Abstract
In this study, we argue that organizers of live music have increasingly been confronted with uncertainty and risk in the pre-pandemic era and that the pandemic has clearly put them under further pressure. At the same time, live music venues and festivals have proven to be largely resilient to the extreme crisis of an ongoing industry lockdown. Also, the sector’s culture of carefully cultivated forms of active (emotive, interrelational) trust to counterbalance these risks has played an important role in the industry’s resilience and its response to both internal and external uncertainties. We base these conclusions on a framework of theories on uncertainty and risk from both business studies and sociology and in-depth interviews with directors of music festivals and venues in the Netherlands, both before the pandemic and after 16 months of lockdown. This study aims to (1) gain insight into how live music entrepreneurs perceived and experienced uncertainty and risk within the context of a rapidly changing music industry and a volatile and unpredictable market of concerts and festivals – both before the pandemic and at the eve of re-opening after a 16-month lockdown and (2) understand what strategies these entrepreneurs employ to manage these uncertainties and risks.
Introduction and research question
In recent years, the live music industry has gone through phases of prosperity and crisis. Until 2020, the sector had experienced a year-over-year growth in both the number of concerts, visitor numbers and revenues (see, e.g., Live Nation, 2020). In the Netherlands, between 2008 and 2019, the annual number of gigs increased both at festivals (+71%) and in venues/clubs (+50%). This growth was relatively evenly distributed between smaller and larger venues (Mulder, 2022a). At that time, the prospects for the following years were equally positive (Live Nation, 2020). Nevertheless, this positive trend was disrupted in March 2020 with a global lockdown of live entertainment and performing arts as a result of the COVID-19 pandemic. This sudden lockdown heralded a unique situation of a global lack of live music for a period of at least several months up to 1.5 years, depending on the country-specific regulations of national governments.
Yet, even before this major crisis caused by the pandemic, the live music industry appeared to be relatively vulnerable. In the cultural and creative sectors (CCSs) in general, and the music industry in particular, the primary value of goods is symbolic and short-lived, embedded in transient signs, idiosyncratic meanings and variant senses of taste and style. Specifically the live popular music market is largely perceived to be volatile, vulnerable and unpredictable. In previous studies, we argued that the live popular music sector is relatively highly dependent on (local) cultural policies (Hitters and Mulder, 2020), on artists and their management (Mulder et al., 2020) and on complex networks of interdependent actors (Mulder et al., 2020). The underlying reasons for the vulnerability in live music are (1) digitalization, with its significant consequences for the music industries in general; (2) an exponential growth and globalization of the live music market, at least until 2020; (3) the strong dependence on artist supply and consumer demand, both becoming less predictable; and (4) neoliberal politics and urban densification and regeneration that have put pressure on urban cultural facilities such as music venues and festival grounds. In terms of revenues, the live music industry strengthened its position as a main source of income within the changing popular music economy, but performing live increasingly requires higher levels of investment and, as a consequence, comes with more risk. This has not only affected performers, but has also had a significant impact on the organizers and promoters of live music events at festivals and music venues. Overall, the live music market has, until the COVID-19 pandemic, been a rapidly growing, commercializing and professionalizing industry as well as an unpredictable business with a high level of uncertainty and low financial margins.
In general, even in times of growth, issues of uncertainty and risk seem to be part of the daily business of organizing live music events. Obviously, the COVID-19 pandemic can be considered as an ultimate form of uncertainty for this sector that is highly dependent on global artists supply, a flexible creative workforce and the physical gathering of (big) audiences. The pandemic can be seen as the ultimate stress test for organizers of live music events, putting pressure on their business model, their internal organization, their professional staff, their partners and networks and their relationship with artists and audiences. After the global outbreak of the pandemic in the early spring of 2020, concerts and music festivals were immediately canceled globally. As a result of the high epidemiological risk of large crowds, the sector has not been allowed to reopen on a regular basis until the local situation was considered relatively safe and in control (Messick, 2021).
The rapid transformation of the music industry and the growing importance of the live music sector have been documented and explained by many scholars (e.g., Frith, 2007; Holt, 2010; Mortimer et al., 2012; Naveed et al., 2017). Nonetheless, detailed analyses of the impact of these changes on conducting business in live music have been scarce, particularly when it comes to perceptions of uncertainty and risk and the strategies required to alleviate them. Within the cultural industries, Banks et al. (2000) suggested that risk and trust in cultural entrepreneurship are counterbalanced, although their research was conducted just before the music industries began to experience the unsettling transformations caused by the digital revolution. Obviously, the disruption of the COVID-19 pandemic affirms the urge for an analysis of the perception of uncertainty and risk in entrepreneurship in live music – and the strategies required to alleviate these risks. Albeit unintended, this pandemic gave us the opportunity to additionally study the ultimate uncertain situation, in order to assess the sustainability of the live music sector in general and of its culture of informal, emotive trust relationships in specific. Consequently, the goal of this study is to gain insights into the perception and experience of uncertainty and risk by live music entrepreneurs, and the strategies they employ to alleviate these risks, within the context of the rapid changes the sector has faced in recent times.
This study will answer the following research questions:
How did the managing directors of pop music venues and festivals perceive uncertainty and risk in the pre-pandemic situation, in relation to staging popular music in the Netherlands against the background of a changing music industry?
What management strategies do they employ during the ultimate uncertainty of a pandemic and how are these strategies embedded in networks of cooperation and trust?
Our research will first investigate the uncertainty and risk perceptions of live music promoters and managing directors, systematically mapping the uncertainties they face in their working practices in the pre-pandemic situation. The analysis will not only interpret these risks in relation to market volatility and the uncertainty of the changing music industry but also as inherent characteristics of the institutionalized, networked and embedded structure of live music ecologies (van der Hoeven et al., 2022). Furthermore, we will demonstrate how executives in this industry have responded to the extremely uncertain period of the COVID-19 lockdown, how important the industry’s long-established relationships and networks of (active, informal) trust are and how resilient these trust networks are during the uncertainty of the pandemic. In doing so, this study aims to contribute to the understanding of entrepreneurship in live music and to gain insights into the resilience of the live music sector.
Although the ecosystem of live music consists of a multitude of actors, this study focuses on the focal point of all live activity, the setting where the performance takes place. In general, two types of live music organizations can be identified: the music venue (or: club) and the music festival (see, e.g. Holt, 2020; Mulder, 2023). Obviously, these two types differ greatly, both strategically and operationally: festivals (often) are large-scale one-off outdoor productions with major logistical challenges; music venues (often) organize a large number of concerts throughout the year for a smaller audience, in many cases with support of (local) government funding. Notwithstanding these differences, in this study we follow the recent literature that assumes precisely the connectedness of the two (e.g. Holt, 2020; Mulder, 2023; van der Hoeven et al., 2022). In fact, the object of this study concerns the live music organization, taking the form of both venues and festivals. Particularly, Holt (2020: 266) emphasizes the similarities between the different forms of live music institutions, referring to their dynamics, functions and processes. He also states that both entities are ‘central to the production and experience of musical performance and [shape] musical performance cultures’ (Holt, 2020: 2). In other words, artist managers deal with both entities in planning the artists touring schedule and visitors make considerations about which concerts and/or festivals to buy tickets for. For this study, we preferred to take into account live music organizations in general, and not just venues or festivals, given the purpose stated in the previous paragraph to analyze both the uncertainty of the changing music industry and the institutionalized, networked and embedded structure of the live music ecosystem. In this ecosystem, venues and festivals are unequivocally strongly linked (Hitters and Winter, 2020; Mulder et al., 2020; van der Hoeven et al., 2022). Also, this approach complements existing studies on uncertainty among artists and promoters as two of the key players in the ecosystem next to the live organizations (e.g., Messick, 2021).
Theoretical context
This study explores how live music organizations perceive issues of uncertainty and risk, as well as the (trust) strategies they use to circumvent them. The classic and generally applied distinction between uncertainty and risk in business and economics has been formulated by Knight (1921). Risk is defined as a situation or change in which the potential outcomes are known and/or calculable and to which probabilities can be assigned based on the information available to agents. In situations of uncertainty, no such information is available and thus the outcome cannot be predicted (see also Beckert, 1996; De Groot and Thurik, 2018). In general, a distinction is made between external (systematic, macro-economic or environmental) and internal (unsystematic, company-specific, organizational) uncertainty and risk (see Dempster, 2006, 2009; Giddens, 1999). Obviously, both uncertainty and risk are inherent to entrepreneurship (e.g. Aspers, 2013; Knight, 1921; Zinn, 2008). In doing business, risk involves constantly calculating both the probability that certain events will occur and the potential losses if they do. However, in modern (institutional) economic theory, risk and uncertainty have become conflated, since uncertainty cannot always be reduced to anticipated risks based on probability calculations. Here, a sociological view can add to our understanding of business practices, since economic actors are embedded in social structures, including norms and institutions, which guide their meaningful actions in situations of uncertainty (Beckert, 1996: 820). Our research thus aims to go beyond a mere analysis of business responses to uncertainty in general, as our belief is that risk and uncertainty (1) have become inherent to our culture and postmodern or liquid society (Bauman, 2000; Beck, 1992), and (2) have a distinctive implication for the CCSs in general and the live music sector in specific.
In the classic business literature, risk is not so much a conceptual or theoretical issue but a given that may increase or decrease and can be calculated, analyzed and subsequently managed and circumvented by rational decisions and actions. In sociology, most notably, Giddens (1994, 1999) and Beck (1992), a critique of that approach is provided by highlighting that a rational and scientific approach is not a solution to risk; it is the cause. Responses to uncertainty and risk are both reflective and cultural in that they depend upon internalized meanings based on the lived experiences of the individual. According to Adams (1995), ‘the cultural filters through which we perceive risk are formed by our experience of dealing with it’ (p.180). In his view, the perception of the probability and magnitude of some future adverse event is shaped by previous experiences and undergoes continuous modification. In exploring his concept of a risk society, Ulrich Beck’s (1992) key hypothesis was that our lives in a late modern society are infused with risk and uncertainty. Key bodies like governments and social institutions have lost their foundations and legitimacy, with individualization and new forms of social bonding being the result. In late modernity, individuals are obsessed with the notion of escaping from the uncertainties of life (Banks et al., 2000).
According to Giddens (1990: 34), risk is strongly related to security, safety and responsibility. He therefore links the idea of risk to his notion of trust: the confidence in the reliability of a person or system that expresses a faith in the probity or love of another. Like uncertainty and risk, trust is considered by many to be an integral part of conducting business (Bohnet and Croson, 2004; Granovetter, 2000; Uzzi, 1997). Risk and trust intertwine and, within particular contexts, calculated risk is balanced by a framework of trust. Active trust is increasingly important within the setting of the globalized and disembedded liquid modern world, with its radical uncertainty (Bauman, 2000). This implies an active and dynamic construction, as well as the preservation of social solidarity within the context of increasing individualization and flexible networks (Banks et al., 2000). Following Giddens (1990), key to active trust are processes of mutual narratives and emotional disclosure.
Möllering (2005) elaborated on this by distinguishing active trust from its rational (based on the perceived trustworthiness of the trustee) and institutional (based on taken-for-grantedness in the trustor’s natural attitude toward social interactions) counterparts, which he does by placing it within the context of a complex, rapidly changing and diversified environment in which there are no defined rules and routines (either rational or institutional); in this setting, actors just interact. This absence of shared rules and the importance of familiarity between actors mean that active trust can be characterized as both informal and pragmatic. Active trust requires actors to continuously and intensively communicate in order to maintain the constitution of their social world. In active trust, the perceived risk should be high in comparison with rational and institutional trust, because of the actor’s awareness of the ambiguous and experimental nature of its trust placements (Möllering, 2005: 29).
Several studies have emphasized the significant levels of uncertainty within the CCSs and more specifically in culture and performing arts, such as De Vany’s (2004) study on extreme uncertainty in the film industry and Dempster’s (2006) work on uncertainty in entrepreneurial performance in the theater industry in the United Kingdom. A significant body of work has focused on the high levels of uncertainty and precariousness among creative workers, especially freelancers and self-employed creatives (Hesmondhalgh and Baker, 2011; McRobbie, 2016), or more specifically on workers in the music industries (Everts et al., 2022; Everts and Haynes, 2021; Tarassi, 2018). Banks et al. (2000) suggested that Beck’s notion of risk and Giddens’ and Möllering’s ideas on active trust are particularly significant in the CCSs: they are embedded within the unique working practices and forms of (dis)organization that are characteristic of – among others – the live music industry. They claim that the ways in which risk is managed and trust is negotiated are embedded in informal contexts, social networks and social spaces, often outside the formal sector. They conclude that formal expert systems (e.g., institutions, structures, services) are ill-equipped to deal with the needs of cultural entrepreneurs, who have their own ways of reducing risk, in most cases based on social networks, informal business clusters, word-of-mouth and even just friendship (Banks et al., 2000: 459; see also Den Butter and Joustra, 2015: 4). Likewise, Ettlinger (2003) stressed the importance of friendship and mutual respect in her study on collaborative workspaces in the cultural economy. She defines trust as an interpersonal phenomenon concerning both social and relational capital, stressing the significance of interpersonal feelings and emotions over inter-firm collaboration. Here, she places the importance of emotive trust (a person’s sentiments about another person) above the importance of capacity trust (a person’s confidence in the capability of another person). Ettlinger (2003) thus characterized emotive trust as a predicator of its capacity counterpart (p. 146).
As described by Banks et al. (2000), the live music sector has a distinct position within the CCSs. Research by Calvo-Soraluze (2016) conducted among the managers of music festivals revealed that trustworthiness was the most important value mentioned, followed by collaborative work and networking. This confirms the findings of Den Butter and Joustra (2015: 6), who emphasized the importance of trustworthiness in the creative and high-velocity electronic dance music (EDM) industry. In their opinion, the skill of adequately assessing the counterpart’s trustworthiness and risk of betrayal is now a key competence for entrepreneurs in the EDM industry. Similarly, Naveed et al.’s (2017) research on the effects of music streaming services on the consumption of live music concluded that the typical complexity of the value chain of live music necessitates the strong trust relationship among the participants of this value chain. Due to the complexity of this specific collaborative cultural environment, they stressed the importance of trust among participating stakeholders. They also proposed a trust-based business model as a strategy for the sustainable development of the CCSs in general, and the music sector in particular. Trust is essential in businesses with dense and complex networks, although none of the authors referred to above explicitly juxtapose it with the increasing risks to, and uncertainties of, the music industry.
In the aftermath of the pandemic that gripped the world in 2020 and 2021, several studies have been published on the impact of COVID-19 on CCSs and, more specifically, its impact on the cultural ecosystem and the role of creative workers therein. These studies highlight that (1) the CCSs were among the worst affected sectors during the pandemic; (2) the cultural ecosystem is very fragmented, including many freelancers, temporary and part-time workers; (3) these cultural workers, freelancers and the self-employed were particularly affected (Banks and O’Connor, 2021; Khlystova et al., 2022); and (4) these groups of workers were often ineligible for governmental support packages (Florida and Seman, 2020). As a result, many freelance workers in the CCSs lost their work and income during the pandemic. This specifically counts for gig economies such as live music, which came to a complete halt during the pandemic (Mulder, 2022b; Santos Viera de Jesus, 2021). At the same time, several studies highlight positive effects of COVID-19 on working in live music: Tanghetti et al. (2022) indicated that COVID-19 triggered a consciousness and collective solidarity among cultural workers that had been previously obstructed due to individualism, perceived pressure of working in the CCSs and the aforementioned fragmentation of the sector; Kimenai et al. (2022) found that the crisis also led to more reflexive thinking by workers in the music ecosystem, leading to an increased awareness of the worker’s position within the ecosystem, and Mulder (2022b) identified strengthened relationships between different actors in the live music ecosystem during the pandemic.
Methodologies
For this study, 23 in-depth interviews were conducted by the first author with managing directors of live music organizations (Table 1a). These interviews were conducted in two different phases: first, before the pandemic, a number of 14 interviews took place between October 2018 and January 2019. The general goal of these interviews was to gain insight into business practices in the field of staging live popular music, with a focus on pop music venues and festivals. Second, another round of interviews took place in the early summer of 2021, almost 1.5 years after the emergence of the pandemic. In this second phase, nine interviews were conducted with different respondents within the same population of venue and festival directors. All respondents were, at the time of the interviews, the managing director of an established popular music venue or festival in the Netherlands. All of them had been in charge for at least 5 years at the time of the interview, ensuring that they had experienced the effects of recent developments in the live music industry. The reason that we chose different respondents for both phases of the study is twofold: first, not all respondents from the first phase were available for an interview in the second phase, for several reasons. Second, in order to meet the goals of this study, we opted to focus the second phase of the field research on venues and festivals that either had been relatively pro-active and innovative during the lockdown or had faced relatively great challenges during the lockdown (e.g., a festival that would have taken place just a week after the announcement of a lockdown). We aimed at including directors from a variety of sizes of venues and festivals, following a commonly used distinction between small, mid-size and large based on visitor capacity (Table 1b). Also, the respondents represented venues and festivals that were geographically distributed across the country. An overview of the respondents is presented in Table 1a. Since respondents were promised anonymity, the cities where the studied venues and festivals are located have been coded. We believe that with this purposive sampling strategy, we are able to present a representative overview of the live music sector in the Netherlands, in line with the aim of our study. The Netherlands has a rich venue and festival landscape, with a high density of good quality venues (Mulder, 2022a; van vugt, 2018) and renowned clubs such as Paradiso (Amsterdam), arena’s such as Ziggo Dome (Amsterdam) and festivals such as Pinkpop (Landgraaf; the world’s longest-running annual pop festival until 2020) and the Eurosonic showcase festival in Groningen, and has also been described as the most festivalized country in the world (Hitters and Mulder, 2020: 42). The live sector has significant economic value in terms of visitor numbers, employment and revenues. In the Netherlands, it is common for pop music venues to receive (local) government funding, which on average account for 24% of the budget (VNPF, 2023). For Dutch pop festivals, it is less common to receive structural government funding.
Overview of respondents.
The managing director of this venue is also at the helm of a (semi-)independently operating pop festival.
Size categories for venues and festivals.
Based on the lower limit used in Fonds Podiumkunsten (2019).
Based on the grouping used by EM Cultuur (2019).
The number of interviews was determined by data saturation. After reaching the saturation point (at the 13th and 8th interviews, respectively), one more interview was conducted in both phases of the research, to ensure that the saturation point had been reached and there was sufficient conceptual depth. The interviews were carried out on an anonymous basis, which enabled the participants to talk freely about sensitive issues like market competition. Following our purposive sampling strategy, maximum variation was achieved by selecting directors from 12 different cities in the Netherlands, from both permanent venues and festivals (12 venue directors, 8 festival directors and 3 at the helm of both a permanent venue and 1 or more (semi-)independently operating festivals) and with variation in the size of the venue/festival.
All the interviews were recorded and transcribed verbatim. This was followed by a thematic analysis of the empirical data (Braun and Clarke, 2006). The coding process was primarily semantic and inductive. Inductive coding was used to identify relevant themes in the dataset. This involved several rounds of both open and axial coding as well as, ultimately, selective coding in relation to the notions of risk and trust and other prominent concepts in the literature. In the text below, respondents are referred to using the codes presented in Table 1a (e.g. VL08), representing (1) the main business unit (festival or venue); (2) the size of this unit (Table 1b); and (3) the number (01–23) to identify the individual respondent. Respondents 01–14 cover the first phase of field research, 15–23 cover the second phase.
Results
Perceptions of uncertainty and risk in the pre-pandemic era
An existing quantitative study on the development of music venues and festivals in the Netherlands shows that these organizations have been performing well in the era preceding the pandemic (Mulder, 2022a). Hundreds of new music festivals entered the market between 2005 and 2019; there was considerable growth in the number of performances in both smaller (<300 capacity) and larger venues; in many cities, new dedicated music venues have been built or existing venues have been renewed; and there seems to be a co-evolution between the emergence and growth of music streaming services and live music revenues (Naveed et al., 2017). This pre-pandemic prosperity did not just apply to the large, commercial venues and festivals. For instance, a director of a small music venue stated in 2019: ‘At the moment things are going really well. We sell a lot of tickets, we manage to book great international artists and the Dutch scene is also doing well. Yeah, I see an upward trend’ (VS02). This particular case supports the outcome of an analysis of Dutch music venues (Mulder, 2023: 98) that there is no conclusive evidence of an increasing pressure on music venues with a capacity of less than 300. Although there is a significant decline in the number of gigs in informal live music spaces such as bars and pubs, this has not affected the development of smaller venues in general. However, it is important to emphasize that this development has not resulted in live music becoming an equal playing field. Several studies highlight different forms of inequality at play in the (live) music industry, such as gender inequality (Berkers et al., 2019; Mulder, 2023) and income inequality (van Andel and Loots, 2022). The latter is reinforced by the fact that the live music sector is largely run on the basis of free labor; volunteers (see, e.g., Gillon, 2019). In fact, research shows that the revenue gap between superstar and emerging artists has even increased in recent decades (e.g., Hesmondhalgh et al., 2021; Krueger, 2019). Despite the growing popularity of live music organizations in the pre-pandemic era, issues related to uncertainty and risk in doing business in live music were frequently mentioned. Without premeditation, all respondents emphasized their concerns about several types of risk they were facing in doing their daily business. Some argued that these risks could seriously harm the sector in the near future. The vast majority of these uncertainties and risks are attached to the specific characteristics of the live music ecology and go beyond the general idea of uncertainty and risk management that is inherent to entrepreneurship. All mentioned uncertainties and risks have been clustered into four main themes at four different levels (Table 2): (1) the influence of uncertainty in society; (2) policies, planning and regulations; (3) competitive environment; and (4) business and finance. Despite differences in risk perception between venues and festivals (e.g., festivals refer more often to the risk of severe weather and venues are more concerned with risks around exploitation), these four categories apply to both forms of live offerings.
Themes of uncertainty and risk in staging live music.
Theme 1: influence of uncertainty in society
Live music organizations face many uncertainties as a result of the increasingly volatile societal and environmental context in which they operate. The vast majority referred to their external context as being increasingly ‘unpredictable’ and ‘unstable’. Despite that these societal uncertainties should, to some extent, be labeled as general entrepreneurial risks (such as the unpredictability of the buying behavior of customers), the respondents emphasized the specific role of societal uncertainty in programming live music. This concerns, for example, the tension between the fact that concerts are increasingly planned far ahead (in some cases 2 years ahead) and the fact that ticket buyers are more unpredictable and buy their tickets later than they used to. Several music festival organizers described facing major threats because their events take place outdoors. Particular emphasis was placed on the possibility of extreme weather conditions, and issues of safety and security (e.g., risk in relation to terrorism and crowd control) which make it difficult to insure their festivals.
In hindsight, a pandemic, as it took hold of the world in 2020 and 2021, can be considered as the ultimate uncertainty in society for the live music sector, but – unsurprisingly at that time – our respondents did not mention this threat.
Theme 2: policies, planning and regulations
Municipal regulations increasingly impose constraints on festivals and permanent venues (see also van der Hoeven and Hitters, 2020). These encompass sound regulation, security, nuisance and environmental issues. Respondents stated that local (and also national) policies lack vision and/or are inconsistent. Some even claimed that there are no serious cultural policies on a local level, and that their local government does not take the live music industry seriously.
One specific aspect of local policy that makes entrepreneurship in live music even riskier concerns licenses and permits. Our participants criticized the way local governments deal with this and complained that the live music business is disadvantaged by relevant regulations. Specifically festival organizers complain about the local licensing policy and the fact that even well-established festivals often still have to wait until the eve of the event before they get their permit: ‘At that time, we’ve already spent half a million Euros. In other businesses, they’d think we’re foolish to work like this’ (FL07). Also, the vast majority of the respondents criticizes the local government’s lack of empathy, communications and long-term strategy.
Government funding differs for music festivals and permanent venues in the Netherlands. Most music venues are funded by national and/or local governments. Public funding for pop music festivals is, however, less common. Nevertheless, our respondents from both venues and festivals identified this funding system as a risk. The most important argument is that the interviewees believe that the funding policy for pop music is unclear, opaque and non-sustainable. Partly because music venues and festivals feel that they are in an unfair competition with the more established cultural sectors, which are ‘very suspicious, afraid to lose their share’ (MF10) and partly because the conditions for funding are unclear and changeable. On a more general level, there is much concern about the sustainability of the cultural supply, particularly in the urban setting which is the focus of this study. Indeed, along with other types of cultural facilities, pop music venues feel threatened by urban renewal, densification and gentrification, with predominantly smaller venues and music festivals facing the risk of losing their current building or location. Venues in the larger Dutch cities specifically mention the fact that the city is increasingly becoming unaffordable, but also in smaller cities the threat of gentrification is topical:
We’ve just lost our building. We actually gentrified ourselves out of it: as a result of our activities (. . .) its market value increased and the prices went up. We haven’t found an alternative yet, so now we’re a music venue without a venue. (VS09)
Theme 3: competitive environment
Live music programming is seen as increasingly risky by our participants. Especially the venues acknowledge the fact that they merely are an intermediary between artists and audience. Yet, the supply (the artists) of the respondents’ core business was stated to be the primary risk factor by interviewees representing both large and small festivals and permanent venues. Most described their situation as very precarious, because live music has become an extreme, and increasingly global, seller’s market (Krueger, 2019; Rosen, 1981), resulting in evermore power in the hands of major artists and their agents. Venues and festivals both emphasize their dependency on ticket-selling artists (‘without an artist on stage our business is valueless’ (VL01)) but at the same time recognize their weakening negotiation position (‘We are nothing but brokers in a sellers’ market. Normally you’d produce more when demand rises, but in our industry that’s impossible’ (VL01)). Due to their scale, music festivals seem to be even more dependent on headliners than dedicated music venues. Increasingly, festivals have adopted blockbuster strategies (Elberse, 2014) as the core of their success. The interviewed festival directors recognize the effectiveness of this strategy, while feeling increasingly vulnerable to the risks of being in a seller’s market.
The fact that live music is becoming a progressively global market increases the risk of being unable to buy enough creative content. All respondents indicate this development toward an increasingly globalizing market, complaining that ‘venues are too dependent on American headliners’ (FL14), that ‘our main competitors are no longer the venues in other Dutch cities, but increasingly venues and festivals in Japan, in Dubai – because they make a better offer than we do’ (FL14) and that international artists nowadays do two or three gigs as part of their Dutch tour, where it used to be a multiple Dutch shows. Also, participants mentioned the growing importance of seasonality (‘the summer season used to last for six weeks, but nowadays it lasts from June to September’ (VS02)), the increasing power of the major international agents and the rise of exclusivity contracts (see, e.g., Hiller, 2014). This concerns agreements initiated by the promoter that do not allow the artist to accept another gig within a certain time period or geographical distance from the gig at the promoter in question:
Even with these smaller acts you see exclusivity deals. It’s annoying. It really bothers me. I think it’s absurd and antisocial. There’s a balance between what’s good for the live [music] organizer and what’s good for the artist, and at the moment that this balance is completely on the side of the festival, you are ignoring the grounds of your existence. (VS02)
Theme 4: business and finance
The interviewees also emphasized several internal risks which, in their experience, go beyond the general risk that comes with entrepreneurship. Primarily, the financing of both venues and festivals was perceived as a major threat. In particular, both require major investment and accumulate sunk costs, with the fees for booking artists and the expense of operating a venue also rising due to growing professionalization and more regulation. As a result, profit margins are usually very small (van der Hoeven et al, 2022). Although both the venue and festival respondents described the financial aspects of their business as very volatile, they both had their own arguments: the venues were predominantly concerned about building operating costs, for instance, stating that ‘Our building is very expensive. It’s got an extremely complex cost structure that’s almost impossible to manage’ (VL08) and ‘we could never break-even in our core business operations. Most of the gigs we book cost us money’ (VL01). Their counterparts from festivals, meanwhile, worried most about the viability of their business: ‘The profit margins are so small as a result of increased costs that we’re continuously walking on a tightrope. It feels like only this [snaps fingers] has to happen and you’re gone’ (FM13).
The live music business environment has also become increasingly volatile, not only because of the previously mentioned complexity of supply and demand, but also because of business operations. Venue owners were concerned about the fact that they will be unable to keep up with high technical standards or expected audience experiences, about the maintenance of their building, and being unable to progress and innovate in accordance with societal developments. The festival directors were mainly concerned about the stability of the networks they depend on and how they can insure their business against increasing risks. Specific concerns were expressed in relation to staff/labor force. Live music entrepreneurs typically operate as lean organizations with an extensive flexible shell of freelancers and volunteers. This is a natural consequence of the production-oriented character of the sector, but it results in a high degree of perceived uncertainty.
The importance of active trust in the pre-pandemic live music sector
The four areas of uncertainty and risk perceived by our interviewees pose a genuine threat to both the sector’s short-term operations and long-term sustainability. As suggested in our theoretical context, such risks are counterbalanced in the CCSs by a framework of trust. Our empirical research not only highlighted a strong presence of experienced sector-specific risks by the entrepreneurs but also revealed that their networks of trust are feeling the burden of globalization, digitalization and, as a result, increasing competition. In particular, the programming of live music seems to be under pressure, according to our interviewees, because of this tough global competition in combination with the sector’s culture of relying on ‘gut feelings’ and ‘just knowing people’.
Consequently, our results underscore the importance of active, and even emotive, trust in the live music sector. Indeed, the vast majority of the comments made about trust by our interviewees can be related to this notion, probably as a result of the high perceived risk (Möllering, 2005). Particularly because these respondents directly refer to the informal, unconventional setting (e.g., ‘at the bar’) in which their relations are built and maintained, endorsing Ettlinger’s (2003: 156) statement that emotive trust relations are mainly formed in informal, non-work-related spheres and based on common experiences and feelings, while capacity trust relations are settled in more formalized, workplace type of settings. This is reflected in the emphasis that the respondents placed on informal social networks, meeting each other regularly, mutual support and friendships. As a consequence, they implied that their trust relationships must be regularly maintained and confirmed (and, in that sense, they are truly relational):
Everybody knows each other. (. . .) Once you’re in [the scene] for a while you can call all these guys; also because you meet them all frequently: At the Eurosonic Conference, at the clubs. (. . .) In general, everybody respects one another. You support each other. (FL07)
Another trust issue highlighted was the relationship between live music organizers and local governments, a relationship that is predominantly based on institutional trust but partly also on informal trust. Several respondents were worried about their relationship with local government. They often felt not taken seriously, due to a lack of knowledge and understanding, as well as the perceived inability of government institutions to recognize the risks of being in the live music business and act accordingly. Our outcomes substantiate the argument by Banks et al. (2000) that formal expert systems are ill-equipped to deal with the needs of cultural entrepreneurs.
Active trust relations as responses to uncertainty during the pandemic
One year after the initial data collection for this study, COVID-19 put the global live music sector under heavy pressure. In the Netherlands, where this study was conducted, the government locked down all cultural venues and festivals from March 2020 to March 2022. During these years, cultural venues were allowed to program small-scale gigs, up to 30 visitors, in summer. Regular music festivals had been banned for this whole period, apart from some small, restricted exceptions during summer. We conducted our second round of interviews in the summer of 2021, 16 months after the start of the lockdown, when most venues were planning for a reopening from September 2021 onwards and most festivals were aiming at the 2022 festival season. During our field research, most live music activities were still banned, although small-scale performances with a seated audience were allowed.
Although during the initial research phase in 2018–2019, none of the respondents named a pandemic as a potential risk for the live sector, it is evident that COVID-19 has led to a very high level of uncertainty within the entire live music ecosystem. Indisputably, the pandemic has posed major challenges to the whole sector. Consequently, since the COVID-19 outbreak, many studies have been published to assess its impact on the already precarious sector, which is largely made up of freelancers and volunteers. On this theme, the results of our empirical research during the pandemic confirm the studies we referred to in the theoretical section above. Here, our contribution lies in the fact that the pandemic confirmed the theoretical assumption we formulated above that uncertainty cannot always be reduced to anticipated risks based on probability calculations and that a sociological analysis of how the industry deals with and responds to that pandemic has added value compared to a business analysis of uncertainty itself. Therefore, and in accordance with the second research question we formulated, in our analysis of the research phase during the pandemic we specifically focus on the responses of organizers of live music to the extreme uncertainty of the pandemic and the role of networks of trust in these actions.
At the time this second round of interviews was conducted, all respondents – both venues and festivals – were convinced that they would survive the crisis caused by COVID-19. The foremost mentioned reason is the fact that both the national and local government provided sufficient bail-outs. Although some respondents criticize the process and communication concerning this emergency funding, all emphasize the importance of this for their survival. Many of them do stress, however, that these emergency packages did not sufficiently match the character of the live music ecosystem. Several respondents criticized, for instance, the premise that the emergency support to institutions such as pop venues was to trickle down to artists and freelancers. Although the venues and festivals made efforts to trickle down part of their funding to other parties in the network, such as artists, most of them acknowledge that their success was very limited. Altogether, our respondents have experienced the lockdown period as extremely uncertain, unpredictable, stressful and disrupting. Some of the larger and more commercial venues and festivals even had to lay off staff during the crisis. Unsurprisingly, the pandemic was largely perceived as an extreme external risk to live music in all its aspects.
The aim of this second phase of data collection was to analyze strategies that live music entrepreneurs employed to manage the uncertainties of a pandemic and how these strategies are embedded in networks of trust. Given the context of this study, in doing so we have focused in our empirical study on the sustainability of informal trust relationships, rather than institutional trust vis-à-vis the government, for example. We signal that the active, informal trust relations that characterize the sector, as a response to the high amount of perceived risk, are sustainable and form a key element in the business strategies that have been applied during the crisis. We found five indicators to substantiate this claim: First, the interviewees acknowledged the power and sustainability of the informal networks within the live music ecology. In general, they believed that these networks have tightened during the lockdown of their businesses. Especially in the case of a pandemic, active trust is important, validating Möllering’s claim that this form of trust gains importance in a complex, rapidly changing environment with a high level of perceived risk and in a situation without established rules and routines to rely on. During the lockdown, venues and festivals invested in the preservation and reconfirmation of these informal, emotive networks in the form of, for example, ‘a lot of coffee dates with our partners and suppliers, just to monitor how they were doing’ (FL15) and ‘just making phone calls to all these people and asking them how they were doing. (. . .) This sector is about awarding each other something’ (VL22). Another respondent emphasized that a lot of cooperation in the live music sector is based on blind faith and that this goodwill factor has become even more important during the lockdown (FM17). This relates to the second indicator: the strong sense of mutual responsibility within the live music ecology. Pop venues and festivals experience this mutual responsibility in relation to their business partners, freelancers, artists, funders and their visitors. This is also the most important reason for most venues and festivals to produce live music shows even during a lockdown. They felt the urge to take responsibility especially for the artists and for their flexible workforce, as these self-employed workers were not eligible for most of the COVID-19 emergency funds. The third confirmation of the sustainability of trust relations can be found in the perceived solidarity, both within and with the live music sector. Exemplary was the general perception that the national industry association for pop music venues and festivals (VNPF) has become more important and played a key role in guiding the venues and festivals through the crisis. Also, increasing solidarity with the venues and festivals from outside the sector was regularly mentioned. Several respondents emphasized the changing role of the local government during the crisis: in most cities, a combination of institutional, rational and active trust became more important in the relationship between live music organizations and local governments:
We’ve experienced a lot of leniency from the municipality. Normally we have to (. . .) justify every euro we spend, but during this crisis they just gave us an amount of money in order to create and produce anything we could during a lockdown, without further ado. (VS21)
Fourth, we found a high level of what we call a missionary urge among our respondents. Live music entrepreneurs can be characterized as very passionate, prioritizing the cultural (artistic) value of live music over its economic value (see also Mulder, 2022b; van der Hoeven et al., 2022). During this crisis of global magnitude, live music organizers experienced an even greater urge to provide and curate artistic content than they regularly do:
Despite the lockdown we decided that we still wanted to have a festival. Our festival is a lifebelt for our community during this crisis and we want the festival to be a lifebelt for artists and the industry as well. I think the online, lockdown edition of our festival has been a beacon of hope and creativity. (FM20)
The fifth and final indicator concerns the perceived resilience and innovativeness of the live music ecology. This is confirmed by the great amount of new concepts that have been developed during the lockdown (either with existing or new business partners), by the strong belief that the important workforce of freelancers and volunteers will return after the lockdown, by the strong willingness of both management and staff of live music organizations to overcome complexities and by the natural flexibility and adaptability of the live music ecology in general.
Conclusion and discussion
In the first decade of the 21st century, Banks et al. (2000), De Vany (2004) and Dempster (2006, 2009) highlighted the significance of risk and trust to the cultural and creative industries, including the live music sector. From then we have entered the age of music streaming, markets have globalized and competition within live music has increased. As a result, organizers of live music are increasingly confronted with uncertainty and risk. This goes beyond the mere uncertainty that is common in any commercial enterprise, because (1) the transience of the live music sector makes it more sensitive and receptive to risk than other industries: the supply (and so the business value) is temporal and short-lived, especially in the case of festivals; (2) the live music organizations are intermediaries between artists and audience; (3) the live music sector operates through large international corporations as well as a multitude of small not-for-profit organizations, while also depending on a large precarious workforce of freelancers, self-employed workers and volunteers; and (4) the industry is more vulnerable due to a combination of live music being a seller’s market, in which supply is characterized by the imperfection of substitutes (Krueger, 2019; Rosen, 1981), and the increasing unpredictability of audiences. Live music entrepreneurs operate in a very unstable environment, facing similar phenomena to those described as a risk society by Beck (1992) and Giddens (1994): the digitalization and globalization of the music industry have changed this industry in general and the relationship with governments and other institutions has become more complex. Nevertheless, risk is – and has always been – an integral part of the live music industry. Indeed, Elberse (2014) argued that taking big risks is the most promising future business strategy for the entertainment sectors, exactly because of the factors mentioned above. The transience of the supply in combination with the fact that it is an extreme sellers’ market denotes the importance of taking big risks in an increasingly winner-takes-all market.
Following our inductive thematic analysis, in our conclusion, there is a common perception (both in the contexts of venues and festivals) of four types of uncertainty and risk, being both external/systematic and internal/unsystematic (Dempster, 2009). Although the live music sector has always been susceptible to uncertainty, our study shows that this has worsened (even in the era prior to the COVID-19 pandemic) as a result of developments at all four presented levels. At the same time, external factors like regulations and legislation do not seem to be keeping pace with these developments. In general, we conclude that organizers of live music are highly vulnerable to external risk and also increasingly vulnerable to internal risk.
Like the notion of a risk society, today’s institutions and rational managerial approaches are no longer adequate or useful in the live music industry. Consequently, the organizers of live music attempt to mitigate the risks they face by relying on long-established relationships and networks of trust, as well as unwritten rules and norms. Here, we build on Giddens, who states that (1) the commonality of risk can, and should, be countered by new and dynamic mechanisms of trust; (2) new relationships of active trust should include a process of mutual narratives and emotional disclosure (Banks et al., 2000: 457); and (3) active trust makes it possible to maintain trust, even in a rapidly changing context (Möllering, 2005: 32).
This study substantiates the importance of active, emotive trust in the live music sector as a result of (1) the importance of non-economic values in the live music sector, (2) the complex and tight networks in which live music organizations operate (e.g. their position in relation to suppliers, freelancers and other companies/workers) and its consequent mutual dependency and (3) the fact that live music organizations operate as lean, flat and flexible businesses. Although respondents expressed their worries about the continuity of trust in the sustainability of existing inter-firm collaboration (as a result of the globalization and digitalization of the music industry) prior to the COVID-19 lockdown, we conclude after the second phase of our data collection that this culture of active trust is of pivotal importance to the resilience of the sector, especially in the case of the extreme uncertainty of an ongoing lockdown. The strength of trust relations can be perceived as the product of previous informal mutual investments in the collaborative networks of live music organizers, suppliers, flexible workers, artists managers and promoters. In this study, we found a strong degree of mutual responsibility among the different actors within the live music ecosystem during the pandemic. This adds to the existing literature on the CCSs in general and the live music sector in specific, that in this sector, active, informal trust relations to a certain extent counterbalance the uncertainty and precariousness that is characteristic of live music. We also conclude that during times of severe crisis such as a pandemic, these informal trust relations persist and contribute to the resilience of the sector. Our outcomes support Ettlinger’s (2003) notion that emotive trust is important as a predicator of capacity trust in creative networks: in the live music sector, personal sentiments predominate confidence in capability. This implies that active trust goes beyond ideas of embedded ties (Granovetter, 1973; Uzzi, 1997) and untraded dependencies (Pratt, 2000) in inter-firm networks: the live music industry relies less on institutionalized inter-firm trust and more on interpersonal and inter-relational versions of trust, even in times of a major crisis like a pandemic. Furthermore, it must be emphasized that the typical elements of active trust have become an integral part of the culture of the live music industry, and are widely and proudly cultivated by its members. At the same time, even before the 2020 lockdown, entrepreneurs experience that their active trust networks may be under pressure as a result of the globalization of the industry, new entrants on the market and a changing business culture. Finally, it is important to note that our empirical research on informal, emotive trust relationships also highlights its drawbacks, particularly in terms of equality and inclusion. Indeed, it is questionable to what extent the culture of ‘knowing each other’, ‘just giving the guys a call’ and ‘closing deals at the bar during a gig’ contributes to structural changes in terms of countering exclusion and being open to newcomers in the sector. Based on Ettlinger’s (2003: 146) thesis that capacity trust is predicated on emotional trust, the typical culture of the live sector seems to imply that capacity trust is reserved for people in the inner circle.
This study adds to what is known about the perception of risk in the CCSs and more specifically in the live music industry, and the importance of active trust as a response. By our two-phase approach of collecting empirical data both in times of prosperity and crisis, we managed to analyze the perception of uncertainty and risk in a regular business situation as well as the strength of the informal trust relationships under the pressure of a global (live music) crisis. The research contributes to a better understanding of doing business in live music within the context of a volatile and rapidly changing music industry. It also supports the conclusion reached by Banks et al. (2000) that active trust is particularly significant to the CCSs, and is often negotiated outside the formal business. In addition, this article emphasizes the particularity of the live music sector, where risk is even more inherent to entrepreneurship than in other sectors within the CCSs and where a culture of active, emotive trust demonstrably contributes to the resilience of the sector. For entrepreneurs in live music, it is important to better understand the importance of these informal ties, in order to remain resilient in the rapidly changing, globalizing live music industry.
Finally, further research is recommended to (1) analyze how active trust operates in the work practices of the live music sector compared to other CCSs; (2) achieve greater insight into the effect of the digitalization and globalization of the music industry on the perceptions of risk and trust by entrepreneurs in this sector; (3) monitor the strategies of the live music sector in the post-pandemic years, including the position of freelance and employed creative workers; and (4) monitor the strength of the informal networks in live music in the aftermath of the COVID-19 pandemic.
Footnotes
Acknowledgements
We would like to thank all respondents who participated in this study. We are very grateful for the willingness to contribute, even in times of crisis management during a lockdown. We would also like to thank Dr. Paul Rutten for his support during this research project.
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) disclosed receipt of the following financial support for the research, authorship and/or publication of this article: This work was supported as part of the project Staging Popular Music: Researching Sustainable Live Music Ecologies for Artists, Music Venues and Cities (POPLIVE) by the Netherlands Organisation for Scientific Research (NWO) and the Taskforce for Applied Research (NRPO-SIA) (grant number 314-99-202, research program Smart Culture – Arts and Culture). Partners in this project are Mojo Concerts and The Association of Dutch Pop Music Venues and Festivals (VNPF).
Data availability statement
Data sharing not applicable to this article as no datasets were generated or analyzed during the current study.
