Are we reaching peak fandom?

With streaming revenue growth slowing to 6.2% in 2024, the recorded music industry’s attention is firmly fixed on superfans as the ‘get out of jail free’ card. The growing sophistication of artist merch has reached the stage where fans can buy Taylor Swift fashion bags and shop her jewelry range, meanwhile all eyes are on the impending Spotify supremium tier (as reported by Bloomberg). But there are early warning signs that the industry may be going too fast and that superfan spending is being pushed to the limit. 

Record labels’ expanded rights revenue (the share of merch, branding, sponsorship, etc. that labels participate in) was up an impressive 16.4% in 2024 and was more than a tenth of all recorded music revenues in 2024. At the same time, however, physical revenues were down -4.8%, and have oscillated between growth and decline every year of the decade so far. Most significantly though, all was not well in the live music sector in 2024. This matters because so many of those live fans are the very same people buying merch (more than half of merch buyers also go to concerts every week). In short, both the live and recorded music businesses are trying to max out the spending of the same customers, all at the same time that streaming prices have gone up and high interest rates mean rents and mortgages are getting ever higher.

Live music has undergone a revenue renaissance since Covid, with revenues of leading live music companies more than double their pre-Covid high. Revenue growth soared in 2022 and 2023, but slowed to just 4.6% in 2024. Most importantly though, while revenue was up, the number of tickets sold was down. According to Pollstar, even though 2024 revenue for the top 100 tours globally was up 3.6% ticket sales were down -5.7%. For the top 100 US tours tickets were down -9.2%, and revenue was down too. In Ibiza, it was a similar story with ticketing revenue up 6.4% but tickets sold down -12.0%.

Live music companies argue that live music is price inelastic – meaning demand will remain stable despite price increases and consumers will tolerate higher prices because they want the product so much. That was true in the post-Covid era, when fans were so desperate to see concerts again that they were willing to pay a premium to do so. But the thing about elastic is, that if you stretch it enough, it snaps. Again, according to Pollstar, the average ticket prices for the top 100 tours worldwide rose 53.9% between 2021 and 2024. The elastic snapped in 2024.

Fans are still fans but they are being pummeled for spending from three directions: higher prices (plus supremium to come!) from DSPs; merch and vinyl from labels and artists; higher ticket prices from live companies. This is all while they are finding it harder than ever to pay the rent or mortgage, and this is not even considering the inflation that tariffs will most likely bring. Instead of thinking of the fan as a single person, three different parts of the music industry are seeing the fan as three separate addressable audience segments. We are now seeing the impact of that – and it will get worse. So much so that we may even see a decline in live music revenues in 2025. Keep an eye on Live Nation’s Q1 25 results later today (May 1st) for what may be an early indicator of what is to come.

As we have long said at MIDiA, you cannot harvest fandom if you are not also nurturing it. As long as the fan appears as three disconnected marketing lists for the music industry, what happens instead is that the field gets harvested three times over. It is time for a joined up view of the fan and a better understanding of just how much money they can spend. Otherwise superfans will simply never be given the chance to become super enough.