Virus-Related Venue Closures Will Impact Music Business For Years To Come

The mass venue closures precipitated by COVID-19 will continue to affect the music industry for years moving forward, particularly when it comes to the smaller independent venues. These have, for decades, been the circuit where up-and-coming acts would cut their teeth, before rising to larger prominence.

Guest post by Bobby Owsinski of Music 3.0

Music has changed a lot in recent years in that someone recording in their bedroom can rocket to concert stages in front of 20,000 people while skipping the grind of constant touring in small to medium size venues. Yes, jumping the entire start-up phase of artistry occurs now now than it ever did in the past, but it still only happens to a chosen few artists that luckily capture lightning in a bottle. Most artists still have to build their audiences the old-fashioned way, which means playing in front of people in venues of all sizes and shapes. Unfortunately potential venue closures large and small because of the COVID-19 lockdown now threaten that pathway.

According to the National Independent Venue Association (NIVA), an organization that claims 2,000 member venues in all 50 states, up to 90% now face permanent closure if they don’t receive a helping hand through some sort of federal funding. Mass venue closures will have ramifications that will ripple through the music business for years to come.

The Farm Team

Small clubs to medium-size venues have always acted as a farm system (to use a baseball analogy) that provides experience for new artists, which could lead to national exposure later. Here even a baby act or garage band can gain exposure playing in front of people in all sorts of conditions while honing their chops and stage presence. The ones that can’t make the jump to the national spotlight can still make a nice living for as long as they wish to tour, and many acts with only a hit or two can return to the circuit to continue a less lucrative but still more than adequate career.

And make no mistake about it, the live side of the business is the jet fuel that makes the entire music industry fly. Even internationally famous artists make up to 75% of their revenue from touring, and that figure is actually higher for artists lower on the food chain.

Local Economic Impact

But the economic impact doesn’t stop there. According to NIVA, for every $1 spent on a ticket at small venues, a total of $12 in economic activity is generated within their local communities on restaurants, hotels, taxis, and retail establishments. That adds up to $10 billion of economic impact.

Although the 90% closure figure may be a bit extreme, the fact of the matter is that for every venue that closes there’s one less place for an artist to learn his or her craft in front of people. That translates into poorer shows from artists that do reach a national level but have to gain their experience from on-the-job training in front of massive audiences (granted, that’s going to take some time to happen again, but it will eventually). If you’re going to pay top dollar to see an artist, you want them to be in top form, not look back at you clueless and scared because they’ve never been on that side of the stage before.

Crafting music in the studio is one thing, but performing is quite another, and one influences another. Throughout recorded music time there are numerous stories about new songs that developed at soundcheck or received such a tremendous response from a live audience that the artist then included it on a record and it went on to become a hit.

That said, one of the things that the live music scene hates is a void, and even if a venue should close it’s probably true that others will eventually pop up in its place. Opening a music venue is harder than it’s ever been though, since increased rents, insurance costs and local noise control ordinances can be prohibitive. Opening a new club in a desirable location is something that won’t happen as quickly as it has been in the past.

Keeping The Doors Open

It should be noted that the current Paycheck Protection Program funding (PPP) has not been a sufficient answer for most venues financial woes since it only covers payroll. Venues are still responsible for rent and infrastructure payments even as the facility stays closed. Just like any business, an owner might be able to sustain for a few months, but that gets much more difficult for every month that the enforced venue closures (or reclosure if there’s a second wave of infections) carry on.

Even as cities begin to loosen restrictions on venue closures, that still might not be enough for many to survive. Most venues already operate on slim margins, and having shows at reduced capacities with increased costs from sanitizing is not a combination for successfully keeping the doors open.

NIVA has created SaveOurStages.com asking legislators to provide federal assistance to independent venues and promoters. This campaign has generated more than 500,000 emails that have reached all 538 members of Congress. 150 members of that body have already sent letters to Mitch McConnell and Chuck Schumer in the Senate, and Nancy Pelosi and Kevin McCarthy in the House supporting NIVA’s requests.

Helping to save venues now will not only support the current music business when it needs it most, but also ensure that it stays healthy for many years down the road as well.