as well as fans watching their spending due to the cost-of-living crisis, have seen venues close, leaving local artists struggling to be heard.
And venues are still struggling post COVID. Great Club in Marrickville and The Zoo in Brisbane are two important venues that closed their doors recently, Adams cites, adding “there is constant chatter about the viability of venues.”
According to musician (and MWM video producer) Joshua Barnett,
“Insurance companies are continuing to charge extortionate amounts after COVID and local venues like the Zoo simply can’t afford that on top of raising rents.”
Multinational domination
One major concern is that the $3 billion local live music industry is increasingly dominated by overseas corporations like Live Nation and its subsidiary Ticketmaster and private equity firms, such as US-owned and Cayman Islands-domiciled Silverlake, which owns other major players, including Ticket Entertainment Group (TEG).
This model favours big-name offshore artists performing at mega venues.
Live Nation’s vertically integrated model sees it promote everything from mega-shows such as Taylor Swift, Coldplay and Billie Eilish to festivals like (recently cancelled) Splendour in the Grass and Harvest Rock. Along with ownership or controlling interest in venues, ticketing companies and also clipping the ticket on merchandise and on-site concessions.
In Australia, it has bulked up with a string of acquisitions across the sector in recent years in ticketing and promotions, as well as building and buying a number of major venues.
“If a promoter company owns the ticket company, they get all sorts of advantages, Brian “Smash” Chladil, founder and managing director of local ticketing company OzTix, explained to MWM. “Ticket companies have both a lot of data and a lot of cash. Both are usually protected by consumer law and privacy law. The promoter company is able to gain access to the cash and data.”
And here’s the rub, Chladil says – and Live Nation’s financials bear him out – that the promoter realises that they don’t need to make money by promoting anymore because they make so much in ticket fees, selling their customer’s data and investing the cash.
Last year, Live Nation reported a 2% profit margin in its concerts division, while ticketing made 38% and ads and sponsorships 62%.
“If you are a promoter trying to make money on a tour, how can you compete with a company that doesn’t need to make money on the promoting side? It’s inherently anti-competitive and should never have been allowed,” Chladil says.
An analysis provided to MWM shows that concerts ticketed by Ticketmaster take from 19 to 24% of the ticket’s face value, compared to only 9 to 11% by Australian vendors Oztix and Moshtox. Ticketmaster also takes up to 20% of merchandise sales at the venues.
Ticketing oligopoly
In the US, the Department of Justice wants to split Live Nation’s ticketing and promotion businesses. It was joined in an anti-trust lawsuit filed in May by Attorneys General from 29 states, and the District of Columbia joined the federal antitrust lawsuit.
As mentioned, Live Nation’s accounts show that it is from ticketing rather than artist tours, where almost all its profit flows. Critics argue that the company has won a key battle in having the so-called “all in ticketing” legislated by the ‘Transparency in Charges for Key Events Ticketing Act‘ that passed Congress recently.
“Because Ticketmaster or Ticketek has exclusive control of venues there is no regulation to stop them charging what they want and calling various invented charges whatever they want,” one industry insider who did not want to be named said.
The integrated model is increasingly prevalent in Australia, where independent promoters and ticketing companies say money is being sucked from consumers by international acts and global companies – that pay little or no tax in Australia – increasingly starving smaller venues and local artists. Yet in Australia the company – in tandem with its fellow ticketing oligopolist TEG (Ticketek), continues unimpeded.
Venues need support
It’s a widespread problem, but solutions are emerging. In the UK, a one-pound venue ticketing levy has been proposed to help fund small venues and local acts, and in some European countries, government-funded live music “passports” are handed out to young people to help them form gig-attending habits.
In 2022, the Spanish Government funded a Youth Cultural Bonus that saw Spanish young people given €400 of vouchers to spend on the arts when they turned 18. This constituted up to €200 on live events or activities up to €100 on physical products and up to €100 on digital products and services, including music streaming subscriptions.
Here, the ALMBC is gathering industry support for an arena ticket levy based on the UK model. This levy would involve collecting a small amount – projected at $1 – from each ticket sold for major events in large arenas. The funds would be managed through a trust specifically established to support smaller, independent venues that are crucial to the nurturing and development of local talent.
The levy would directly support the maintenance and upgrading of small to medium-sized venues. This would also providide financial resources to venues that are foundational to the music ecosystem, ensuring they can continue to host new and existing talent. The idea is to
encourage a healthier balance between large-scale events and grassroots music scenes, fostering a diverse and vibrant cultural offering.
“We need broad support; we simply can’t have grassroots venues fall out of the market”, Adams says.
In terms of what the government can do, Adams says that it’s “a big education piece – they mean well, but can’t be expected to know the details about an industry that has been happy to be quite opaque for years. “So the same vested interests are sounded out each time – this will take time as well as some genuine thought and a new approach.”
Support local musicians, not mega-artists
Recent news emerged that the Western Australian government handed $8 million to Live Nation to subsidise exclusive Coldplay concerts for the state, adding to $16 million previously reported that was given to Live Nation or companies it owns by state and federal government programs.
Compare this to last month’s announcement that Music Australia, a new body to promote local music under the Creative Australia umbrella, would give $1.45 million to support 98 projects involving a range of artists, from solo acts to bands, producers, composers and songwriters.
This disparity highlights the need for plenty of education on how taxpayers’ money should be spent in the sector and the urgency of regulation.
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Michael Sainsbury is a former China correspondent who has lived and worked across North, Southeast and South Asia for 11 years. Now based in regional Australia, he has more than 25 years’ experience writing about business, politics and human rights in Australia and the Indo-Pacific. He has worked for News Corp, Fairfax, Nikkei and a range of independent media outlets and has won multiple awards in Australia and Asia for his reporting. He is a fierce believer in the importance of independent media.