The coronavirus pandemic has ravaged the concert industry in a way the sector has never felt before. While much of live music’s major players are prepared for the not infrequent cancellation due to weather or an artist’s illness, the mass cancellation of nearly all performances and festivals during the Spring of 2020 has left promoters, ticketers, venues, agents and artists in an increasingly vulnerable position as each month goes by without revenue coming in.
In the wake of this global crisis, the impact of shelter-in-place is already being felt as some of the most beloved and long-standing venues, like Slim’s in San Francisco, have already closed their doors, and agencies are laying off or furloughing employees.
Kevin Lyman, the founder of traveling festival Vans Warped Tour, which ended with its final cross-country run in 2018 after 24 years, is among those waiting out the storm. His Kevin Lyman Group produces live events and provides brand strategy services to the touring sector. An expert on all things related to staging a concert, he spoke to Variety about issues related to insurance, rescheduling and how he expects the industry to adapt.
There are the real-life effects of the pandemic where shows care being canceled or postponed, but what are the implications contractually between calling a date off completely or rescheduling?
It’s why you saw a lot of festivals waiting as long as possible to cancel. I know a lot of the festivals have said to artists that they will transfer the artist’s payment to the rescheduled date, and the ones that cancelled have often said that they are not going to pay the artists for a cancelled festival. Some [artists] have said, “You’ve paid us a deposit [for the festival] and we are going to hold it against earnings for future shows.” Everyone has really had to learn how to play together a little better than they ever have had to before because we really are in a mode of survival in this business.
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How are smaller festivals and larger festivals dealing with this crisis? Are their responses fairly different?
I think for smaller festivals, especially ones that hadn’t announced yet, that it was an easy choice to just postpone them until 2021. There were a few projects I was working on with other festival people, and about a month ago, we said, “Let’s just table this for now.”
What we are seeing now that’s a lot trickier is the rescheduling of the larger festivals. So many of them are going in right on top of each other. I have a friend who compiled a list of all the festivals rescheduled onto the same weekends. If you look closely at it, there’s some artists that are scheduled to be at 3 different festivals on the same weekend. The talent issue will cause some major problems.
If the live business thinks it can push all the traffic to the end of the year, we’re setting ourselves up for the second big hit. First hit is right now, obviously, but we are looking at many painful days ahead if we crowd the market too much.
One of the biggest concerns are the returns. Many of rescheduled festivals offering a refunded or changed tickets and are seeing returns in the 30-40% range. That’s really scary. So, I think that for the people who were deciding between rescheduling or cancelling their festivals, it has pushed them to want to cancel more.
Will the customer see any major changes to an experience at a festival? For example, price hikes, cutting corners, less amenities for VIPs?
I don’t see a price hike ever being feasible. People are going to be looking at their money very closely after this and I think a lot of people who are returning their tickets right now are thinking that maybe this isn’t the year to go to a festival. If you’re factoring in the ticket price and even a couple nights at a cheap hotel, you’re look at over $1,000 for a weekend. To try to raise a ticket price in an economic downturn would be a very big mistake.
Honestly, you’re almost going to have to offer more to get them out there. There will definitely be cutbacks in the production, the artist catering… the kind of stuff that’s not visible to the public. But honestly, what these rescheduled fall festivals are going to need to look out for more is that there won’t be enough staging companies and lighting companies available.
Those details like port-a-potties, fencing, lighting, etc. are essential, and most festivals contract with a handful of companies…
Yeah, I know a lot of staging and sound companies are saying, “look, we need a 50% deposit, non-refundable for the fall to hold equipment for you.” Because so many companies are hurting badly right now, and they can’t risk it.
After the release of the Fyre Festival documentaries last year, it really brought up the importance of festival insurance to cover disasters or other unforeseen issues. How many of these festivals do you think bought the pandemic provision?
Very few. There was an exclusion for contagious disease in most contracts. That’s why people waited until the cities shut them down. When the city or state came in and said, “We can’t provide the police, fire, and medical services you need,” it often changed the way the insurance companies pay out. This causes insurance to cover it not as a contagious disease but as something like “civil unrest.” That’s why you’re seeing some of the cancellations coming later than you’d expect. They wanted to see how their insurance would pay out, and frankly, they didn’t want to have to give out refunds so soon. You’ll see that ticketing companies are incredibly slow at providing refunds right now. Fans are really starting to get upset. We are just a microcosm of our government, none of us were ready for this.
Most contracts provide for relief under a “Force Majeure” (Act of God) clause. Why is a pandemic not considered an act of God?
There’s always some sort of limitation in the wording of contracts. A lot of people argue this is “force majeure” and a lot of people argue it isn’t. Well, it really is but that doesn’t mean the insurance companies have to pay on it. That clause in most contracts has been weakened over time, by the agents mostly, towards the promoters.
… There started to be limitations from the artist’s teams saying, “Well, even in a force majeure cancellation, the artist still gets paid.” There were a lot of loophole discussions that weakened it. I think we are now heading back towards the true essence of the clause now.
So many companies whose bread and butter is live music are staring down an uncertain road of liquidity. Do you think there will be any consolidation of smaller players during this time just to stay in business?
There definitely could be consolidation of companies in some ways. I think one of the smartest things some tours could do is to consolidate two tours into one and feature two headliners. Now, this will hurt the smaller artists that were planning to open for them, one of the two tour’s openers will probably be let go, but I think since there’s going to be so much traffic on the road when everything opens back up again, the smartest thing to do is feature two headliners and try to deliver twice the value to the fans to stand out.
If you were still running Vans Warped Tour this summer, how would you be navigating this situation?
I’d be freaked out! [Laughs] I was actually thinking about that. The first week of April would have been the week we went on sale. With Warped Tour, this would have been very difficult because it was always during that narrow window of summer when the kids were out of school. Usually, we were already pushing it during the time that school got back at the end of the summer anyway. We would probably be having some really hard discussion about taking a gap year right now.
How do you think this crisis could lead to opportunity for new areas of the live music industry?
I think this could be the moment for those online companies that have been struggling to grab on to a little bit of the marketplace. Not a lot, but enough to survive. I always think there’s opportunity to be created out of things like this. I think there could be job creation long-term in the business as companies look at their books a lot harder. Maybe people in my generation might look to hiring more young people with new skill sets to innovate their business. Others of us will be pushed out of live. It’s always a cycle.
