It's no secret that the pandemic led to large increases in business for over-the-top video streaming companies, as millions of people entertained themselves by binge-watching online content.
At the same time, the performing arts industry lost millions of dollars in ticket revenue due to show cancellations and venues being closed to the public to limit the spread of COVID-19. According to the National Endowment for the Arts, performing arts companies earned $834 million and $1.7 billion, respectively, for the third quarters of 2020 and 2021, far below the $12.7 billion earned in the same quarter in 2019.
A Minneapolis software company is hoping to help performance arts companies and artists create new revenue streams and regain lost income with the creation of an online cataloging and livestream platform.
Pennant, which officially launched this spring, allows theater groups, orchestras and artists to charge for access to livestreamed events and premium previously recorded content.
Pennant is a white-labeled product, meaning it can be customized by the user. In this instance, artists and arts organizations can customize their website to their liking by choosing which content is uploaded, which videos are featured on the main page, and adding guides to where fans can buy tickets to upcoming shows and livestreams.
Jeff Lin, Pennant's chief executive, said the product is ideal for artists not signed to major record labels or performance groups that don't have large budgets. Pennant also is integrated with online shopping platform Shopify, allowing artists and organizations to sell merchandise directly to fans, Lin said.
Pennant is a spinoff of the Minneapolis-based website and app design company Bust Out, for which Lin is also chief executive. Some of Bust Out's clients are performance arts companies, including the St. Paul Chamber Orchestra.
Bust Out created an online concert library for the SPCO in 2017 to expand access to people who could not attend in person. During the pandemic, though, the SPCO used that library to share previously recorded performances, and once musicians were able to meet in person, it used that same platform to livestream concerts from an empty Ordway Concert Hall in St. Paul free of charge for the public.
Not long after lockdowns began and venues were forced to close, Bust Out's other performance arts clients asked if the app maker could custom-designed online libraries similar to SPCO's, but their budgets — and Bust Out's capacity to deliver in such a short period — made it unfeasible.
The alternative idea was to develop a singular platform where performing arts groups could customize their own online libraries.
"We had already been talking about what we can do to help these performing arts organizations, so we said, "Why don't we build a platform for all of these bands and orchestras and theaters who can launch their own channel and not have to own software or build from scratch?" Lin said. " We build the platform, and they use it."
Pennant operates in a business-to-business-to consumer model and earns revenue based on the number of tickets a client sells to livestreams. If an artist sells out of tickets for an upcoming show, they can sell an unlimited number of tickets to see the livestream of the show on their Pennant platform.
"You can see the potential," Lin said. The team at Pennant is in talks with about half a dozen organizations about using the platform.
Lin expects Pennant will have between 10 and 20 employees at the end of 2022. That includes a sales and marketing team and product team composed of designers and engineers.
While some could speculate the online streaming industry is becoming crowded, Lin views it as an indicator of where entertainment is going.
"This online concert stuff is going to happen," he said. "When the pandemic hit, it was like, 'You know that thing we thought would take 10 to 15 years? It's happening right now.' "
Skye Ross, senior vice president at Rhymesayers Entertainment, a Minneapolis record label, has served as a mentor to the team at Pennant. He thinks the platform's creation comes at a opportune time.
"Traditional arts organizations who pull a lot of revenue from events, [the pandemic] was a wake-up call," Ross said.
The cancellation of shows, combined with the isolation many people felt, accelerated the need for a product like Pennant, Ross added.
"This technology is here to stay," he said. "Live entertainment ... people are hungry for that."