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Live music seems recession-proof. Thank the ticket scalpers
When demand softens, the secondary market absorbs the pain
The Economist
Finance & economics
Mar 23rd 2025| 435 words | ★★☆☆☆
The mood music on Wall Street is downbeat, as America’s government throttles trade and hints at recession. Consumers seem poised to trim spending. Yet
one
corner of the entertainment industry is partying on. Live Nation, a concert promoter, has said it expects the live-music industry to break records in 2025. Its Ticketmaster app saw 70% more traffic this February than last, reckons Sensor Tower, a data firm.
This party may yet fizzle out. But the music business has a record of performing well during downturns. Although concerts were clobbered by covid-19 lockdowns in 2020-21, during America’s previous three recessions live entertainment held up even as spending on other forms of fun dipped, according to Goldman Sachs, a bank (see chart).
Timing is one reason: concert-goers may book tickets months in advance, so the impact of belt-tightening is delayed. Another is that the average big-name gig in America is still cheaper than a night out on Broadway or at the National Football League, meaning that concerts are not the first treats to be forgone in a crunch (they may even serve as cheaper substitutes). The globalisation of music fandom also protects touring artists from downturns. If demand falters in Johannesburg, add a date in Jakarta.
The most improbable saviours of live music in recessions are a group more often cast as villains: ticket touts. Concerts are deliberately underpriced, to ensure that true fans—young and hip but penniless—make it into the audience alongside rich oldies and corporate-hospitality bores. Scalpers take advantage by buying tickets early, then re-selling them at the true market-clearing price. In booms they prosper: in 2019, just before the pandemic, Live Nation said that the average uplift in ticket prices on the secondary market in America was 70%, providing touts with a profit of $1.3bn (more than Live Nation’s own operating profit that year).
But when demand softens, touts feel it first. Their billion-dollar profit pool in effect shields the primary market from declines in consumer spending, argue Stephen Laszczyk and Antares Tobelem of Goldman Sachs. “In the event of a recession, we would expect that the secondary market would absorb most of the pressure on marginal demand, insulating the underlying profitability of the live-music industry,” they predict.
If the direst forecasts for America’s economy come true, fans may not be willing to pay as much to see bands like Oasis, whose comeback tour begins in July. Yet with tickets already sold out in the primary market, the Gallagher brothers have no need to worry. It is those trying to make a buck in the secondary market who will have to roll with it.
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