“It will likely be a financial disaster”: how coronavirus could impact the music scene (and your festival plans) this summer

Covid-19 has created unprecedented turmoil, but what could it mean for music fans? Gary Ryan investigates

As the coronavirus pandemic tightens its grip, each days brings a steady news ticker-tape of high-profile artists cancelling their shows, citing travel or health concerns. When Texas music showcase South By Southwest – who held their nerve until the eleventh hour in the face of a petition to shut down the event – was cancelled by Austin Public Health officials last week, leaving many rising artists out of pocket, it felt like a game-changer in how we view the virus’s potential disruption to the music industry.

The festival, which generated £271m for the Austin economy last year, wasn’t covered by insurance for a disease outbreak and has been forced to lay off employees due to losses. Other festivals across the globe have been pulled or postponed, including Ultra in Miami and Coachella in California, which was due to start on 10 April but has been moved to October, leaving a $1bn black-hole.

SXSW 2015
Texas festival South By South West has been cancelled amid Corona virus fears. CREDIT: Getty Images

The virus spreads

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Across Europe, stringent measures have been enacted to stem the spread of the virus, including the banning of gigs. In France, Switzerland and in seven of Germany’s 16 states  (including Berlin), gatherings of 1,000 people are prohibited. Poland has curbed all mass events, while the Czech Republic has outlawed all gatherings involving more than 100 people. At the time of publication, Italy’s death toll is 463, making it the second worst-hit country after China, where the coronavirus originated in December 2019 in the city of Wuhan. The whole of Italy is under emergency quarantine, with a ban on all public gatherings, while in China the lockdown means artists and labels have taken to “live streaming” online showcases, with fans able to interact via a chat function.

Lockdowns and quarantines mean we’re in uncharted territory in peacetime Europe, and a similar sense of flux extends to those trying to figure out what impact Covid-19 will have on the $54 billion global music industry.

“It’s becoming quite tricky to get an insight into what’s going to happen,” one promoter (who wishes to remain anonymous) tells NME. “Every day the situation changes, as a variety of measures are put in place in different areas. Just when we think we’ve got a full picture, the jigsaw pieces get thrown up in the air again. But it’s clear there’s going to be immediate financial loss for bands, and the ongoing uncertainty around whether shows will go ahead – and the anxiety of fans as to whether they’ll get sick at them – will take a toll.”

Ticket sales are suffering, with promoters pointing to a downturn in all regions of Europe, with the exception of Germany. “We’re starting to see a fear installed in ticket buyers in certain markets and promoters are worried people are going to become anxious about buying tickets,” observes Stephen Taylor, a booker at ATC, who count Fontaines D.C, ALMA and Girl Band among the artists they rep. “We’ll need to see how the virus progresses before we know the extent of the damage on the music industry. The fear is definitely there.” Even Live Nation has seen its share price plummet by 36 per cent in the last 15 days.

Festival season cometh (or does it?)

No music festivals have been pulled in the UK. As our festival season starts later than the US, we have some opportunity to plan rather than merely fire-fight. Some are suggesting that we might see an increase in extra health measures. CrowdRX, an emergency service company which works with festivals in the US, tells NME there has been an upsurge in interest in its thermal imagining fever screening system. But the worry on everybody’s mind is: will Glastonbury end up cancelled?

At the start of the month Adrian Coombs, Glastonbury Festival’s Head of Event Operations, said in a statement: “Glastonbury Festival thoroughly plans each year’s event, and puts in place all necessary measures to protect the public and maximise safety. We work closely with all of the relevant agencies, including Public Health England and the NHS, and always review our plans as any circumstances change. With this in mind and with our 2020 Festival still 16 weeks away, we continue to plan and prepare for the event, whilst at the same time closely monitoring developments with the coronavirus situation.” The festival had no further comment to make at this stage.

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“Festivals will not want to cancel so we can expect them to do everything in their powers to go ahead,” said one gig booker. “Fortunately, we’re not yet in the festival season, and there is talk that the warm weather will aid in ending the spread of the virus if it were still to be an issue at that time.”

Coronavirus under a microscope. Credit: Getty

Dr. Iain A Taylor, Music Industries Lecturer at Birmingham City University, feels that although it is “inevitable” Covid-19 will affect the music industries, the severity will depend upon what steps the government takes if it elects to move from the “containment” part of its four part plan and implement “social distancing” measures, similar to those already seen across the EU zone, such as banning large gatherings like music gigs.

“It’s likely that the impact will be felt more acutely by the live sector, in the first instance at least, driven by a combination of limitations on travel for touring acts, and the risk that audiences will elect to stay at home rather than attending pubic events,” explains Dr. Taylor.

Even if we don’t enter the social distancing stage, Dr. Taylor predicts that nudge behaviour and growing anxiety over the virus might lead to people avoiding gigs anyway. “Given the widespread panic-buying of consumer goods – from soap and sanitiser to toilet paper – that we’ve seen in the media, it seems safe to speculate that a similar mindset might see people elect to stay away from live events, whether official guidance advises it or not,” he says.

The knock-on cost

The most recent figures value the live music industry at £1.1bn annually, so the cost of widespread cancellations has the potential to be significant to all who rely on live music for their livelihoods. This disruption, and the financial burdens associated with it, will be compounded should it lead to UK festivals being axed, notes Dr. Taylor. “Music tourism is worth in the region of £4.5bn annually to the UK, with people coming all over the world to enjoy the UK’s vibrant live music culture, and festival season is a significant driving factor,” he says.

“Cancelled events would have a significant knock-on effect on a range of businesses which typically benefit from this tourist spend – hotels, taxis, bars and restaurants will all see significant drops in revenues should major festivals be cancelled.”

Music Venue Trust CEO Mark Davyd says that UK venues only really have until “next week” (from March 16) before they start to face serious financial problems. “The big question really is, ‘What is the UK government going to do?’”, he adds. “Just dealing with this downturn will require government intervention. In Italy, they’re announcing that they’re going to suspend mortgages and business rate payments. They would need to match that here.”

Already, the axing of SXSW is having huge ramifications for the UK’s indie scene. Not only are acts that have already made travel potentially facing financial ruin, their VISAs are no longer valid.

“Artists and labels stand to suffer severe direct financial losses from the outlay they have invested in touring and travelling to Austin,” says Paul Pacifico, CEO of the Association of Independent Music, a trade body representing the independent record sector. “Independent labels often allocate a significant amount of their marketing spend to artist showcases at SXSW which have now been cancelled with little likelihood of recovery. Many artists use SXSW as a platform to launch entire US tours from. They now face being turned away from the country at the point of entry due to the event’s cancellation.”

There is also an ‘opportunity cost’ – marketing campaigns are often crafted for public interest to peak at the yearly showcase. “That moment is now lost,” says Pacifico. “This is more damaging for independents, who tend to work with fewer artists on a deeper level than bigger companies which can take the financial hit and come back round again on the ‘conveyor belt’ next year.”

Against me! frontwoman Laura Jane Grace. Credit: Getty

Laura Jane Grace, frontwoman of punk band Against Me!, recently highlighted that artists don’t tend to be covered for coronavirus. “All the bands cancelling shows because of coronavirus are doing so because their insurance companies updated their policies to not cover cancellations due to the virus,” she wrote on Twitter. “I know because ours did the same.”

“Most artists aren’t insured against coronavirus because insurers identified the threat early on and wouldn’t include it,” echoes Stephen Taylor. “Aside from that, the promoters that may not have applicable insurance won’t be feeling too rosy either – there is no commitment from governments’ to offer financial support in some of the worst affected areas, and with thousand-capacity shows cancelled, it will likely be financial disaster for many which is very sad.”

Panic in the music industry

The Musicians’ Union have been inundated with concerns from its 3000-plus members. With the start of the peak of the outbreak in the UK expected within a fortnight, if the UK enters a social distancing phase, their freelance members “risk losing 100 per cent of their income,” says their general secretary Naomi Pohl. They are currently lobbying the government for sick pay from day for all self-employed workers who have work cancelled due to coronavirus – essential when the average income from music is £20,000 (under the average UK income of £28,677), meaning musicians are often in a precarious financial position and lack a buffer.

“The government advice we’ve had is that musicians should be putting money aside in case they can’t work for a few months, but our members rely on the next pay cheque to pay their mortgages,” says Pohl. “We expect to see increased requests for hardship grants and our Benevolent Fund.”

Making matters worse, 60 per cent of their freelance members teach to supplement their income. “So if schools close, they may have to reschedule instrumental lessons – and during the closure period, they may not be able to work.”

In Switzerland, the reaction was strong and swift, with events hosting over 1000 people curbed since February  – meaning artists such as Sam Fender had to cancel gigs there – and smaller gigs placed under threat. Théo Quiblier, booker/agent for the Swiss-based Two Gentleman, says that ticket sales have “very violently” declined. “Some sales have, at best suffered a 50 per cent reduction. At worst, some have stopped altogether,” he adds.

An unprecedented uncertainty

“We are facing a type of uncertainty that we have never experienced before,” he outlines. “The artists that are currently touring do not know if they will be able to perform their planned run and those who have not begun touring yet do not know if they will be able to travel, fearing the incurred expenses from engaging in a full production that cannot play in certain cities or countries. Everyone is in the dark.”

At present, shows with over 1000 attendance are cancelled until March 15, but it seems “highly unlikely” that everything will return to normal after this date. “For example, the m4music festival – the Swiss equivalent of the Great Escape – is already cancelled, even though it takes place 30 March – 1 April in Zurich.”

Lacuna Coil frontwoman Cristina Scabbia

Travel restrictions and health concerns forced Italian goth metal band Lacuna Coil to cancel a slew of upcoming shows last week. “It was a difficult decision because it doesn’t just affect the band and fans – there’s a lot of people that don’t take into account, including promoters, roadies, technical crew members,” says frontwoman Cristina Scabbia. “But there was no other way unfortunately because too many flights were at risk, too many countries decided to contain everything by not letting Italians in, so logistically it would be impossible for us to play in every territory and hold a tour together.”

“It’s not a choice,” she adds. “It’s not that you don’t want to play because you’re drunk from the evening before or you’re tired. This is a world emergency and customs are closing and they’re cancelling flights, so it’s absolutely impossible for some artists to play shows – it’s not just a moral issue.”

At the moment, she feels the music industry’s financial impact is secondary to the human cost. We shouldn’t lose sight of the human face behind every statistic: “What’s more important is that we have to act now. The emergency is now, so I agree with all this because it’s the only way to contain this. Coronavirus doesn’t automatically mean death, but it’s dangerous for people with pre-existing health conditions such as those with weakened immune systems or those who have underlying chronic conditions such as heart disease.

Keep calm and carry on (but use hand sanitiser)

You might perversely – and optimistically – speculate that a Switzerland-style ban on events of 1000 people in the UK could benefit upcoming talent touring the toilet circuit, as these will be the only gigs that punters can attend. However, the Music Venue Trust ‘s Mark Davyd identified a downturn in gross income over the past week, fans buying tickets yet not coming to gigs and venues having their shows cancelled.

Bearing in mind that many of these venues are run on a shoestring and struggle to survive, Dr Taylor urges that we still attend gigs, and that concerts shouldn’t be viewed as petri dishes for the virus.“Until official guidance is issued to the contrary, I’m of the opinion that people should continue to attend events and enjoy live music, especially at small and independent grass roots venues, for whom any loss of income is an existential threat.”

Wash those hands, people. Credit: Getty

These sentiments are echoed by Pacifico. “It’s important not to underplay the risks of Covid-19 nor minimise the tragedy for people affected but we must not lose sight of the current public health advice which is to keep calm and carry on.”

“The whirlwind of escalating concern can have a damaging knock-on effect for smaller companies. SMEs, which lack the ability of their corporate rivals to absorb losses, stand to suffer serious consequences from cancellations and the loss of business. We must avoid escalation until experts deem it necessary.”

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