Victoria’s live music venues are facing a significant crisis despite the removal of COVID-19 pandemic restrictions and economic recovery. The research paper “‘No dancing whilst drinking’: Challenges and opportunities for Victoria’s live music venues” highlights that 338 music venues have been lost between 2018-2024 statewide, with new venues failing to replace them at an adequate rate. Among the most significant Victoria live music challenges identified are soaring insurance premiums, changing audience behaviors particularly regarding alcohol consumption, and an outdated business model heavily dependent on alcohol sales.

The Alcohol Dimension

Declining Alcohol Consumption

The research reveals a fundamental shift in how audiences, particularly younger patrons, interact with alcohol in Victorian live music venues:

“The kids aren’t drinking anymore”—this quote from a venue owner encapsulates one of the most pressing Victoria live music challenges to the traditional business model. The National Drug and Alcohol Centre has found that alcohol is “falling out of favour” with Australians, a phenomenon particularly documented among young people by the Australian Institute of Health and Welfare.

While there has been a steady decrease in weekly and daily alcohol consumption in Victoria since 2007, there’s also been a small uptick in those who drink less than monthly and those who have never had a full glass of alcohol. Music Victoria found that people are cutting back on alcohol consumption as a way of reducing costs, particularly young people.

Business Model Dependency Creates Victoria Live Music Challenges

The crisis worsens as many venues base their business models on alcohol sales: “The live music sector built its foundation during the heyday of pubs. People would go to the pub, enjoy live music, engage socially and culturally, and find a sense of identity, all without pokies.” All these factors meant live music was part of the fabric of culture. That’s now changed … and COVID sped up that change dramatically.”

This declining alcohol consumption directly challenges these venues’ traditional business models: “We can’t force people to drink,” said one venue owner, pointing to the need for Victoria’s venues to shift their business models to survive. Another owner stated plainly: “The kids aren’t drinking as much and that’s awesome…The trouble is a lot of the business models of these venues often have stakes on selling booze at the gigs to pay all the bills, so it stings.”

Restrictive Alcohol Policies Compound Victoria Live Music Challenges

The paper highlights several alcohol-related policies that have impacted venues:

1. “No dancing whilst drinking” rules: The Old Bar in Fitzroy, a Melbourne live music institution, banned dancing while drinking as one measure to reduce insurance risks after their premiums increased from $10,000 to $60,000 in one year.
2. Regulations around alcohol and parental supervision restrict young people’s access to Victoria’s live music, effectively preventing the next generation of music fans from attending and supporting the industry.
3. Late-night liquor licensing: The Victorian Government ended the freeze on late-night liquor licensing in several inner Melbourne local government areas in 2022 as part of its COVID-19 recovery policy, after live music stakeholders reported the freeze was negatively affecting music venues.

How Victoria Live Music Challenges Impact the Night Economy

Public Health and Safety Concerns

While the paper doesn’t explicitly focus on the public health impacts of alcohol consumption, several implicit concerns emerge for Victoria’s live music scene:

1. Insurance companies view venues as high-risk environments partly because they “often include people moving about indoors, high levels of alcohol, and often cumbersome equipment and infrastructure like cords, speakers and lighting rigs.” The soaring insurance premiums (some increasing tenfold) reflect this perceived high risk for injury or incidents.
2. Victoria’s live music venues also “have a history of being portrayed as ‘dangerous’, whether as a site of potential infection during the COVID-19 pandemic or as places where diverse groups may not feel safe or welcome.” This perception particularly impacts younger audiences who are “trying to work out what spaces they want to go to and be safe in.”

Economic Sustainability Risks Intensify Victoria Live Music Challenges

The paper indicates significant economic sustainability challenges:

1. Insurance premiums have become prohibitively expensive for Victoria’s live music venues, with some reporting increases of tenfold over pre-pandemic levels. Venues often pass these costs on to consumers through higher ticket and beverage prices, which creates a cycle that further reduces attendance.
2. Small and medium venues in Victoria are disproportionately affected, as they have “lower capacities and therefore often smaller profit margins—’you can’t make enough money off 50 people to cover the insurance costs’, said one owner of a small music venue, with another saying ‘we’d need to start charging $10 a pot’ just to cover costs.”
3. As the business model built on alcohol sales becomes less viable, Victoria’s venues are struggling to find alternative revenue streams. A Brisbane venue operator told a federal inquiry, “People shouldn’t have to get drunk to keep a music industry alive,” emphasizing the need to shift from alcohol-dependent business models and create more accessible spaces.

Addressing Victoria Live Music Challenges: Proposed Solutions

The paper outlines several proposed solutions to address these challenges:

1. Victoria needs changes to planning and licensing requirements to encourage private investment in the industry, including tax incentives for live music venues and a tax rebate on alcohol sales.
2. The federal inquiry recommended state and territory governments designate specific “special entertainment precincts” that have a regulatory regime “more supportive of their ongoing viability,” including trading hour exceptions, liquor excise concessions, and relaxing of noise pollution restrictions.
3. In 2024, the NSW government passed “vibrancy reforms,” in which people moving into designated entertainment precincts must acknowledge they will be living in an area of late-night activity, to reduce conflict between residents and late-night venues. Victoria could adopt similar approaches to address its live music challenges.
4. The federal inquiry’s recommendations emphasized researching business models for Victoria’s live music that do not rely on alcohol sales.

Victoria Live Music Challenges Reflect Broader Societal Shifts

The declining relationship between alcohol consumption and live music attendance reflects broader societal shifts:

1. Young audiences in Victoria particularly value flexibility, diversity, and inclusion in their entertainment experiences, and many don’t see alcohol as central to their social lives as previous generations did.
2. The evolution of Victoria’s night economy needs to address changing cultural norms around drinking while still providing vibrant entertainment options.
3. As one industry expert stated, “It is time to acknowledge that new audiences are demanding new environments and new ways to experience music, and the live music industry needs to recalibrate to consumer trends and tastes.”

The comprehensive picture that emerges from this research suggests Victoria’s live music industry stands at a crossroads. The traditional model of live music venues heavily dependent on alcohol sales appears increasingly unsustainable, both economically and culturally. While alcohol policy reforms may offer some relief to Victoria’s live music challenges, the deeper challenge is reimagining a live music ecosystem that does not require high levels of alcohol consumption to be financially viable, while still providing safe, inclusive, and vibrant entertainment spaces.