With all the hysteria about global currencies volatility and the trade war with China and the USA, the global markets in the world are going through a bit of a frenzy due to news of another global recession. This is particular to the financial markets with accusations flying around about currencies being either overvalued or undervalued, depending on what each individual country’s (or region in terms of the European Union) agenda is in the global trade arena. With many businesses now plying their trade in the modern global game as either importers or exporters, the situation could adversely affect businesses depending on which on end of the foreign exchange rates is conducive to the particular success of the business. With all that is going on in the global economy, a good question would be how does this affect the music industry?
In the short term, when there’s a global recession or depression, it can usually be a very good thing for music entertainers! Usually when uncertainty looms the tendency “to distract and divert attention” is deployed by governments or businesses, whenever there’s a looming down turn in business or productivity. For example – when companies know that business activity closer to the end of the year will wind down, they then decide that this is the ideal time to have their office parties which involve bringing, food, liquor and entertainment (music). Much as office parties are a genuine gesture of employees thanking their employees, they can also be seen as an anomaly due to the employer “surrendering” to the forces of the market environment. When the festive season hits with all it’s “festivities”, it’s usually a good time of the year for artists as that is when they are at their busiest in terms of bookings. However, musicians can be busy at other times apart from the festive season. For example, when politicians around the world want to campaign elections – a lot of the time they would turn to musicians for endorsements.
In the USA – we have seen artists like Pusha T and Jay Z openly endorsing Hillary Clinton during the presidential elections of 2016. During the time when these prominent artists had tours, they would endorse Mrs Clinton on their social platforms, make special mentions of their favoured candidate during their stage performances and even disparaging the rival candidate. In the context of South Africa, the ruling ANC (African National Congress) party would hold national rallies at stadiums around the country and have a procured list of artists to perform there!
In terms of industries at business level, we have seen media companies make use of artists as of late especially where it has been reported that revenue has dropped for television. Music channels for example have been hit particularly hard due to the internet now dictating primary consumption of music. In response to this we have seen the likes of M-TV and Trace organising more events and concerts, which has afforded artists opportunities for live performance bookings. It will be interesting to see what direction music channels take as a direct result of this. We have also seen sport television companies utilising music performances to gain a bigger audience. For example the NFL (National Football League) has been struggling to get American Football audiences outside the USA, while other sports gained traction for international audiences in recent years. Within the United states this year, there has been more televised games for the NFL and college football (American) with respective musical entertainers taking part at the half-shows etc! Even in the music industry in general, when album sales declined quite sharply in the 2000’s – the record labels then decided to organise more concerts and tours for their artists. There was a hyper activity in concert bookings just over a decade ago, which hugely benefited artists who were already established- albeit just for the time being.
Much as a recession may seem like exciting times for an artist at first look, how ever the principle of diminishing returns can apply over here if the economy doesn’t turn around within a year or two. As an example for artists who become established at national level, the higher the e unemployment rate, the less people will spend on luxury items and services such as entertainment due to the nature of survival! A country like Zimbabwe which currently has limited productivity, high unemployment and a rising inflation rate, would entail artists negotiate less of a booking fee at various points of the year due to lower revenues and the lower purchasing power (as a result of inflation and rising costs). In the case of Neverland Zimbabwe (an annual music festival) that had to cancel the 2018 event due to the unstable economic climate where the Organiser of the event (Jason Le Roux) lamented a number of reasons for the cancellation. The reasons given were the lack of forex available to pay international artists and to import sound equipment, the inability to stock up on refreshments and also the fuel crisis in the country has limited mobility to-and-from the event. Thus depicting the long term implications of an economic bubble, affecting all businesses will also affect entertainers and musicians alike down the line.
Life in general has seasons, meaning that artists specially – things will not always stay seasonally in the “festive”. It is important for artists to bear the changing economic structures in mind over the long term, as to understand how best to avert risk and not to remain stuck when the game switches up on them. An artist may find themselves very busy for the time being, hence why it is always important to stack and always be mindful of what one brings to the table, in terms of value. Once an artist understands their value and understanding their purpose, things tend to move along when transitioning from one cycle to the next.