Rockol Tracks: Why the UK music business is essential to the economy
The British music industry is among the most successful markets worldwide. It is also the world’s third biggest recorded-music sector after the US and Japan. And UK boy band One Direction are the IFPI’s 2013 Top Global Recording Artist.
It now aims to be the best at what most national markets should be good at – understanding the true financial value of the music sector to the national economy.
Rockol recently came across The Economic Contribution of the Core UK Music Industry, a December 2013 report published by UK Music, the umbrella organization for the country’s trade associations.
The full report, which can be read here, concluded that an industry traditionally treated as a frivolous fun activity and shunned by financial lenders like banks and investors contributed a significant £3.5 billion in 2012.
Surprisingly, the general business press does not seem to have highlighted the news that musicians, songwriters, composers and lyricists generated £1.6 billion for the country’s economy that year. Live music, including the business of promoters, festival organizers, talent agents, ticketing agents and venues, brought in £662 million, followed by recorded music (including labels and online digital services), which earned another £634 million.
They are followed by music publishing (£402 million), music representatives such as royalty-collection societies (£151 million), and revenues earned by music producers and recording studios (£80 million). Furthermore, the report notes that 40% of the total, £1.4 billion, came from exports, which include the sale and use of UK-made music overseas.
Considering labels invested £163 million in A&R alone in 2011, it is amazing that it is only in recent years that British civil servants have understood the growing importance of music to the national GDP.
The report also emphasizes that music, which created more than 100,000 jobs in 2012, should trigger the British government to set up viable policies for the industry and its legacy.
The music business has been pleading with government departments to stop using traditional indices (which might work for manufacturing, agricultural, and financial sectors but not the creative sector) alone to calculate music’s value to the state’s economic welfare.
After several years of lobbying for a reassessment, driven by the need for copyright legislation to adapt to technological changes brought by digital media, UK Music and its members have taken the matter into their own hands.
“The industry has made considerable efforts to improve understanding of its economic contribution. We trust that these efforts will be recognized and reciprocated by government,” concludes the report.
The government has not been totally deaf. The UK-labels trade body BPI and government department UKTI (UK Trade & Investment) recently announced the first batch of recipients of the £3 million Music Export Growth Scheme.
As reported in Rockol.com last November, the scheme provides financial support for small to medium-sized independent labels seeking to expand internationally.
The first 14 indie artists to benefit from the initiative, which BPI hopes will continue the international success achieved by British performers from Adele to One Direction, include Afrikan Boy (pictured), the London-based grime artist who is on the Afro-Pop Live label.
Also on the list are Glaswegian rockers Holy Mountain, who are on Chemikal Underground Records; drum & bass duo Fred V & Grafix, signed to Hospital Records; Drenge (Infectious Music); Beth Jeans Houghton (Mute); and composer George Benjamin on Wyastone.
So why is such as scheme needed now when it seems British acts are doing very well overseas? “The barriers to entry are low. Yet, the barriers to success remain high. Whilst the Internet has facilitated the discovery of new talent – and in some cases caused a virtually unknown individual to rise to fame overnight - it often requires the investment of a record label to take an emerging artist to superstar heights,” a BPI spokesperson says. “Record labels invested more than £163 million in developing acts on an annual basis. Yet only one in ten artists goes on to have a commercially successful career.”
And what does the export scheme say about the government’s views on the music industry, she adds: “As one of the few net exporters of music in the world, the UK music industry represents a valuable sector for the economy and this fund will enable us to build on our extraordinary success to date. We have a fund of up to £2.5million to work with over the next two and a half years and our aim is to ensure that the success it delivers during this period is recognized by the Government in a bid to unlock future funding.”
[Juliana Koranteng]