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Crisis Management amid a Global Pandemic

Music Industry updates from 3.11.20

March 11, 2020

In the two days since I wrote about the forthcoming festival cancelations, event organizers are one by one pulling the plug. The latest to be either canceled or postponed to later in the year include California’s Coachella and Stagecoach, and Tennesee’s Big Ears Festival.

What can festival organizers and industry stakeholders do to mitigate losses?

Take charge quickly;

Determine the facts;

Tell your story;

Fix the problem.

This is the four-step process for the music industry to prepare for what’s coming, laid out by a corporate communication and reputation management expert for Universal Music Publishing Group and XL Recordings among others. Although I do believe companies can tell a strong story after assessing the facts, I personally don’t think there’s anything that can be done to fix the problem.

That is unless the fourth step is communicating to fans and live music attendees how and when they’ll be compensated. I’d like to see many of these festivals rescheduled to later in the year, but that remains to be seen. Ultra Music fans were given a 30-day period to defer their payments to 2021 or 2022, and would likely be refunded after this grace period if a 2020 postponement doesn’t go as planned. Communicating options for fans to then choose on their own shows goodwill. We’ll see whether or not this is a problem solved.

That doesn’t look likely in certain cases, as SXSW will not be offering any refunds. Consider that many stakeholders for SXSW are losing upwards of some tens to hundreds of thousands for sponsorships and exhibitions in the event. SXSW represents a $335 million ecosystem for the city of Austin, Texas. Digital Music News reported the event organizer was forced to slash a third of its workforce and is in doubt about the 2021 conference.

SXSW CEO Roland Swenson noted the following:

“While his company has insurance, it doesn’t cover disease-related expenses — meaning that losses have swelled, and there’s no prospect of reimbursement on the horizon. Building on this grim reality, Swenson said that he intends to move forward with SXSW 2021, but that finding the resources to prep and execute the mega festival will prove difficult.”

It’s becoming clearer by the day that the necessary precautions to be made for the virus may cause massive losse s for anyone with a stake in live music. France has canceled all events above 1,000 attendees, and Germany has put a ban on anything above 2,000 attendees. More countries will follow. Live Nation’s stock continued to tumble today as the WHO declared COVID-19 a capital-p Pandemic.

Let’s hope for everyone’s sake that there’s more of a silver lining to come out of this situation soon, especially for artists and managers staring at a potential empty spring/summer touring schedule that accounts for the bulk of their annual income.