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Just Like Being There: The Economics Of Livestreaming Concerts

Will you be watching?
Will you be watching?

Tonight, at 10 P.M., you can see the Dirty Projectors live. They're playing here in town, in support of their just-released new album, Swing Lo Magellan, at Music Hall of Williamsburg. If you didn't get a ticket, or just don't feel like leaving your apartment, you can cruise over to the YouTube home of local internet conglomerate the Bowery Presents (owners of The Bowery Ballroom, the forthcoming Rough Trade Booklyn, and The Music Hall of Williamsburg) and watch the whole thing as it happens, online, broadcast in pretty stunning HD. You'll catch every bit of banter, every wrong note, every silly cover they might throw in near the end, and you'll be seeing it as it happens. It will be just like being there. Right?

If you're skeptical about why anyone would ever want to watch something live on the internet, Max Haot, the charming Gallic CEO of online live video hub LiveStream, has likely heard your argument before.

"When we started LiveStream in 2007," he said recently over the phone, "we would go and pitch to [venture capitalists] and so on, and people really didn't get it. They were like, 'But why would people watch it live? Now with the internet, they can just watch it after.'"

That was then. Today, online video hubs have invested heavily in the concept of live events. YouTube, undeniably the biggest name in online video, is moving forward on multiple fronts in live programming, both as part of the much-publicized original channels initiative, and separately, under its own programming umbrella called YouTube Live, which will this year be broadcasting virtually every major music festival—Bonnaroo, Jazz Fest, and Lollapalooza, to name a few—live, around the clock, right to your computer in truly stunning HD. YouTube's other major competitor, LiveStream, has started its own program, installing remote cameras in music venues around the country, including New York clubs Joe's Pub, SOB's, and the Knitting Factory.

Is live video going to be a major part of the future of online music? Is there an audience for these events? And, perhaps most important, is there any money in it (and to whom is it going)?

Earlier this year, Bowery Presents hosted British rock act Kasabian at their largest New York venue, Terminal 5. It was something of a risky booking: Despite being superstars in Europe and the U.K., Kasabian has been less than successful in the U.S. since their 2004 song "Club Foot" had a brief moment as a movie-trailer favorite. Their latest album, 2011's Velociraptor, failed to chart in America.

But then, America wasn't necessarily the audience for the (admittedly very good and sold out) show—rather, the concert functioned more as a global promotional event for Bowery Presents' YouTube channel, one of about 100 channels of original content from outside producers being rolled out by the online video hub over the past six months. It was just as important for YouTube to show off their ability to stream live events in HD, without lags, glitches, or hopeless pixilation.

In that sense, it was a resounding success. The video was breathtaking, with shots hopscotched between 7 or so camera angles, including one swooping over the crowd on a wire. After about an hour of watching on my laptop, I hooked the feed to my TV, a 42-inch HD, and there was no discernable drop in quality. The video stopped to buffer only twice during Kasabian's nearly two-hour set and resumed too quickly for me to even take a screenshot.

In a large sense, though, the question of the show's success is an open question. "I think because it's so new for all of us that we're going off the metrics for now," says YouTube's West Coast Head Artist Label Relations, Ali Rivera. Instead, many in the business are trying to focus on more intangible benefits: "Buzz in the industry, press, just getting a gauge of what people are enjoying."

 

Bowery Presents is equally cagey. While they won't discuss specific numbers, their General Manager, Jesse Mann chuckles, "We have very high expectations for ourselves." Later, he characterized the views for Bowery's first live streaming show on its YouTube channel, a February show from Sleigh Bells, as "tens of thousands," which he calls "within our target."

LiveStream, for its part, is much more upfront about its viewers, emphasizing itself as an "affordable way for medium-sized artists" to reach a slightly larger audience." While they do broadcast some larger events—Gaot says a Facebook developers' conference drew nearly half a million viewers over two hours—their focus is much more on getting a few more people to see rather small-scale happening. "Let's say [an event owner] has an event for 50 people," he explains, unspooling a hypothetical livestreaming scenario. "They get online 50 or 100 uniques for the event. If you look at it from a TV broadcasting perspective, that's a joke. But for an event owner that has 50 people showing up on site to have maybe 100 people online, that's a big deal. They tripled the event reach."

Talk of "extending the audience" or "amplifying reach" is everywhere in the field of livestreaming, perhaps because most of the money in it remains prospective. Haot acknowledges as much, saying people livestreaming events through his site "won't make money directly" from streaming, but that the extra audience is worth it in brand recognition and possible future business. YouTube, perhaps unsurprisingly, is even less forthcoming about their audience and revenue. Ad money is a priority for them, but they decline to disclose how much revenue live music programming has generated so far, although they do acknowledge it's an "important" metric of success.

Mann, of Bowery presents, confirms that at least some additional payments flow to the artists around the larger-scale live streams. While he won't comment on specific revenue-sharing deals, he says that in addition to their performance fees, the bands are given additional "payments related to things like master sync and licenses and rights and clearance," making it at least possible that live streams of performances will become an option for bands of a certain size to push their tours further into the black.

Not everyone is concerned about the money side. "First and foremost we just get an ultra cool factor," says Ron Strum, the owner of the LiveStream-enabled midtown venue the Iridium, most famous for hosting weekly jam sessions led by electric guitar pioneer Les Paul. "Only good can come of it. It's exciting for people who are actually there seeing it live, and it's exciting for people who want to be there, but can't make it to the club."

 

This gets back to our original question: Why watch something live over the internet? Haot has a illustrative story. "When we do the red carpet of a movie," he explains, "we start the stream even three hours before the red carpet goes, and it's just a camera looking at people setting up a fence and whatever," and yet this is typically when the bulk of the audience tunes in—long before anything's actually happening. They are choosing to watch the boring parts, the parts before and between the main event. Why? "It's about being there," says Haot. "Most people would prefer to be there, right? Whether they're watching a concert or a game, it's not as good as being physically there, but it's the closest thing... The reason people want and are watching a live stream is not because they need a quick summary of what happened. They want to be part of the experience. They want to feel like they are at the event."

In the end, then, it turns out to be fairly simple. People want to feel like they're there, wherever "there" is, without ever having to actually go anywhere. Companies like YouTube and Livestream are happy to give them that illusion if it make some money in the meantime, and the artists and venues are happy for the additional exposure, which comes with a faint promise of future revenue for them as well. The Iridium's Strum sums up this line of thinking neatly, explaining that live streaming "engenders more loyalty, in all of the world. When [people] wanna go see music in New York, they'll probably come to Iridium, because Iridium is how they're watching their music." Should the music-consuming public be happy for another way for artists and labels to prop up their ever-more-shaky business models, especially if it enables the increasingly couch/mobile- device-bound lifestyle of the vast majority of Americans? It's hard to say now, but given the ubiquity of streaming video options and the industry's investment in them, it seems we'll have plenty of time to think about it.

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