Livestream Concerts’ Next Step: Consolidation
More than a dozen new companies launched during the pandemic, but as acquisitions pick up the competition is thinning.
A year ago, new concert livestreaming platforms were popping up faster than we could count, each competing for attention in a dog-eat-dog environment. But now, as acquisitions seem to be happening at nearly the same pace, the crowded livestreaming sector has a new motto: If you can’t beat them, join them.
Live Nation led the way in January, taking a majority stake in Joel and Benji Madden’s popular service Veeps. The same month, two-year-old virtual events platform Hopin acquired livestreaming studio StreamYard for $250 million. Over the summer, the shopping spree continued: Music streaming service Deezer acquired a stake in former Sony Music Entertainment executive Thomas Hesse’s platform Dreamstage in May, and two months later, VNUE, a company that records and releases live concert videos, announced plans to acquire the more than decade-old livestreaming company StageIt. In the past month, three more services have been gobbled up, either whole or in part: Tech-first livestreaming service Mandolin acquired indie-focused competitor NoonChorus in late September, and earlier this month, concert ticketing platform DICE bought electronic music live streaming mainstay Boiler Room, while Deezer took another stake in a livestreaming company, this time targeting U.K. startup Driift.
The acquisitions signal that the music industry sees long-term potential in the livestreaming market, where U.S. fans spent a collective $610 million on tickets in 2020. But at the same time, the return of physical touring presents new challenges, and recent studies reflect dwindling livestream viewership.
Most executives viewed consolidation as inevitable. John Petrocelli, CEO and founder of white-label livestreaming company Bulldog DM, points out that many startups have been earning money solely from a fee added to the ticket price or 10% to 15% of ticket sales — making it tough to turn a profit after paying expenses like credit card processing, bandwidth fees and staff payroll. “I don’t know how” these companies were surviving, says Petrocelli, whose nine-year-old company has clients like Spotify and Netflix. “They’d need a lot of venture money to make it.”
Thankfully for some, venture capitalists have continued to pour cash into the livestreaming sector. Maestro, the white-label livestreaming platform which powered Billie Eilish’s Where Do We Go? The Livestream pay-per-view concert last year, raised $15 million in Series B funding in March from investors including Sony Music Entertainment and Twitch co-founder Kevin Lin. Halsey and Kaytranada joined Moment House’s $12 million Series A round in August, supporting the company that has created streams with music video-level production for Tame Impala and Isaiah Rashad since its founding in 2019. And in July, newcomer Flymachine announced $21 million in funding from investors including Red Light Management founder Coran Capshaw and Wasserman Music executive Marty Diamond. (It’s worth noting that Flymachine founder Andrew Dreskin is no stranger to consolidation, having sold his first ticketing company TicketWeb to Ticketmaster in 2000 for a reported $35 million; and his second, Ticketfly, to Pandora in 2015 in a deal worth a reported $450 million in cash and stock.)
Many companies without backing, meanwhile, are looking for new homes. NoonChorus co-founder Andrew Jensen says that his turning point came when the venture-backed companies began bidding on superstars by offering them skyrocketing payment guarantees, even if the company would end up losing money as a result.
“We didn’t raise a single funding dollar, so we just couldn’t take risks like that,” Jensen says, but its buyer, Mandolin, raised a $12 million Series A in June. “We realized we needed to figure out a way to team up with a partner and join forces rather than work against each other competing for the same artists.”
Paradoxically, all this investment in the livestreaming space comes at a time when viewership for virtual events is shrinking. According to MRC Data’s Music 360 report released last month, only 5% of respondents attended a virtual concert in the last year, and only 5% plan to do so in the next year. The top two reasons for not watching were “I choose to spend my time with other forms of entertainment” and “I did not want to pay for a virtual concert.” That’s a nosedive from MRC’s 2020 U.S. year-end report, in which the percentage of respondents who said they were likely to watch a virtual concert in the next two weeks hovered around 35% to 40% throughout the year.
As in-person touring resumes, Petrocelli says that a dip in viewership was expected, and blames botched livestreams for “turning off the general public” to the format. “There were a lot of underwhelming experiences and challenges where shows didn’t make it to the air,” Petrocelli says, such as Marc Anthony’s “Una Noche” stream in April, which crashed due to unexpected last-minute demand. “That has been a little bit of a black eye for the industry.”
Mandolin co-founder and CEO Mary Kay Huse notes that artists and their teams have less time to build the immersive, interactive livestreaming experiences that will turn viewers on to the format now that they’re busy planning in-person tours and juggling ever-shifting restrictions in different states and countries. Mandolin is one of many livestreaming companies promoting the so-called “hybrid model” — where artists offer virtual admission to in-person shows and/or add entirely virtual tour stops — but producing truly live, multi-camera broadcasts with in-person audiences requires a completely different and specialized skillset than the often pre-taped, audience-free sets most platforms are used to. “It’s a whole new series of things to learn,” Huse says.
To help streamline the experience, Mandolin has signed partnerships with City Winery’s network of venues and booking agency Ground Control Touring, whose roster includes Waxahatchee and Parquet Courts. “‘Turnkey’ is a word I hear every day,” Huse says. “We have to make it really easy [for artists’ teams].”
So what are buyers’ plans for their acquisitions? Live Nation, which promotes 40,000 concerts a year, is equipping 60 concert venues across the U.S. like San Francisco’s The Fillmore and Los Angeles’ The Wiltern with livestreaming capabilities through Veeps, allowing artists like NEEDTOBREATHE and Incubus to broadcast their in-person shows online. Mandolin will get an artist relations boost from NoonChorus, a go-to for indie acts like Japanese Breakfast and Angel Olsen, which has hosted more than 650 shows and generated $4 million in artist revenue since its founding in spring 2020. Deezer is eyeing the obvious overlap between audio and video streaming, and it isn’t the first — Spotify partnered with Driift on a series of virtual concerts from artists like Leon Bridges and The Black Keys which kicked off in May. And with its acquisition of Boiler Room, DICE is breaking into the pay-per-view livestreaming market.
Despite the challenges, the wide variety of companies purchasing livestreamers, from ticketing companies to music streaming services, indicates that the industry sees potential in the technology. “There’s market validation all over the place,” says Huse, name-checking Warner Music Group, which is invested in virtual concerts company Wave and is the first major-label partner to Twitch. British record company Beggars Group, which owns labels like 4AD and XL Recordings, is also a minority shareholder in Driift. It’s not hard to imagine a future where every streaming service and music company has a livestreaming arm, and executives predict further consolidation to come.
“Why wouldn’t you have some sort of [livestreaming] strategy?” Petrocelli says. “I would expect a lot more of this from the bigger players.”