Jana Arbanas, director, Deloitte & Touche LLP.
Imagine the lights dimming at a concert and excitement filling the air as soon as the first chord hits. For many, live events offer an exhilarating escape for which they are willing to pay good money.
However, behind this enthusiasm, the industry faces significant challenges. Ticket prices on the rise and inflation are straining the live entertainment industry, raising the question of whether “funflation” – where consumers are willing to pay more for live experiences like concerts or sporting events – is beginning. does she reach her limits?
Consumer behavior is changing and the increase in ticket sales post-pandemic is decline as consumers become more selective in their spending, according to a recent study by my organization, Deloitte. The study also reveals that nearly 60% of consumers surveyed skipped a live event they would have liked to attend last year due to high costs. Growing expenses on event production, coupled with the impact of inflation on consumer spending, have created a perfect storm.
Factors such as inconvenient locations, security concerns and lack of interest in live event options also discourage participation, according to surveyed consumers. Many people now prefer the convenience of home entertainment, helped by the rise of ad-supported streaming services.
Charting a new path for live entertainment
Despite these challenges, the live entertainment industry is not doomed. Our survey also found that 61% of U.S. consumers have attended a live event in the past six months. And Allied Market Research estimates that the global live events industry was valued at $652.6 billion in 2022, with projections reaching $1.2 trillion by 2032, representing a compound annual growth rate (CAGR) of 5.9% from 2023 to 2032.
As the live entertainment industry faces challenges, many of those succeeding are creating new, more personalized and flexible relationships with fans. A key element is data-driven personalizationa strategy that helps tailor the fan experience across multiple touchpoints, deepening the quality and quantity of fan connections.
Dynamic pricing strategies, in which ticket prices fluctuate based on demand, can also help maximize revenue while providing more affordable options during quieter times. Sports organizations have often implemented this approach successfully, adjusting match ticket costs based on factors such as rivalries or high-demand matchups.
Sports franchises have also adopted subscription models, which can offer fans benefits such as early access to tickets or exclusive content, helping to drive loyalty and create more consistent revenue streams.
Hybrid events: such as hosting a viewing of a major entertainment artist’s concert or live sporting event in local theaters– can also offer joint experiences at a lower cost, thus reaching a larger audience without the significant overhead costs of large-scale productions.
Looking Ahead: The Future of Live Entertainment
I believe the future of live entertainment looks even more dynamic, driven by technological advancements and social integration. Imagine concerts where virtual reality immerses fans in a digital landscape, allowing them to experience performances from perspectives that might have been previously unimaginable. Fans could navigate 3D environments and interact with digital avatars of their favorite artists.
Artificial intelligence (AI) is also expected to play a central role. personalization experience for each participant. Imagine an AI-powered system that analyzes audience preferences and moods in real time, adjusting setlists, lighting, and even visuals to improve engagement. This level of customization could help enable a more unique and personalized experience.
Social integration could also redefine how audiences connect. Imagine someone has to miss a concert but their friend creates a shared experience that can transcend physical limitations. Through a combination of spatial audio technology, haptic feedback devices and an interactive live streaming platform, guests can still feel connected to the music, the crowd and the artists, even if they are not physically there.
Additionally, there could be an increase in community events where audiences can help curate lineups, vote on setlists, or influence production elements through apps, turning spectators into active participants.
The stage is set
By adopting new approaches, the live entertainment industry can not only maintain its relevance, but also captivate audiences in ways we have yet to fully realize. In an age where digital and live experiences often intertwine, the value of entertainment might lie in its ability to build connections, both between fans and artists, but also between fans themselves.
Events are no longer just performances: they become immersive experiences that can connect people, tapping into the emotional and community aspects that help define what it means to be “live.”
This article contains general information only; Deloitte does not provide accounting, business, financial, investment, legal, tax or other professional advice. Before acting, you should consult a qualified professional.
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