COVID-19 has not let any industry go unaffected. The music industry, in particular, has been terribly affected by the virus, with any and all shows either postponed or cancelled. Though some have been able to find innovation through drive-in attractions, it’s not the same. In the new International Music Summit (IMS) Ibiza report, it’s indicated that the electronic industry alone will face a loss of $4 billion during the COVID crisis.
2019, pre-COVID, was actually a banner year for electronic music. According to the report, the estimated earnings of the 10 highest-paid DJs increased by 4% YoY in 2019 to $273m. This is similar to total earnings in 2014-16, but below the 2017 peak. Even SoundCloud revenue growth continued with financial accounts showing a 19% increase in 2018, and reports suggesting a $200m run-rate by Q4 2019.
The industry as a whole rebounded in 2019 to 2017 numbers, with a 2% increase in estimated industry value to $7.3 billion.
However, due to COVID, Dance/Electronic clubs & festivals could lose around 75% of their income in 2020, equivalent to an estimated $3.3 billion. DJs & Artists income could fall from $1.1bn in 2019 to $0.4bn in 2020 as a result of COVID-19, a drop of 61%. Revenue from Electronic Music software, hardware and other sources could fall 25% YoY in 2020 to $0.7b.
But it’s not all bad. The quick transition to live stream has helped sustain growth in some sectors. Beatport ReConnect 1+2 raised $260,000 and garnered 23m+ views. Digital Mirage 1+2 raised $370,000 and garnered 4m+ views. David Guetta’s United At Home raised over $1,250,000 with 50m+ views. Defected Virtual Festivals raised over $1,200,000 with 18.5m views.
In May 2020, 7 of the 10 most watched music streamers on Twitch were Electronic focused, totaling 6m viewer hours, with Insomniac leading the pack, generating 2.6 million viewer hours by running online versions of their events, including the EDC virtual rave-a-thon.
Diplo’s record label Mad Decent joined Twitch in early 2020 and at March 14th had 805 views. Since then a combination of live DJ sets mixed with gaming streams has generated over 35 million views and 84k followers.
DJs who performed in Fortnite, like deadmau5, Major Lazer, Dillon Francis, and Steve Aoki, increased their Instagram follower growth by 10x during and after the events.
Unfortunately even with all the live stream festivals, drive-in raves, and socially distanced dancefloors, the current model isn’t sustainable or commercially viable for the longterm. Live streaming platforms are adapting, and DJs & artists are taking advantage of sponsorship opportunities, but our industry needs a direct injection of liquid money from the government to be able to come back in full force in 2021/2022.
Photo by Tyler Hill for Insomniac Events