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In recent years, the music industry has undergone a profound transformation, with live performances becoming increasingly central to artists’ revenue streams. This shift has given rise to the “Concert Economy,” where live music events play a crucial role in an artist’s financial success. This change is especially evident in the rise of Afrobeats, a genre that has significantly impacted the global concert economy.

The Decline of Physical Sales and the Streaming Era

The music industry has shifted dramatically from physical album sales to digital streaming. According to the International Federation of the Phonographic Industry (IFPI), global physical album sales fell in the last 25 years (1999 to 2023) by over 77%, while digital streaming revenue grew to account for nearly 67.3% of global recorded music revenue by 2023 (IFPI, 2024).

Global recorded music industry revenues 1999-2023 (US$ billion)

Source: IFPI Global Music Report 2023

In the ninth year of consecutive growth, the revenues in 2023 unequivocally showcased a flourishing global and diverse industry. Revenue surged in every region and across nearly every recorded music format, with streaming revenues commanding the lion’s share of the growth and total market share.

Global recorded music revenues by segment 2023

Source: IFPI Global Music Report 2023

The partnership between record companies and artists continues to define and shape music in all its extraordinary forms. This partnership is at the heart of the continued growth of music markets worldwide. Record companies are investing US$7.1 billion annually in Artists & Repertoire and marketing alone, powering artists and their careers and connecting fans and music communities from all over the world. The globally connected nature of today’s music ecosystem is now well established. Almost anywhere in the world, fans can enjoy a rich, diverse mix of music; whether from their very own, very local music cultures, or something that has travelled across the world, brought to them by the networks and infrastructure of interconnected record companies. This globalization of music industry was proven as after Miley Cyrus’ “Flowers”, Rema’s song “Calm Down” claims the no. 2 spot on the IFPI global single chart 2023 after recording 1.89 billion global subscription streams equivalent.

Despite the global reach of streaming platforms, the per-stream payouts to artists are significantly lower than the revenue from physical album sales. This economic reality has driven many artists, particularly those in genres like Afrobeats, to focus on live performances as a key revenue stream.

The Concert Boom: A New Revenue Model

The concert economy is marked by a growing demand for live music experiences. With declining physical and digital music sales, artists and industry professionals are increasingly relying on concerts, festivals, and tours for revenue. According to PwC’s Global Entertainment & Media Outlook, the live music sector is projected to grow to US$31 billion by 2026, up from US$24 billion in 2022.

Key Drivers of the Concert Economy:

1. Increased Demand for Live Experiences: Live Nation reported that in 2023, over 500 million fans attended live music events, a 10% increase from 2022.
2. Diversification of Revenue Streams: Merchandise sales at concerts contributed approximately 15% of an artist’s income in 2023, with VIP packages and exclusive experiences accounting for another 10% (Billboard, 2023).
3. Globalization of Music: The number of international tours increased by 35% over the past decade, according to (MMF, 2023).
4. Rise of Music Festivals: The global music festival market was valued at USD$3.4 billion in 2023 and is expected to grow at a CAGR of 7.4% through 2027, driven by major events like Coachella, Glastonbury, and Afro Nation (PwC, 2023).

Afrobeats: A Driving Force in the Concert Economy

Afrobeats has become a major force in the concert economy, significantly expanding its international fan base and generating substantial revenue from live performances. The first quarter of 2024 confirmed U.S. show count for Afrobeats up 400% and Latin up approximately 40% year-on-year, with similar trends in Europe (Live Nation, 2024).

Afrobeats Growth in Concert Attendance and Revenue:

1. Burna Boy’s “Love, Damini” World Tour: Burna Boy’s tour, supporting his album “Love, Damini,” attracted over 600,000 attendees across 12 countries in 2023. The tour generated approximately US$40 million in revenue, with notable performances including a sold-out show at the O2 Arena in London, which alone brought in around US$10 million (Pollstar, 2023).
2. Wizkid’s “Made in Lagos” Tour: Wizkid’s tour for his album “Made in Lagos” grossed over US$25 million. Highlights include three sold-out nights at the O2 Arena in London, contributing approximately US$5 million in ticket sales. The tour’s revenue was further enhanced by strong merchandise sales and VIP packages (Billboard, 2023).
3. Davido’s “Not Available” Album Tour: Davido’s tour for his album “Not Available” generated an estimated US$10 million in revenue. Key highlights include:

- Accra Sports Stadium, Ghana: A sold-out show attended by 50,000 fans, generating around US$2.5 million.

- European Leg: Included performances in major cities like London, Paris, and Amsterdam, collectively drawing around 80,000 attendees and generating approximately US$5 million.

- North American Tour: With stops in cities like New York and Los Angeles, this segment alone brought in around US$2.5 million.

- Merchandise Sales: Contributed an additional US$1 million, driven by high demand for exclusive items (MMF, 2023).

4. Rema’s “Rave & Roses” Tour: Rema’s tour for his album “Rave & Roses” generated around US$7 million. The New York show alone contributed about US$2.5 million, while the European leg, which included London and Amsterdam, added approximately US$4.5 million. Merchandise and VIP packages further boosted revenue (Billboard, 2023).
5. Tiwa Savage’s “Water & Garri” Tour: Tiwa Savage’s tour supporting her EP “Water & Garri” made significant strides in the Afrobeats concert scene. Her tour, which included stops in Lagos, New York, London, and Paris, attracted approximately 150,000 fans across multiple continents and generated about US$8 million in revenue. Key highlights include:

- London O2 Arena: A sold-out show with an estimated revenue of US$3 million.

- New York’s Apollo Theater: Contributed approximately US$2 million.

- Paris Concert: Generated around US$1.5 million.

- Merchandise and VIP Packages: Added approximately US$1.5 million to the overall revenue (Pollstar, 2023).

6. Asake’s “Mr. Money with the Vibe” Tour: Asake’s debut tour, promoting his album “Mr. Money with the Vibe,” saw tremendous success across Africa, Europe, and North America, with a total revenue of approximately US$5 million. Key performances included:

- O2 Academy Brixton, London: A sold-out show that generated about US$1 million.

- Multiple U.S. Locations: Shows in New York, Los Angeles, and Houston attracted large crowds and generated US$2 million collectively.

- African Leg: Concerts in Lagos, Accra, and Johannesburg brought in an additional US$2 million in revenue (Billboard, 2023).

Economic Growth and Development Effects on Concert Hosting Countries

Hosting major concerts and festivals can have significant economic effects on the countries involved. The influx of fans, artists, and production teams stimulates various sectors and contributes to overall economic growth. The growth of the concert economy, particularly driven by the rise of Afrobeats, has had significant positive economic impacts on countries hosting these events.

Positive Economic Impacts:

1. Hospitality and Tourism Boost: Concerts draw both local and international visitors who spend on travel, accommodation, food, and local attractions. For example, Burna Boy’s 2023 concert at the O2 Arena in London generated an estimated US$10 million in economic activity for the city (Live Nation, 2023).
2. Job Creation: Large-scale events create jobs in event management, security, catering, and transportation. For instance, Tiwa Savage’s tour involved numerous local staff in cities like London and Paris, creating temporary employment opportunities.
3. Increased Local Business Revenue: International tours by Afrobeats artists draw tourists to host cities, enhancing tourism revenue. Hotels, restaurants, and local shops experience increased patronage during major events. For instance, Afro Nation Portugal 2023 attracted over 40,000 attendees, contributing approximately US$15 million to the local economy in hotel bookings, transportation, and local attractions (MMF, 2023). While Wizkid’s “Made in Lagos” tour in London led to a noticeable rise in business for local hospitality providers.
4. Infrastructure Development: Hosting major concerts can lead to improvements in local infrastructure. Cities that regularly host large events often invest in better venues and transportation systems, benefiting residents and future events alike.
5. Cultural Exchange and Branding: Hosting international artists and events enhances the global cultural profile of cities, branding them as cultural hubs. This, in turn, attracts further investment in the creative industries and boosts local pride.
6. Event Production Companies: Increased demand for high-quality stage designs and performances has driven a 12% revenue increase in the event production sector in 2023 (PwC, 2023).
7. Merchandising and Branding: Merchandise sales at Afrobeats concerts have surged, with some artists earning as much from merchandise as from ticket sales. Wizkid’s “Made in Lagos” tour merchandise sold out in multiple cities (Billboard, 2023).
8. Technology and Streaming: Virtual concerts and live-streamed performances, particularly during the pandemic, became crucial revenue streams for Afrobeats artists, with some virtual events attracting millions of viewers globally (Pollstar, 2023).

Potential Challenges:

While the concert economy offers new opportunities, it faces several challenges:

1. Environmental Impact: Large concerts and festivals can strain local resources and generate significant waste. The carbon footprint associated with international tours and large-scale events is a growing concern. Some Afrobeats artists, like Burna Boy, are taking steps to reduce their tours’ environmental impact.
2. Overtourism: High volumes of visitors can lead to overcrowding and strain on local infrastructure, impacting the quality of life for residents. Cities like London have faced challenges related to managing large crowds during major events.
3. Economic Disparities: While major events boost local economies, the benefits may not be evenly distributed. Small businesses and lower-income communities might not see proportional benefits compared to larger, more established enterprises.

The Future of the Concert Economy with Afrobeats

The future of the concert economy, with Afrobeats at its core, is bright and dynamic. The genre’s growth is set to continue as artists embrace new markets, technologies, and innovative revenue streams while maintaining a commitment to cultural authenticity. As Afrobeats continues to shape and influence global music trends, its impact on the concert economy will be profound, fostering a new era of growth, creativity, and cultural exchange in the global music industry.

Afrobeats is not just music; it is a cultural movement that promises to redefine live music experiences for years to come.

1. Virtual and Hybrid Concerts: Afrobeats artists are leading in integrating digital platforms with live performances, potentially setting industry trends.
2. Sustainability Initiatives: The industry may adopt more sustainable practices, particularly in Afrobeats, as artists and promoters become increasingly aware of their environmental footprint (MMF, 2023).
3. Cultural Preservation: As Afrobeats expands globally, there is a focus on preserving the genre’s cultural roots while continuing to innovate and reach new audiences.
4. Expansion into New Markets: The success of Afrobeats in North America and Europe is setting the stage for expansion into new regions, including Asia, Latin America, and the Middle East.
5. Monetization Through Diversified Revenue Streams: Afrobeats artists are pioneering new ways to monetize their music beyond traditional concert ticket sales – e.g exclusive merchandise, content creation and digital monetization, NFTs and blockchain technology.
6. Technological Innovations - Enhancing Fan Engagement: The future of Afrobeats concerts will be marked by innovations aimed at enhancing fan engagement and improving the overall concert experience through AI and data analytics, fan interaction tools, augmented reality, and virtual reality experiences.

Conclusion

The concert economy signifies a major shift in the music industry’s revenue model, driven by the decline of album sales and the increasing demand for live experiences. The rise of Afrobeats has added a new dimension to this economy, bringing African music and culture to the global stage. With ongoing growth and innovation, Afrobeats is set to play a pivotal role in shaping the future of live music, fostering cross-cultural connections, and driving economic growth in the concert economy.

Photo source: PxHere.

References

1. IFPI. (2024). Global Music Report 2024. International Federation of the Phonographic Industry.
2. PwC. (2023). Global Entertainment & Media Outlook 2023–2027. PricewaterhouseCoopers.
3. Live Nation Entertainment. (2023). Live Music Industry Annual Report 2023.
4. Live Nation Entertainment. (2024) Live Nation Entertainment Reports Q1 2024 Results
5. Music Managers Forum (MMF). (2023). Afrobeats Concert Economy Report 2023.
6. Pollstar. (2023). Top 100 Tours of 2023.
7. Billboard. (2023). Concerts and Tours: Afrobeats in 2023.