Our Submission to the Inquiry Into Australia's Live Music Industry

The Australian live music industry needs a government-sponsored innovation support framework to meet its challenges.

Usual Company welcomes the opportunity to make this submission to the Federal Government’s Inquiry into the Australian Live Music Industry. We make this submission to encourage an industry-wide conversation about the importance of incentives and support frameworks to drive live music innovation.

We are a small business dedicated to accelerating the next wave of innovation in the Australian entertainment industry by connecting tech start-ups from across the globe with venue and festival operators. We established this business because we recognised that there is currently an absence of any publicly funded innovation framework or ecosystem that supports venue owners and festival operators to evolve their business models and product offerings. Conversely, start-up companies in the tech sector do not typically have music industry relationships, so the connections we are helping them make accelerates their efforts to take products to market, products that could have a transformational impact on the efficiency, profitability, accessibility and market appeal of Australia’s entire entertainment and events sector.

Grant funding programs at the Federal, State and Local level have been integral to helping the live music industry survive the long tail of COVID-19’s economic impacts but do nothing to incentivise innovation within the live music sector. Although it did support some experimentation in the sector during COVID, most of the RISE fund went towards sustaining existing live music activity. As we emerge from the shadows of COVID-19, a shift in policy focus is now required to enable a more future-oriented industry. Music Australia should review how its resources can be used to incentivise innovation behaviours within the live music sector. We believe that continuing to bail out commercial live music operators with grants is a poor use of taxpayer funds and should not be considered part of Music Australia’s remit. This is because the live music market in Australia has reached a point of saturation and maturity that demands the industry now evolves to accommodate technological, social and economic realities that are profoundly different to those in which the dominant existing models of live music experiences emerged. 

Unfortunately, investment in research and development is not the norm in the Australian live music sector. Entertainment companies globally spend somewhere between 1 and 3 percent on research and development, which is well below the benchmark across all sectors. Almost all operators in the Australian live music space spend nothing on this activity. This is due to shrinking profit margins and the reality that independent live music promoters sometimes do not have the level of business education and experience that would help them understand the importance of investment in their own R&D. Event promoters are paradoxically highly risk-averse and risk-tolerant at the same time, insofar as that promoting live events is commercially very risky and therefore promoters often tend to stick with formulaic/tried and true approaches as a risk-mitigation approach. Government’s role from a policy and funding perspective is so important to encouraging innovation in live music because, in the absence of incentivisation, promoters will continue to behave in the ways they feel will protect their own commercial interests. This includes, as we have seen more recently, withdrawing from the sector altogether, which is having devastating impacts on the broader music industry ecology.

Usual Company believes that incentives should be offered to live music operators who are willing to challenge basic assumptions about what a good/profitable festival and events experience is. For example, does there really have to be uncomfortably long waits for toilets and a ride home, or excessively expensive food and beverage? Is a main stage with a massive LED screen, lighting and pyrotechnics the only way to produce a spectacular experience? The outcomes of this experimentation could then be shared across the sector to inspire others to do things differently. Audiences expect novelty in all other experience domains and are getting it in swathes from in-home/digital entertainment. The live music industry cannot reasonably expect to compete for share- of-attention and revive audience numbers if it does not prioritise innovation in experience design. Equally, it cannot expect interest from venture capital if it does not show a capacity to creatively respond to market pressures. Government will remain disproportionately burdened with industry stimulus obligations if it fails to incentivise the behaviours that would make the industry more appealing to private investment.

Most live music promoters cannot and will not achieve such a transformation on their own. They are overwhelmed with the immediate demands of delivering their products and services in a challenging economic environment and need support from government to innovate. Otherwise, most will remain in survival mode and fail to evolve. Usual Company will continue to expand our global network of start-ups and entertainment businesses to create pathways to technology adoption. We believe the complementary role of government is to encourage the adoption of new technology by incentivising promoters to trial new ideas and innovations.  The impact here is two-fold: 

1. The promoter gets to experiment with new products that could both provide immediate support to their business and help shape the future of live music in Australia.

2. As an industry, it signals to start-up founders and builders that the entertainment industry is one to be investing time in because there are clear pathways to technology adoption.

Such incentives for festivals and event promoters could manifest as tax-offsets, grants funding, matched funding and/or seed funding. A review of regulatory barriers to innovation should also be conducted to ensure that such incentive programs are not inhibited by other unnecessary or unhelpful legislative restraints.

The Australian live music is currently standing at a crossroads, proud of a past that is quickly slipping away, but yet to bravely set out towards a future direction that might safeguard its sustainability. Innovation will be key to determining that future direction, but this will only be achieved with the right support mechanisms and incentives. We encourage government at all levels to consider the importance and potential impact of establishing such a framework, for the benefit of the entire music industry ecosystem of Australia.