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Shifting risk to artists - the future of music business

Major companies have started to shift financial risks to artists thanks to COVID-19. Is this the future of the music business?

Alan Mandel

· 4 mins read

Everyone knows that being an artist is a risky endeavour. 2020 has exasperated that to a new level. As if the current pandemic and lack of events wasn’t enough, a new memo leaked from Live Nation explains their plans to shift the risk of events from the promoters on to the backs of artists.

In the leaked memo, Live Nation describes their plan for 2021, and how their events will proceed with artist bookings. Some of the more drastic changes are laid out below:

  • Artist guarantees will be reduced by 20%
  • If an artist cancels an event, they must pay the promoter 2x the fee they were initially owed
  • If a promoter cancels an event due to poor ticket sales, the artist will receive 25% of their booking fee
  • Artist deposits will be reduced to 10% one month before the show

These changes could mean the difference between having a safety net and living paycheck to paycheck to an artist. Being an artist is hard enough already when it comes to finances, but with these changes to Live Nation’s policies, things are about to get a lot harder.

The policies are designed to protect promoters, who initially take a much more significant financial risk than the artists by putting on events. Often, promoters are forced to pay large sums to artists due to cancellations and unforeseen circumstances. The COVID-19 pandemic has cost many promoters a lot of money and made it impossible for some to continue business as usual.

However, the policies don’t take into mind that artists also take on many personal financial risks in creating their music and their brands. Without artists, music events and festivals wouldn’t exist. Artists have to take on their own marketing costs, not to mention the time spent creating a product for event attendees. To an artist who has spent much of their life working on their music and their brand, these policies may feel like a stab in the back by the event industry.

For Live Nation, it’s a challenge to balance these two factors to keep the ecosystem between artist and promoter functional during these unprecedented times. Without artists, there would be no shows - but the same applies to promoters.

These policies are undoubtedly extreme when viewed in the context of the past, but when looking in the context of the future, it’s needed to keep promoters motivated to continue producing events. Large scale events account for the livelihoods of many people - from those who construct the stages and set up the festivals to those who are in charge of organizing them. In a world where much of the income and freedom we took for granted have been taken away, drastic measures have to be taken to keep the industry alive.

These policies mean that it will ultimately become much harder to be a professional artist until things return to the way that they were before. Keeping yourself financially stable as an artist requires serious discipline already, and with the changes happening every day in these strange times, the challenge will be greater than ever before.

Unfortunately, this situation hurts everyone in the event industry, whether you are an artist, booking agent, or promoter. It’s essential to view everything from a top-down perspective and see that the entire business is hurting. Most people enter this business because music is something special to them, and something that they have fought for, for many years. These times are a test of dedication to the craft, regardless of your position in the music industry.

If you are an artist, remember to stay disciplined and to view the situation from a realistic perspective. Things won’t come back to the way that they were for quite some time. Buckle up and get ready for a bumpy ride, but don’t lose sight of the goal. Times like these form the legends of tomorrow!

Thank you for reading our blog! If you would like to learn more about artist management and the music industry as a whole, make sure to check out our other blogs. To learn more about Stagent and our software, check out our homepage.

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Shifting risk to artists - the future of music business

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