Tupac Shakur's holographic performance at Coachella in April didn't just give fans a thrill. It also gave the music industry an idea. In the days after the festival, word of artists wanting to work with projections—Dr. Dre is keen on touring with Jimi Hendrix, for one—emerged. The fervor is understandable: While U.S. music sales and licensing revenue are slipping (from 2001 to 2011, sales dropped from $13.7 billion to $3.4 billion), show revenue has spiked ($1.7 billion to $4.3 billion). The money is in live acts. Or dead.
Still, it's premature to say whether holograms will be making the arena rounds. According to reports, the Tupac hologram cost well in excess of $100,000. That would be a big investment for an organizer even if he or she was getting a good chunk of the proceeds, which wouldn't be the case. Explains Gary Shenk, CEO of Corbis, an image-licensing company: "With a hologram, profits are split between the owners of the image, the music publisher, the artist's estate, and the people with IP rights to the hologram. It might not be cost effective." There's also the question of whether parading around dead celebs is in good taste—but money has a way of making that particular concern disappear.
A version of this article appeared in the July/August 2012 issue of Fast Company magazine.