Author|Two Thirds Editor | Fan Zhihui
On March 9th, the global capital market staged "Black Monday", and European and American stock markets were a bitter green. In particular, the US stock market triggered a circuit breaker only four minutes after the opening on Monday, which is the second time since October 27, 1997, that the US stock market has triggered a circuit breaker. As of the close of March 9, the three major U.S. stock indexes have fallen more than 7%. Under the influence of multiple factors such as the coronavirus, falling oil prices, and the mid-term election in the United States, stocks have been sold in a large amount, listed companies around the world have been affected, and music companies listed in the United States are also inevitable.
According to MBW statistics, the total market value of Vivendi, the parent company of Universal Music Group, Sony Corp, the parent company of Sony Music Group, Spotify, Tencent Music Entertainment Group, and Live Nation disappeared 111 on March 9th. One hundred million U.S. dollars.
However, the tragic stock market is only caused by the global music industry. One link, the butterfly reaction behind it may be more worthy of attention from all parties.
Generally speaking, companies that focus on music copyrights should be more affected than offline performance companies. The damage should be small, but this does not mean that music giants such as Universal Music Group’s parent company Vivendi, Sony Music Group’s parent company Sony Corp, Spotify, Tencent Music Entertainment Group, and Live Nation have not been affected by the new crown epidemic.
According to data, on March 9, Vivendi, the parent company of Universal Music Group, fell to 21.20 euros at the close, down 7.22%. According to MBW calculations, the market value of Vivendi shrank from 27.54 billion euros to 25.55 billion euros in one day, evaporating about 2 billion euros ($2.3 billion).
In the past 15 days (since the close of trading on February 21), Vivendi’s share price has fallen by 15.67% from 25.14 euros, and its market value has shrunk from 30.30 billion euros to 25.55 billion euros, evaporating 47.5 Billion euros ($5.4 billion).
On the same day, Sony Music Group’s parent company, Sony Group’s The stock price fell to 6,214 yen at the close, down 7.31%. According to Google Finance data and MBW calculations, Sony’s market value fell from approximately 8.53 trillion yen (approximately 83.3 billion U.S. dollars) to 7.91 trillion yen (approximately 77.2 billion U.S. dollars) within a day, a drop of approximately 6.1 billion yen. US dollars. In the past 15 days, Sony’s stock price has fallen 16.91% from 7,479 yen, and its market value has shrunk by approximately US$15.7 billion.
The world’s largest music streaming platform Spotify is not having a good life . Data show that on March 9, Spotify's stock price fell to $139.78 at the close, a 3.69% drop. According to MBW's calculations, Spotify's market value shrank from $26.76 billion to $25.77 billion in one day, evaporating $1 billion. In the past 15 days, Spotify's stock price has fallen from $146.95 to $139.78, a 4.9% drop, and its market value has shrunk by $1.3 billion.
Perhaps because the domestic epidemic has been initially controlled, Tencent Music The entertainment group (ie TME) can be said to have the least loss among the major music giants. On March 9, TME's stock price fell to $11.79 at the close, a 2.32% drop.
According to the calculations of Google Finance and MBW, the market value of TME dropped from 19.74 billion US dollars to 19.280 million U.S. dollars, a reduction of about 460 million U.S. dollars. In the past 15 days, TME’s stock price has fallen by 7.5% from US$12.74, and its market value has shrunk by US$1.6 billion.
There is no doubt that the offline performance service provider Live Nation and The above-mentioned companies have suffered the most damage. Since February 21, Live Nation’s stock price has plunged. Its CEO and chairman Michael Rapino said on the fourth-quarter earnings conference call: “The epidemic may break out in some regions, and we will try to reduce the cancellation of performances as much as possible. Shows.
In the long run, we are confident that some performances will be held as scheduled, box office revenue will continue as usual, and music fans will also appear. "Although this passage makes Live Nation's share price in February There was a rebound on the 28th, but when the market closed on March 6, as the epidemic continued to spread in the United States, Live Nation's stock price had fallen to $53.
After a weekend, the market reopened on March 9 Today, Live Nation's stock price fell 10.76% to 47.26 US dollars. Within a day, its market value fell from 11.37 billion U.S. dollars to 10.14 billion U.S. dollars, a decrease of 1.2 billion U.S. dollars. In the past 15 days, Live Nation's stock price has fallen by 36.3% from $74.19, and its market value has shrunk by $5.8 billion.
In addition to Universal Music and Sony Music, Warner Music, among the three major record companies, which planned to open an IPO in the near future, has also postponed its original IPO plan due to the epidemic. In the reality that listed companies have plummeted all the way, "Rolling Stone" reported that the Warner Music Festival’s postponed IPO may be more optimistic for the company’s owner Access Industries. The most conservative approach is to choose to go public after the epidemic is completely over.
According to MBW reports, since the close on Friday, February 21, the combined market value of Vivendi, Sony Group, TME, Spotify, and Live Nation has fallen by as much as $29.8 billion. The collective decline in the market value of the five major music industry giants is just a microcosm of the global capital crisis.
In China, no matter how large the amount invested in the early stage of the performance, the organizer, for the safety of the audience and performers, Choosing to cancel the performance as early as the outbreak of the epidemic. Similarly, in several countries with more severe epidemics overseas, the government has also intervened in the organization of events.
South Korea, which has the worst outbreak overseas, took measures as early as the 26th of last month. The government raised the epidemic warning to the "serious" level. Large-scale events with more than 1,000 people must develop a response plan and report to the local government, and the government can require the organizer to supplement the response plan or cancel the event based on the difficulty of prevention and control.
Subsequently, the two concerts of the BTS originally scheduled to be cancelled in early and mid-April were announced. If the two concerts are held as scheduled, the audience will reach 200,000. In addition, many large-scale performances and music events such as the Twice concert of the girl group, the concert of the SHINee member Taemin of the boy group SHINee, and the 17th Korea Music Awards ceremony have been announced one after another. Although there are media reports that the variety show, film and television projects in the Korean entertainment circle are still continuing, it seems that offline performances in South Korea have basically been suspended.
Italy is currently the second most severely affected country overseas. In response to the epidemic, Italy has divided the country into three regions based on specific conditions. The "red areas" with the highest risk are the 11 cities and towns that were locked down after the epidemic broke out first (later increased to 12). Prevention and control measures include banning people from entering and exiting, canceling all public activities, and banning gatherings, private meetings, and sports events. , Religion, performances, closed schools, bars and other crowded places. As the epidemic intensifies in Italy, the government plans to ban public activities nationwide and close movie theaters and theaters.
As the epidemic center in Italy is in the northern regions, it is the most economically developed region in Italy. Offline performances in cities such as Milan, Venice, Bologna, Trieste and Turin have all been cancelled. According to foreign media reports, this will cause 10.5 million euros in losses to the Italian live performance industry. Vincenzo Spera, president of the Italian Performance Association Assomusica, said that upstream and downstream industries may face greater challenges.The loss is estimated to be as high as 20 million euros.
Also on February 26, the Japanese government also requested cancellation Or narrow down various cultural and sports activities. According to the news compiled by Oriconnews on February 26, nearly 20 groups of well-known artists, including Kenshi Yonezu, Masaharu Fukuyama, and EXILE, announced the postponement or suspension of their concerts. The well-known South Korean group Super Jonior also announced the cancellation of the Japanese concert on March 6 because of Japan's policy of requiring entry from South Korea to be quarantined for 14 days. The Japanese music group Perfume was forced to cancel the show 90 minutes before the opening of the Tokyo Dome.
On March 7, due to the impact of the epidemic, the United States The City of Austin announced the cancellation of the upcoming SXSW on March 13, which is also the first cancellation of the event in 34 years. Prior to this, Netflix, Amazon, Apple, Facebook, Twitter, TikTok, LinkedIn, IBM and many other leading technology companies and three major records including Universal Music, Sony Music and Warner Music announced the cancellation of the SXSW trip.
In addition, the large-scale music festival Ultra is also constantly cooperating with the government. The cancellation was announced after the game, and it was also the first music festival in the United States to announce the cancellation. Coachella, another well-known music festival, also announced on March 10 that the event would be postponed until autumn. Prior to this, the Inspector V. Manuel Perez of Riverside County, where the music festival was held, said at a press conference: "Residents and tourists in our area should know that the situation is safe." However, just last weekend, the music festival site appeared. 3 confirmed cases.
At present, although the epidemic in Asia is the most serious, the epidemic The speed of overseas diffusion is accelerating. It is not difficult to predict that offline performances in more countries and regions will be cancelled in the next month.
This also means that the global offline performance industry has to face huge losses. In a Forbes report, Mark Halstead, a partner at Red Flag Alert, a financial risk and business intelligence company, believes that the epidemic will cost the global performance market $5 billion.
After the performance is cancelled, not only the performance industry is damaged, it will also cause a series of chain reactions.
At present, in addition to concerts and music festivals, various large-scale events are also announced one after another cancel. In addition to the direct loss of the organizer, the impact of the cancellation of a large-scale event is not limited to the event itself, but will also have varying degrees of collateral impact on the venue.
After years of business development, SXSW has long developed into a large-scale event covering music, film and television, technology, media and other fields. The data released by the Austin government last year showed that the economic benefits of SXSW for the local area were 356 million U.S. dollars, with more than 400,000 people participating, and the revenue from hotel booking alone was 1.9 million U.S. dollars.
After the cancellation of SXSW, in addition to the loss of a large number of job opportunities for practitioners in the music industry, local bars, venues, hotels, restaurants, etc. also expressed disappointment. At present, a company in the Red River District of Austin has launched a crowdfunding goal of US$100,000 to provide financial assistance to artists, venues and organizers in the Red River District.
On March 10th, the economic benefits of the postponed Coachella Music Festival cannot be underestimated. Goldenvoice, the promoter of the festival, said that Coachella usually attracts nearly 100,000 people every day during the six-day period. According to data reported by Allianz Travel Agency, Coachella attracts 46% more air passengers than SXSW, and the number of air passengers it draws is even nearly twice that of Ultra Music Festival. For Indio, Palm Springs, La and the surrounding areas, the tourism economy driven by the Coachella Music Festival is crucial.
However, there are still a number of performances still on the sidelines. It is understood that the European tour of BTS, NCT and other Korean artists from March to April has not been cancelled. Even Austin, which has cancelled SXSW, has kites.More than ten large-scale events such as festivals and city music festivals have not been cancelled.
Music Xiansheng interviewed a friend K who had performed in the United States. He told us: "It is difficult for the United States to cancel these activities." More consideration of costs and benefits. The government also has to take into account the economic benefits that these large-scale events bring to the local area, and it is not so decisive when making decisions.
The reason why overseas organizers are unwilling to cancel the performance immediately is the issue of the terms of the contract regarding the loss of the performance after the cancellation is also a major influencing factor. It can be seen that large-scale events such as SXSW, Ultra, Tomorrowland Winter, etc. were all cancelled or postponed after the government came forward. According to reports from many overseas media, the performance insurance does not involve the category of infectious diseases, which is signed by the organizer and the artist. In most contracts, if the organizer voluntarily cancels the performance, the artist does not need to refund the money; and if the government requests cancellation, the organizer does not need to pay the artist, which is similar to the clause in the performance contract in my country that cancels the performance due to "force majeure".
Previously, Shiina Shiina, a well-known female singer in Japan and the lead singer of Tokyo Incident Ringo issued a statement stating that the "Tokyo Incident" concert will not be canceled, and audiences who cannot be present can choose to refund their tickets, which also takes into account the loss of the cancellation of the performance.
On February 29 and March 1, the Tokyo Incident, which was dissolved for eight years and announced its reorganization, still insisted on holding concerts as usual in Hall A of the Tokyo International Convention Center, which can accommodate 5,000 people. This also allowed the organizer to receive many complaints. Under pressure, on March 4, the Tokyo Incident announced the cancellation of the concert itinerary after the company's official website.
Of course, this approach has also aroused different opinions in the Japanese entertainment circle. The Japanese comedian Kazureza commented on the matter: "I think there is nothing wrong with holding a concert. Most people choose to cancel the show due to the pressure of public opinion, but the deficit will definitely affect future events. In fact, crowdfunding can also be considered. This method of reducing the deficit."
However, putting economic benefits first will not only face pressure from public opinion, but choosing to hold concerts as scheduled will also bring social risks. As early as February 25, there were media reports that a confirmed patient had watched a concert. There was a follow-up report on March 5 that 15 confirmed cases had appeared in the audience of the performance. There were also news reports on March 4 that a cluster of cases occurred in the livehouse in Osaka, Japan, and a cluster of cases caused by watching a concert in New Zealand.
Undoubtedly, due to the gathering of people and space at the performance site Issues such as airtightness, once a confirmed case appears, will cause a large area of infection. But the cancellation of offline performances is no longer just a matter between the organizer, artistes and music fans. Behind the mass cancellation of large-scale events is the decline in economic returns in a region and the disappearance of a large number of jobs.
According to a report in the Financial Times, the epidemic has caused US$211 billion in losses to the entire Asia-Pacific economy, and the music industry is only one part of it. With the increasing number of cancelled performances, it is still unknown whether the losses suffered by the surrounding industries and service industries driven by music performances can be recovered in the second half of the year.
At present, cases in many provinces in China have been "cleared", the domestic epidemic has been clearly controlled, and some offline performance venues have begun to try business . On March 7, the two Shanghai clubs ALL and NINJA announced their business. At the same time, music practitioner Chi Bin also stated on Weibo that "in the near future, we will gradually open the performance market." According to the interview, Modern Sky currently expects to start most projects in June. Overall, the domestic offline performance market is gradually showing an improvement trend.
But at the same time, the epidemic in many overseas countries has just In the early and early stages of the outbreak, the epidemic has not yet been controlled, and there is a tendency to export to the country. An electronic music performance organizer once expressed his concerns in the circle of friends: "Is it only possible to invite domestic ones this year?" Some organizers were optimistic about this report. The K who transferred the business center back to China is already there. From September to December, domestic tours of overseas artists are arranged."
Academician Zhong Nanshan stated on March 9 that the development of the global epidemic is estimated to continue until at least June. In the context of global economic integration, the butterfly effect has become more and more significant. From recording music to audioMusic rights are closely linked to the performance market. How to deal with the impact of the new crown epidemic, for the music industry, may no longer be just a question of US$5 billion in losses.
Typesetting | An Lin
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