By Gavin Bridge
Senior Media Analyst
The pandemic impacted the music and live entertainment industry in different ways.
Content that could be consumed at home saw increases in revenue, while content types typically consumed on the go (radio) or in-person saw negative impacts.
With things about as back to normal as possible post-pandemic, VIP+ has taken a deep look across the music industry — podcasts, radio, streaming music and live events — to assess what the key trends are in the wake of COVID-19.
Podcast and Digital Media Revenues Keep Increasing
Podcast and digital media keep trending up, with year-on-year increases seen every time companies report. A pivotal issue here is that many of the major podcast providers do not currently break out revenues made from the medium, with analysts able to glean indicative trends but a far from complete industry picture.
The most popular podcast source, based on the “Demographic Divide” consumer survey fielded for VIP+ by consumer insights experts GetWizer, is YouTube, followed by Spotify, Apple and Pandora. Of note is that fact that general podcast listeners account for half of the surveyed sample, with the other half saying they didn’t listen to a podcast. It may be the market is beginning to cap out, with domestic growth slowing overall.
Radio Is at a Crossroads
First, the good news. Two-fifths of U.S. consumers 15 or older say they like to listen to the radio. But a similar proportion say that streaming services are better than the radio, with 1 in 10 extremely pessimistic about the future of radio. These respondents skew younger, suggesting radio is facing a long-term issue with gaining new listeners to maintain audience numbers.
Yet for now radio retains its cash-cow status, with revenues greater than those seen in 2022 for major players Audacy, Cumulus Media and iHeartMedia. Branching out to digital media and podcasts is one way these companies are looking to future-proof their business, with iHeart also launching a number of FAST channels to be in front of audiences consuming media in non-traditional radio formats.
Satellite Radio Is Seeing Revenue Growth
Satellite radio is another format to see growth, at least in financial terms. SiriusXM made $1.7 billion in Q2 2022, which is an increase of 12% on levels seen two years ago. The satellite radio operator has made a concerted effort to broaden its audience beyond cars to general streaming.
While current subscriber levels are around 200K less than in Q2 2020, this can be partly explained by the continued car shortage in the U.S. (SiriusXM is packaged into many new vehicles.) With synergies anticipated with fellow Liberty Media company Live Nation, satellite radio may end up surprising many with its longevity.
Streaming and Digital Music Are Still Growing
Close to half of Americans surveyed by GetWizer for VIP+ say they value listening to music without ads, which is something that streaming music services offer for a premium. A similar proportion say it is very important to be able to select what they listen to.
This is reflected in the revenue growth major music labels have seen derived from streaming music. Across April, May and June of this year, Sony Music, Universal Music Group and Warner Music Group collectively saw $3.12 billion made from streaming, which is $1 billion more than the same period in 2020.
This is reflected in the large numbers of reported users for the few streaming services to share subscriber and monthly average user data. With the likes of Amazon and Apple not sharing information on their music services, we’re far from a full picture being available, but the growth in label revenue from the format suggests that all major services are seeing significant use by consumers.
Touring Is Back
Live events held have been ticking up since Q2 last year but saw a rally this spring. Live Nation reported there were over 8,000 events held in the U.S. and Canada in this period, with this expected to grow for the summer months.
In the VIP+/GetWizer “Demographic Divide” study, one in five people in the U.S. say that attending live concerts is important to them, which is reflected in the growth in live events. Interestingly, around 1 in 20 say virtual concerts are better than live ones — a strong starting point for brands like iHeartRadio’s iHeartLand entertainment space in Fortnite.
With the worst of the pandemic conceivably behind us, self-reported live event attendance has increased across all formats when compared with a year ago, per data from the VIP+/GetWizer study.
The pent-up demand for live events has seen revenues rocket up in 2022, with Live Nation reporting $3.6 billion from concerts and festivals in Q2, an increase of $3.3 billion from the same period last year.
Artists are also seeing increased revenue from a return on the road, with UMG and WMG both reporting out merchandise and other revenues, a large proportion of which stems from artist tours. Compared with the prior year, merchandise sales are up by $124 million, or 62%. Coming during a time of high inflation, this suggests demand to see artists is currently inelastic, a good sign for the artists themselves, as well as labels and tour operators.
The Business of Entertainment