Australia, and Melbourne in particular, is often considered one of the music capitals of the world. However, it is at risk of losing that reputation in the wake of the COVID-19 pandemic. The recovery for the Music and Theatre Productions industry and Performing Arts Venues industry in 2021-22 and beyond will likely remain subdued due to ongoing COVID-19 related restrictions, a lack of effective government support and a loss of participation in the industry.
‘Revenue for music and theatre productions is projected to rise by an average of 4.9% per year over the five years through 2025-26, while performing arts venues are anticipated to increase by an average of 4.1%. However, revenue is not expected to surpass the highs achieved prior to the COVID-19 outbreak until after 2025-26, as capacity constraints and weaker participation limit growth,’ said IBISWorld Senior Industry Analyst Arthur Kyriakopoulos.
Revenue for the Music and Theatre Productions industry is expected to fall to $1.1 billion in 2020-21, down from $2.0 billion in 2018-19, while revenue for the Performing Arts Venues industry is forecast to fall to total $655.6 million in 2020-21, down from $951.4 million in 2018-19.
What will drive the recovery?
Revenue for music and theatres productions, and performing arts venues is expected to rise by 10.8% and 7.3%, respectively, in 2021-22, driven by 4.7% growth in Expenditure on Recreation and Culture and 2.6% growth in Real Household Discretionary Incomes. The return of international travel is also anticipated to boost the industry’s performance, both by enabling tourists to see Australian events, and enabling international acts to return to Australia.
While these industries are anticipated to return to growth in 2021-22, the recovery over the next five years is forecast to be slow. The drawn-out vaccine rollout will likely delay the easing of event capacity restrictions until the second half of 2021-22. Occasional outbreaks of COVID-19 may occur, further dampening both business confidence and consumer sentiment, and reducing expenditure on industry activities. In these cases, shows that were postponed may be forced to refund tickets, as capacity constraints limit total attendance and further mitigate sales.
‘While revenue is expected to grow strongly in the next financial year, this is slightly misleading as it is coming from an incredibly low base year in 2020-21,’ said Mr Kyriakopoulos.
Participation across the Australian music sector is expected to begin recovering in 2021-22, with 8.5% growth in employment for music and theatre productions and 3.7% growth for venues. Establishment numbers are forecast to increase by 5.5% and 2.7%, respectively. However, the lingering effects of the pandemic are anticipated to constrain performance. Employment numbers declined sharply over the two years through 2020-21 for both industries, at an average of 17.4% per year for music and theatre productions and by 11.3% for performing art venues.
‘Most people who worked in the live music sector were left without incomes during the pandemic, which meant their main source of income evaporated. This led them to find employment in other industries or to rely on government support schemes,’ said Mr Kyriakopoulos.
A recent survey commissioned by the Victorian Music Development Office and Victorian Office for Women found that about 58% of respondents have considered leaving the Victorian music industry. Additionally, incomes sources for industry participants have drastically changed. Close to 25.3% of participants now earn three-quarters or more of their income from music-related activities, while prior to the pandemic, 52.4% of participants in the industry earnt three-quarters or more of their incomes from music-related activities.
‘The change in income sources for many participants in the Victorian music industry is a concerning sign that the industry may start to have a lack of skilled workers, constraining its ability to rebound from the pandemic,’ said Mr Kyriakopoulos.
What lies ahead for live music?
Live music is expected to recover from the devastating effects of the pandemic. However, changes in the operating landscape must occur soon. Live music events are anticipated to account for over 60% of the Music and Theatre Productions industry’s operations in 2020-21, with much of this coming from small to medium-sized businesses. A survey conducted by the Australian Live Music Business Council on sole traders and small businesses in March found that approximately 75% will not be operating in six months if current trading conditions do not improve.
‘For the live music industry to successfully recover, capacity constraints at venues need to be lifted urgently, or at least raised to levels similar to other recreational events,’ said Mr Kyriakopoulos.
IBISWorld reports used to develop this release:
- Music and Theatre Productions industry in Australia
- Performing Arts Venues industry in Australia
- Expenditure on Recreation and Culture
- Real Household Discretionary Incomes
For more information, to obtain industry reports, or arrange an interview with an analyst, please contact:
Jason Aravanis
Strategic Media Advisor – IBISWorld Pty Ltd
Tel: 03 9906 3647
Email: mediarelations@ibisworld.com
