🌱 virtual concerts could allow artists to scale again

Of the following three options, how do you engage with music most frequently?

1. Listening to music you’re renting via streaming subscription
2. Listening to music you’ve purchased either digitally or on physical records/CDs/etc
3. Attending concerts

Whichever option you chose, I suspect it was not 3. If you enjoy music, you’re likely listening to recorded music more often than seeing a band in person. So then why aren’t musicians making more money from 1 & 2 than they are from 3? And is it possible for the current forays into virtual and metaverse performances change that?

According to the 2012 Future of Music survey, full-time¹ musicians reported earning 19% of their income from live performances. Comparatively, they reported earning 6% of their income from sound recordings².

Two things of note:

1. Sound recording sales are passive income. You do the work once, and you get paid slowly over time. Live performances are active income. You have to do the work each time to get paid.
2. As discussed, more people listen to music outside of concerts rather than in concerts. So 19% of these artists’ income is coming from a smaller number of song “listens” than the other 6% of their income.

There’s a recent change, however, that may help artists: virtual concerts. We’ve already seen The Weeknd perform on TikTok, Ariana Grande in Fornite, as well as smaller artists performing online via songkick and eventbrite. Much of this change has been afforded by pandemic restrictions, but it will be curious to see how it helps artists, if at all.

Potential Benefits

Virtual concerts allow you to play for a larger audience for much cheaper. A tour of 5 cities can now be 5 concerts from the comfort of your recording studio. And the audience? It’s no longer just fans in those 5 cities. It’s accessible to fans across the world. This brings virtual concerts a little closer to the scalability album sales provided in the past.

Additionally, it lowers the cost of collaboration. Instead of opening for performers in your area, you can now open for anyone at any time. This may allow “middle-class” bands to get in front of more audiences than they would in the real world.

That’s not the mention the ability to pre-record 50+% of your concert in advance. Especially as digital avatars become more popular, Ariana Grande’s team could generate 5 different concerts over the course of a few hours. On the one hand, this sounds like cheating. But if designed, priced, and marketed correctly, these artist-backed “streaming parties” could replace album purchase revenue in a way that the current streaming model has not.

Potential Costs

Virtual concerts still aren’t truly passive. You still have to show up to get paid. The current iteration of virtual concerts is not a good substitute for the flexibility of album sales, even if it is more scalable.

It’s unclear to me right now just how much cheaper a good virtual concert is compared to a live one. The Weeknd and Ariana Grande both embodied avatars and used fancy graphics to rival the experience of a concert venue. Smaller artists can’t yet afford that kind of support. Driving around to 5 cities in a camper van may actually be cheaper than hiring a graphics engineer. And the sound quality in a concert hall will be significantly better than a Zoom stream on the living room TV.

There’s also the visibility issue. If Ariana Grande tweets about a virtual concert, it will sell out. But less-known bands may more easily get heard at local restaurants rather than the cluttered internet.

The final question is if fans will enjoy virtual concerts long-term. It’s clear from the classes we’ve slept through and the meetings we’ve scrolled through: the current iteration of “streamed events” is subpar. The level of connection and excitement doesn’t match what we feel in-person. Will virtual concerts ever form an iteration that people are willing to pay for? Or will artists be forced to prioritize live concerts for revenue forever?

Hypothesis

Artists will continue to experiment with virtual offerings: there’s too much to gain. Here are a few hypotheses:

• the performance pie will get larger, but big artists will get a disproportionately large slice.
  • Before you had the option to see a random local band once a week and Taylor Swift once every few years. What if you could see Taylor once a year or even multiple times a year? Your budget to see other artists may shrink.
• we’ll move beyond virtual concerts
  • Virtual concerts might lead to physical or virtual merch sales, I also expect to see changes in format and what people pay for. Virtual streaming parties, Patreon-style support tiers, and other virtual engagement opportunities can be a boon for artists. Chinese musicians can have a direct monetary relationship with their fans, and I suspect we’ll see that spread to more countries.
  • The reason for this is two-fold. First: artists make art. As tools and demand make the internet a more flexible medium, artists will innovate. Second: a small increase in passive income can mean significant quality of life improvements for many artists. The incentives are aligned for artists to create more scalable ways to connect with fans.

If I’m still blogging in 5 years, I’d like to check back in here and see how many of these hypotheses come true. How do you think virtual concerts will change the music landscape? Will it have any impact at all or will it disappear?

Info:

• Inspired by:
  • https://cointelegraph.com/magazine/2021/12/27/vr-animal-concerts-metaverse-lead-next-wave-crypto-adoption
  • [[Cointelegraph Magazine]], [[Ahonen, Elias]]

1. I define full-time musicians here as “spending more than 36 hours a week and earning more than 90% of their personal income from music”. The survey splits this group into “full time”, “emerging”, “established”, “old guard” based on experience in the industry, however for lack of a better word, I’m grouping all these categories together under the “full-time” label. ↩

2. The site describes sound recordings as “physical sales, digital sales, music sales at shows, payments from interactive services (Rhapsody, Spotify), digital performance royalties, and master use licenses for synchs or ringtones.” ↩

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Updates

• Thu 18 Jan 2024: Updated category and title to better reflect the style of the piece. This piece proposes an answer the question, it doesn't just pose it. Previous title: ❔ could virtual concerts allow artists to scale again