The live events industry has essentially been shuttered since March 2020. Five months with very little to absolutely no activity, from Broadway, off-Broadway, and regional theatre to opera, dance, classical music, concerts, tradeshows, festivals…all of the places where the live events industry thrives; where entertainment design and technology are put to use. The end result is that the designers, technicians, and stagehands on the one hand, and the rental shops, production companies, and manufactures on the other, have been idled. The cost has been great, resulting in financial loss, economic hardship, and difficult business decisions in an attempt to stay afloat. The Live Events industry is estimated to employ 12 million people and generate close to one trillion dollars in annual revenue.
Live Design sent out a survey in late July 2020 to see exactly how hard the industry has been hit. A total of 107 firms replied to the survey, revealing a rather bleak image of the economic reality. Of the 107 firms, 63.55% were production companies, 16.82% manufacturers, 10.28% rental shops, 7.48% design firms, and 1.87% distributors.
Nearly 45% of respondents reported an annual company revenue between $1 million and $30 million, while almost 40% indicated less than $1 million, and close to 16% reported an annual revenue of $50 million+ (see corresponding chart).
In comparison to 2019, business thus far in 2020 takes a dramatic turn. Just over 76% of the respondents indicated they have lost over 75% of their business since March 2020, with less than 5% of the replies indicating they lost less than 20%. The response to amount of lost revenue since March 2020 matches the loss of business question almost identically, with nearly 72% indicating a loss of over 75% of revenue (see corresponding charts).
In terms of receiving some form of government support to make up for business and revenue losses, 45% reported getting PPP loans, 30% got unemployment insurance, 18% received other forms of help (such as EIDL and/or SBA loans or credit), and 30% reported getting no help.
A resounding 77.57% of respondents have laid-off or furloughed staff, which means only 22.43% of the responding companies had not cut staff.
A total of 58.88% replied “yes” to having pioted to new projects or new products, while 42.12% have not. The companies that have pivoted found business in the following areas: hauling, digital streaming, BIM design, virtual conferences, UV technologies, and planning for future events, among others. One company noted they are working on “normal business projects plus the addition of sterilization equipment, PPE face shields, and portable lighting for temporary hospital units.”
The next round of questions addressed survival and the future, with over 48% of companies putting their chances of survival at over 50% (22% indicated 50-75%, while 26% indicated 100%). On the other hand, another 26% of companies felt that they only had a 20-50% chance of survival, and less than 7% companies put their chances below 20%.
In terms of future levels of business, 57.94% of the replies felt that their business would return to 50% of pre-COVID-19 levels during 2021; 38.32% companies felt it would be in 2022, and 3.74% of companies were looking at 2023. To get that business level back to 75%, almost half of the companies (48.60% of them) indicated it could happen in 2022, while 26.17% companies were looking at 2021, and the remaining 25.23% not hopeful until 2023. To get back to 100% pre-COVID-19 levels, the majority is looking at 2023 (36.45%) or 2024 (29.91% of companies), while 25.23% companies are looking at 2022, and less than 9% expect to reach 100% during 2021.
The results of this survey indicate that the live events industry has been severely impacted by the 2020 pandemic and the COVID-19 crisis in the United States and worldwide. The figures prove that business has been deeply curtailed, many people have lost their jobs on a temporary or permanent basis, and that the industry is not expected to bounce back to pre-COVID-19 levels at a rapid pace.
“I am currently not in business at the moment,” explains one of the respondents, “but intend re-launching the business at the beginning of the financial year of 2021/2022. I am slowly restructuring to ensure all equipment is 100% owned, well-presented, lean inventory of item types yet broad enough for small to medium productions.”
Other companies reported that they are “developing new products for next year, awaiting TV, motion picture, and live events to start up,” as well as “we were working a couple small sales projects, but we currently have no productions scheduled.” One responded: “Absolutely nothing. A few inquiries, but nothing that has taken off.”
As many people have pointed out, there is a massive domino effect that ripples through the industry, and in the case of the entertainment design industry, the dominos eventually fall to the manufacturers. Close one Broadway theatre: the cast, crew, and front-of-house staff lose their jobs, as do the company manager, press agent, and other related businesses such as the rental shops for the lighting, audio, projection, and other gear needed to run the show. Multiply by the number of Broadway theatres, off-Broadway theatres, regional theatres, opera houses, symphony halls, concert venues, clubs etc. and eventually all of the rental gear will be returned to the shops. With their shelves filled, and very few orders going out the door (to the few live events being held or new “pivot” projects), there is no need to buy new gear. No sales for the manufacturers, who then in turn are not only losing cash flow for current operations but also the funds needed for future research & development, and the advent of new technologies.
Another impact on the success of the live events business is the lack of the live events, such as tradeshows and conferences that support the industry. Along with the plays, concerts, and festivals that have been canceled, and the entire fall season of Broadway put on ice until at least January 2021, and concert tours on hold other than those using an outdoor drive-in format this summer, the industry trade shows—where manufacturers and distributors generally meet clients and make sales, as well as introduce new gear and hold hands-on training—have also been cancelled since March 2020: USITT, Prolight + Sound, InfoComm, PLASA, and now LDI2020 and NAMM in January 2021, to name a few that have fallen victim to the pandemic. This not only deprives the manufacturers of their face-to-face business arena, but also means thousands of jobs for the stagehands, riggers, and electricians working the tradeshow floors, are also out of work. While some of these events have pivoted to virtual and digital solutions, they do not solve the issues of unemployment and lack of personal contact with clients which is so essential for business success.
Many people and organizations have been hard at work on the industry’s behalf, from Michael Strickland of Bandit Lites keeping people up-to-date on Congressional decisions, PPP loans, and unemployment benefits, to NAMM’s lobbying efforts in Washington D.C. on behalf of the industry, state and local organizations, and private funds offering grants and aid to those in need.
For those interested in following the timeline of Congressional actions, Strickland’s posts at LivedDesignOnline.com provide good insight. In a call to action addressed to Congress, Strickland noted, “The Live Event Industry has been at zero income since March 13 and will be until well into 2021. The complete lack of income has been and will continue to be destroying the people, the firms and the industry. This was caused by the COVID-19 situation and the ongoing forced shutdown of all venues and large gatherings.”
In addition, Live Nation, the world’s largest concert producer, has announced that their revenue plunged by 98% in the last financial quarter, after COVID-19 devastated the live music sector. The company reportedly only presented 24 concerts in North America, while the second quarter of 2019 saw over 7,000 events.
Efforts worldwide intend to demonstrate the plight of the live events industry, such as the August 11 #WeMakeEvents Red Alert Day, at which time the live events industry across the UK came together in solidarity to host a series of creative actions. A huge #WeMakeEvents #RedAlertRESTART #Extend PUA event is being planned for September 1, 2020, at which time over 1,500 buildings and iconic structures in over 35 cities will be lit in red to urge Congress to act immediately to pass the RESTART Act and extend unemployment benefits.
The industry is clearly suffering worldwide, and hundreds of thousands of people impacted by the economic losses caused by the consequences of COVID-19 long for the vibrant business model that the live events industry was enjoying before the pandemic hit, and hopefully looks forward to enjoying in the future as the economy and the industry come back. An industry fighting for its life, but hopefully one with the resources required to survive.