Chapter 2 The Audience of Music

The Central & Eastern European music audience is significantly different from US, Western European and Nordic audiences. Importing business practices from advanced markets is questionable because of these differences.

The CEE music audience is younger, less educated and poorer than the Western and Nordic audience – but not because of more young people attending shows. In the region, middle-aged and older audiences are sadly missing from the venues. These characteristics are slowly changing as newer and better educated cohorts are entering the audience, but the demographic differences will be very significant for a long time. They must be accounted for when adopting grant schemes, planning an international tour or event, or adopting business models from more mature markets.

Our research shows that previous access to music education is a very strong indicator of lifelong concert visits and buying music services. Throughout the region this creates a significant handicap, because much of the region is lagging behind Western and Northern Europe in music education. In the CEE, most music education is classical music education, which plays a very different role than popular music education. Some countries, most notably Hungary, had been pioneers in introducing then-popular music into the general education with the Kodály method, but the method became largely irrelevant throughout the decades as the dominant popular music changed from folk-based music to rock and hip-hop based music.

In some parts of the CEE the main languages of global pop music, i.e. English, Spanish and Portuguese, are only spoken by a relatively small minority of people as a second language. The linguistic preferences of these audiences are distinctly different from other countries. The use of English as a language of songwriting is also less prevalent than in some other, non-native-English regions like Scandinavia.

2.1 Seasonality Concentrated Demand

The CEE region has characteristically a smaller audience proportional to the general population, and a lower visiting frequency than Western and Northern Europe. The technology and economics of music production and the competition from other cultural and entertainment opportunities do not create an equal shortfall in concerting opportunities throughout the year. All cities in the region exhibit highly seasonal concert demand with a peak in December. Compared to the peak, the demand in the low-season, for example, in January, is lower in the weaker markets than in Vienna, the strongest city market in the region. For performers, the seasonality makes tour scheduling more critical than elsewhere.

Figure 2.1: Seasonality of Concert Demand Compared to Austria

Figure 2.1 shows Google search intensities by weeks in the time period 2014-2019. Our more in-depth analysis earlier revealed that search intensities are very highly correlated with tickets sales. Compared to the stronger, red line of Austria’s ticket searches for Konzert, searches in the region for koncert, the spelling of concerts in most CEE languages, tend to have a much higher fluctuation between good weeks and bad weeks. It means that the difference compared to an ‘average’ week can be 2-3x bigger than in Austria, and the difference between ‘good’ and ‘weak’ weeks 4-6x times bigger.

Our model compares Google Search data with other relevant data, and we can compare competing interests for festivals, theatres and cinemas. Scheduling is very challenging because in many cities’ cinema and concert interest peaks in December, when venues and crews are running at peak capacity.

This is a chicken and egg problem: peak demand periods could accommodate more shows, but that would require the maintenance of even more largely empty crew and venue capacities throughout most of the year’s low season. The CEE music business accommodated to this high level of seasonality by developing a far stronger festival scene than Western Europe. As we will show in the 4.1 subchapter about live music markets, festivals create a dense concentration of audience demand and artist supply in time and geographic space on temporary festival infrastructure.

2.2 Entertainment Technology for Music Recordings

The CEE region is lagging a few years behind Western and Northern Europe in the adoption of new entertainment technology, gadgets, devices, and significantly lagging behind in music services available on these gadgets, and it is not necessarily following the same path.

We selected a few countries to highlight the regional differences. Kosovo has the lowest number of computers in households in all Europe, yet it has a high penetration of mobile or smart phones. Generally, Romania and Serbia have significantly fewer connected devices that can play music than households in Hungary, Slovenia, Poland, Czechia or Slovakia. Usually the penetration of entertainment technology is the best in Austria, the richest country in the region, which is slightly behind roll-out rates of the United Kingdom or Nordic markets (not shown in the chart). In some device categories several countries have already leapfrogged the richest, most mature market, Austria in the region.

The use of mobile internet for telecommunications, i.e. the use of free alternatives to mobile calls and text messages, such as WhatsApp or Viber, or other similar services, usually leads to a very fast roll-out of cheap smartphones and tablets through the world. Therefore the difference between smartphone penetration is smaller than the difference between computers or laptops (not shown separately).

The availability of licensed streaming services is lagging behind the roll-out of technology, not necessarily because of the small potential market size in terms of euros. Slovenia, as a small population country with a unique language is similarly disadvantaged as the poorest and smallest territories in Southeastern Europe, i.e. Montenegro and Kosovo.

All in all, partly because the households have smaller budgets, and partly because the legal alternatives are partly or fully missing from these territories, private copying and torrenting remain very important sources of music. In the countries where private copying remuneration collection is low (like in the Baltic states, Poland) or virtually non-existent (like in Bulgaria, Slovenia, or outside the EU) the royalty gap as defined as a proportion of household recreational and cultural spending is usually extremely large compared to Austria and Western Europe. (See further Subchapter 3.4 The Royalty Gap and 6.4 Use cases: Private copying.)