Record Scratch: Coronavirus vs. the Music Industry

South by Southwest (SXSW) had its biggest year to date in 2019. Based in Austin, Texas, SXSW is a combination of live music performances, movie premieres, and conferences and attributes much of its fame to its iconic music festival, a showcase of some of the biggest names in the indie scene. Overall, SXSW brought $355.9 million in 2019 into the Austin economy, a $5 million leap from the previous year and a continuation of a trend that only seemed to go up. But that was before the concerns over COVID-19 were even a thought in anybody’s mind, before the global pandemic spread to the U.S. and stuck its tendrils into every facet of the American economy, including live music. SXSW 2020 was canceled in early March, marking the festival’s first cancellation since its inception in 1987. With the cancellation or postponement of countless festivals and album releases, the damage COVID-19 is dealing to the music industry goes far deeper than SXSW, and nobody will be spared from its wrath.

SXSW’s cancellation serves as a warning for the entire live music industry, which was expected to have record-high profits this year. Major festivals like Coachella, Bonnaroo, and Governors Ball have been either postponed or canceled entirely due to the danger posed by large social gatherings, with the tours of huge artists like BTS, Billie Eilish, and Khalid following suit. While this is crucial to keeping people safe during the COVID-19 crisis, it has left the industry at a standstill with billions of dollars frozen in the bank accounts of major tour promoters and talent agencies and sweeping layoffs for the employees of promoters. Though major ticketing services like Live Nation and AEG can handle the crisis relatively well, independent promoters are trapped in a cycle of financial instability as agencies of booked acts demand for money they don’t have. If the COVID-19 pandemic slows down a bit this summer, the live music industry may become even more cut throat due to the foreclosure of smaller indie promoters, making way for major promoters to exercise more of their power. The pandemic has also destroyed the careers of artists who rely on the touring circuit. Most indie artists live and die on a fragile freelance system in which they are paid show-to-show, and the gig-based revenue they rely on cannot exist without any gigs to play.

Indie or not, it is clear that COVID-19 is changing the roadmap for artists in coming months. Album sales and streaming numbers have been on a decline as the pandemic worsens, with digital streams dropping 7.6 percent during the week of March 13 to March 19. It is easy to see why considering how many establishments that would be playing music have shut down and how many people who would be listening to music during their commute are forced to stay home. In addition, Amazon, the biggest record seller in the world, has announced that it is “[prioritizing] stocking and delivering essential items like household staples, sanitizers, baby formula, and medical supplies” and will not receive new shipments of vinyl records or CDs for the time being. Though essential items should obviously be prioritized, this takes away another potential source of income for artists and record labels. While artists can support themselves through other sources, such as revenue from streaming and merch sales, this combination of factors has led to the postponement of many albums, including those of artists like Lady Gaga and Sam Smith, to later dates.

Though the situation may be dire, many artists are still trying to connect with fans, utilizing social media to perform and communicate in a time of social distancing. Consumers can livestream virtual concerts featuring artists from every genre imaginable, from rapper Swae Lee to the New York Philharmonic. These virtual concerts often scale from the arena-sized grandeur of their music down to a humble show hosted in the artist’s own house. Other artists have turned to podcasts or virtual talk shows to keep in touch with their fans. It is a nice gesture in a dark and uncertain time.

The devastation that COVID-19 has inflicted on the music industry is sure to have rippling effects even after the pandemic blows over, and when we emerge from this crisis, it will be a far cry to say that the industry will ever be normal again. In an already cut throat industry, the wheat will be separated from the chaff as promoters, artists, and record labels fight to keep themselves afloat amongst a drought of opportunity. We may see big companies gain even more power as independent artists and promoters continue to struggle financially, and we may see huge changes in the music we listen to as record labels scramble to adapt to this pandemic. And we may see no major changes at all. But for now all we can do is stay safe, stay at home, and maybe listen to a little music.