COVID-19 could slash global electronic music sector by 56%
After its rebound in 2019, the value of the global electronic music sector is estimated to drop by 56% from US$7.3 billion to $3.3 billion this year due to COVID-19.
This estimate is in the 2020 International Music Summit report delivered overnight (July 16).
The report’s author, data analyst Kevin Watson, said that the sector has been “severely affected” in the last four months and that the slide would continue for the rest of the year.
Clubs and festivals alone are forecast to be hit with an income loss of up to 75%.
The income of EDM artists and DJs, which was instrumental in the 2019 rebound, will drop from $1.1 billion to $400 million, which translates to a year-on-year slide of 61%.
According to the report, 350 global festivals were cancelled or pushed back 12 months in April which left 8.9 million ticketholders in the lurch.
The severe impact of Ibiza clubs is assessed by 2019 data where clubbers bought 2 million tickets and their total spend of tickets, drinks, food and accommodation was €260 million.
However, it seems clubbers are straining at the leash for the live experience: 82% told Festicket they are confident they’ll be able to do so within six months.
The report pointed out that trends in 2019 and 2020 also suggest a strong recovery for EDM.
These include EDM’s recorded share growth due to its shift to streaming. Its continued growth is expected to generate $0.1 billion in additional revenue in 2020.
Post-pandemic, EDM embraced livestreaming, many moving to Twitch and TikTok.
In May 2020, seven of the 10 most viewed music streams on Twitch were electronic focussed, totalling six million viewing hours – a “phenomenal” figure, Watson said.
Diplo’s LA-based record label Mac Decent went from zero to 35 million Twitch views in 11 weeks.
DJs who performed in Fortnite increased their Instagram followers by 10% after the event.
Other new options like drive-in gigs and distanced dancefloor events are expected to become more creative in their presentation and important revenue sources in the future.
The EDM sector grew 60% in thee years in the boom years of the early 2010sm but in 2017 it declined by 3% and a further 2% in 2018.
Its 2019 rebound has nevertheless seen EDM become the fifth most popular genre.
Of EDM subgroups, techno remained at #1 four years in a row, while the newer melodic house is regarded as fourth most popular.
The estimated earnings of the 10 highest-paid DJs increased by 4% in 2019 to $273 million.
The Chainsmokers earned the most in 2019 ($46 million), followed by Marshmello ($40 million).
After growing 60% in just three years during the boom years of the early 2010s, EDM’s growth slowed 3% in 2017 and a further 2% the following year.
Revenue from software and hardware (expected to drop by 25% drop) this while, while online firms offering home gear, education, mastering and collab tools had an uptick in business.