Cross sector trade group UK Music has published its annual report on the economic impact of the British music industry. As expected, the stats show that while the music sector started to recover in 2021 after the COVID-caused slump in 2020, it was only a partial recovery, with the live sector in particular still affected by the pandemic throughout last year.
So while the so called gross value added for the UK music industry was up 26% year-on-year in 2021, rising from £3.1 billion to £4 billion, that’s still 31% down on the pre-pandemic GVA of £5.8 billion in 2019. Similarly, while the number of people working in music in 2021 was up 14% on 2020, reaching 145,000, that’s still down 26% on the pre-COVID workforce of 197,000.
A similar pattern is seen in the value of UK music exports. Those rose in 2021 to £2.5 billion – up 10% on the £2.3 billion figure in 2020 – but still down 15% on the £2.9 billion seen in 2019.
Of course, it’s no secret that it was the live side of the industry that suffered the most from the COVID-19 pandemic. The recorded music sector continued to grow throughout on the back of the ongoing streaming boom, and while songwriters and publishers were hit by their songs not being performed during the lockdowns, growing digital revenues reduced the negative impact on the music publishing side to an extent.
But on the live side, while 2021 wasn’t as bad as 2020, the pandemic still had a major impact on the sector. Various lockdowns throughout the year meant venues were closed and festivals cancelled for many months, and even once restrictions started to lift around the UK during the summer, things couldn’t get properly back to normal.
First, international travel restrictions still applied, making it harder for British artists to tour abroad and for international acts to play in the UK. And shows were regularly cancelled because artists and/or crew members had tested positive for COVID.
Plus many consumers were not ready to return to gigs and events, and by the end of the year, as the omicron variant spiked, the UK government was basically telling people to stay at home even though technically venues could open and shows could go ahead.
Many of those challenges have slowly gone away this year, so you’d expect the economic impact figures for 2022 to show further growth on 2021. Though, of course, new challenges have popped up along the way.
A two year backlog of shows resulted in a super saturated marketplace over the summer, while not all consumers are necessarily attending shows and events at 2019 levels yet, partly because of ongoing COVID concerns, and partly because of the cost of living crisis.
Meanwhile, venues and promoters are facing surging operating costs and often struggling to find enough crew to run the shows, while artists touring in Europe are having to tackle lots of new post-Brexit bureaucracy.
So, from a UK Music perspective, while the 2021 figures are more positive than the stats for 2020 – and the economic impact of the sector this year will certainly be stronger still – the music community still needs additional support from the government. And it’s UK Music’s job to ask for support, of course.
Says UK Music boss Jamie Njoku-Goodwin: “The UK music industry is working hard to recover after the catastrophic impact of COVID-19, but there is still some way to go to restore the jobs and growth lost during the pandemic. Our sector still faces a serious threat from the economic storm that could blow our fragile recovery off course without urgent government support”.
“It’s vital that government acts to protect and support a sector that creates jobs, contributes to the economy and matters to millions of people across our country”, he goes on.
With a new Prime Minister in place and an emergency budget statement due from the government on Friday, Njoku-Goodwin has plenty of suggestions regarding what support the sector could and should now receive.
“The new Prime Minister has said she wants to cut taxes to stimulate growth”, he notes. “If she is serious about this, then she should use the emergency budget to reduce the tax burden on the music industry, for instance, by extending the hugely successful creative industry tax reliefs to the music industry”.
“This would incentivise investment and boost exports of British music, which are at risk due to increasing international competition and issues following the UK’s exit from the European Union”, he goes on.
In recent months, of course, a top priority for the UK music community in terms of government support was some kind of scheme to mitigate the impact of surging energy costs. Such a scheme has been announced since Liz Truss became PM, with a cap being introduced on energy prices for business customers for the first time, more details of which were published earlier this week.
“We welcome the government’s announcement to combat the impact of soaring energy bills, which will give music businesses some urgently needed support”, Njoku-Goodwin states.
But, like reps for the night-time and live sectors, while that scheme is welcome, the UK Music boss stresses that it is only currently in place for six months, and that it only tackles one of the financial challenges venues, clubs, studios and other music businesses face.
With that in mind, he adds: “We need clarity about what happens after that support is withdrawn after six months. And we still need to see more assistance to secure our sector’s long-term recovery, including a significant cut in VAT from its current rate of 20% – something the government did in the pandemic to support the music sector”.
In addition to all that, Njoku-Goodwin also has a copyright request to add to UK Music’s polite and punchy wish list – or big bucket of demands if you prefer. And that relates to the recent statement from the UK government regarding copyright reform in relation to the development of artificial intelligence.
“It is also essential that government recognises the importance of copyright to the creative sector and takes steps to protect intellectual property rights”, he continues. “Proposals by the previous government to allow AI companies a copyright exception for text and data mining are an existential threat to our sector and must be stopped. These plans constitute a green light to music laundering and the whole industry is united in urging the government to scrap them”.
Concluding, Njoku-Goodwin reminds Truss and her new team that pre-pandemic the UK had a leading music industry in global terms, and that the UK government spent quite a lot of money supporting music businesses during the pandemic, which was good. But, he reckons, further support is now essential for the UK music sector to return to its former glory and to ensure a good return on the government’s mid-pandemic investments.
“We have a music industry in the UK that is the envy of the world and a talent pipeline that continues to produce global stars and an army of highly skilled professionals”, he says. “It is vital that the government works with us to protect and nurture the music industry from the economic turbulence we face so we can pull through and create the jobs and investment to make it even stronger than it was before the pandemic”.
You can download UK Music’s new report – called ‘This Is Music 2022’ – right about here.