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Cost of Living in the Music Industry

UK Live Music: Record-Breaking Economic Boom or Industry in Crisis?

Posted on 27 October 2024

The live music sector in the UK is undoubtedly a powerhouse, with major contributions to the nation’s economy. According to a recent report by CGA Strategy, the sector hit a record high in 2023, boasting a £6.1 billion economic impact. However, a contrasting narrative emerges in the BBC’s report on ongoing struggles within the live music industry, highlighting challenges such as rising ticket prices, cancellations, and the battle to recover from the pandemic’s aftermath. Both reports offer important insights but present divergent viewpoints on the current state of the live music sector.

This blog will critically analyse the disparity between these two perspectives, highlighting the underlying complexities and the nuances that are often overlooked. By exploring the economic impact, the public’s perception of live music, the challenges for artists and venues, and the industry’s future, we can begin to understand why these reports seem at odds and what they suggest about the sector’s broader dynamics.

Record Economic Impact: A Strong Foundation or an Overstated Success?

The CGA Strategy article paints an optimistic picture of the UK’s live music industry. Its headline figure of £6.1 billion is undoubtedly impressive, with the report pointing to a “surge in consumer demand” and a significant increase in attendance at live events. Notably, the report credits festivals and large-scale concerts for contributing the lion’s share of this economic activity, suggesting that, at least on paper, the sector is thriving.

However, while the numbers may appear to reflect robust health, the CGA report doesn’t necessarily tell the full story. The figure is a testament to the economic power of the sector, but it arguably glosses over the granular details that have been deeply felt by smaller venues, independent artists, and local communities. The economic impact reported may primarily benefit larger stakeholders—such as major festivals, concert promoters, and established artists—while smaller players continue to struggle in a highly competitive and financially fraught environment.

The phrase “economic impact” can also be somewhat misleading. While it suggests growth and profitability, it doesn’t necessarily mean the wealth generated is being distributed evenly or that all sectors of the industry are experiencing the same boom. Moreover, the report doesn’t account for inflationary pressures or the rising costs that many industry professionals face, leading to questions about whether this £6.1 billion figure is as impactful as it seems.

The Ongoing Struggles: A Closer Look at the BBC Report

In contrast, the BBC’s report presents a more sobering view of the live music scene in the UK. While acknowledging the increasing demand for live music experiences, the article highlights a range of ongoing issues that are affecting the sector’s recovery from the pandemic.

Rising ticket prices, coupled with the cost-of-living crisis, have led to growing concerns among both fans and industry professionals. The impact on independent venues and smaller events is particularly pronounced, with many facing financial difficulty as they grapple with higher operational costs, fewer bookings, and cancellations.

The BBC article sheds light on the human cost of these challenges. Artists and promoters have expressed frustration at the widening gap between the excitement for live events and the practical realities of making them financially viable. This contrasts sharply with the CGA Strategy report’s focus on the economic benefits, suggesting that while live music may be in demand, the infrastructure supporting it is still struggling to recover fully. The BBC article also highlights the increase in no-shows at concerts, with fans purchasing tickets but failing to attend, leaving venues with empty seats and a loss of potential revenue. This paints a far less rosy picture than the CGA’s celebratory figures would suggest.

In this context, the success of large-scale events like festivals and arena tours, which are credited for much of the economic impact, may come at the expense of smaller venues and independent artists. These struggles aren’t reflected in the overall economic impact figure, which raises important questions about which parts of the sector are truly thriving and which are being left behind.

The Disparity Between Large and Small Players

One of the most striking aspects of these two reports is the clear divide between large-scale and small-scale players in the industry. The CGA report’s emphasis on major festivals and large concerts speaks to a segment of the industry that has benefitted significantly from the post-pandemic recovery. These events often have the backing of major promoters, significant sponsorships, and the ability to charge high ticket prices, which insulates them from some of the financial difficulties faced by smaller, independent events.

On the other hand, the BBC report paints a picture of smaller venues and artists struggling to stay afloat. Many of these venues rely on grassroots support and local communities, which have been hit hard by the cost-of-living crisis. Rising energy costs, rent, and operational expenses make it increasingly difficult for smaller venues to turn a profit, while independent artists face a challenging landscape where gig fees often fail to cover their costs. The stark contrast between these two sectors raises questions about whether the live music industry is becoming increasingly bifurcated, with large players thriving at the expense of smaller ones.

The BBC article also touches on another growing issue: the over-saturation of the market. As more artists vie for limited gig opportunities, particularly in the wake of the pandemic, many are finding it harder to secure bookings, leading to increased competition and lower fees. This, in turn, impacts the profitability of venues, which may struggle to attract the same level of attendance as larger events. These challenges contribute to a sense of disparity within the industry, which is not adequately addressed by the CGA’s headline figures.

Recovery or Fragility: What Does the Future Hold for the UK’s Live Music Sector?

Both reports indicate that the live music sector is undergoing significant changes, but they diverge on the broader implications of these shifts. The CGA Strategy report presents a picture of recovery and growth, driven by strong consumer demand and high levels of engagement with live events. This optimism is not unwarranted, especially given the pent-up demand following years of lockdowns and restrictions. The success of major festivals like Glastonbury and Reading, alongside the return of international tours, has undoubtedly contributed to the sector’s recovery.

However, the BBC article offers a more nuanced and cautious outlook, highlighting the fragility that still exists within the industry. Smaller venues and independent promoters remain vulnerable, and the ongoing financial pressures could lead to further closures and cancellations if these challenges aren’t addressed. While the economic impact of the live music sector may be at a record high, the sector’s foundation appears to be built on shaky ground.

The disparity between these two reports points to a broader issue within the live music industry: the sector is far from a monolith. While large-scale events may be thriving, the smaller, independent players that form the backbone of the industry are still struggling to find their footing. The future of the live music sector will likely depend on how these challenges are addressed and whether the industry’s recovery can be made more equitable.

Article by Amelia Vandergast

What Can Save the UK Music Industry?

Posted on 7 November 2022

With issues continuing to amass in the music industry, more people are starting to despairingly speculate on what can save it. Earlier this year some people banked on the ham-fisted benevolence of Elon Musk saving the day, while others pinned their hopes on opportunities opened up by the metaverse and music NFTs.

Realistically, there is never going to be a catch-all solution that gently cradles all musicians from the cut-throat nature of the industry and uplifts it from the increasing economic strains. Nor will there be a return to how things used to be – no matter how longingly we long for it. Instead, the individual issues within the music industry need to be addressed before there can be a discussion of how it can bolster some resilience in an era where even the most robust markets are feeling the increased pressure of the cost-of-living crisis.

The Three Biggest Challenges That Need to Be Overcome in the Music Industry

The Lack of Government Support

In 2022, the UK music industry is now one-third smaller than in 2019 due to the hat-trick devastation caused by inflation, Brexit, and the pandemic. The calls for government support are getting louder and louder in an attempt to quash the blow of the rising costs of touring and keeping the lights on in venues.

Manchester’s Dave Haslam was one of the many voices calling for support in a recently published article in the Guardian, which followed the trajectory of the decline of the music industry through the years and called for government intervention. The government support would ideally involve a freeze on alcohol duty, reductions in VAT, and relief on business rates, to prevent the closure of even more clubs and venues across the UK. Removing the red tape imposed by Brexit to help touring musicians is also a prominent request in calls for governmental intervention.

Keeping the pressure on politicians, especially the newly appointed Culture Secretary, Michelle Donelan, by reminding them of the value of the multi-billion-pound industry, which employs hundreds of thousands of people, is more important than ever. With Rishi Sunak at the top, it’s easy to give into apathy, given his recent declaration that “the state can’t fix all your problems”. If you care about the future of the music industry, fight for it, don’t just hope that someone will do it on your behalf!

The Economic and Ecological Cost of Touring

National and international tours are how many artists attempt to make their music careers economically viable now that streaming services such as Spotify are reigning over CD and vinyl sales. But with the increasing awareness of the carbon footprint of touring confounding the economic unviability due to the inflated prices of fuel and just about everything else, how long can the massive shows go on?

In an ideal world, we wouldn’t have to contemplate the ecological impact of artists heading out on tour and living their dreams of finding themselves in a new city every night and playing to a sell-out crowd. Unfortunately, the planet is hotting up; the music industry can’t put their heads in the scorched sand any longer and pretend it is not contributing to the massive existential problem.

A study published in 2010 reported that the live music industry annually generated 405,000 metric tonnes of emissions in the UK alone. That is enough energy to power 46,000 homes. While there is no shortage of greenwashing festivals with their token efforts, such as banning plastic cups, it isn’t going to cut the mustard if we are going to achieve net zero by 2050.

Whether you like it or not, the reality of touring is being reshaped by climate change. But that doesn’t mean that live music needs to be wiped from existence. It does mean that we need to consider the ramifications of the environmental impacts and start to place more value on smaller-scale local and regional performances. If communal music traditions met artistic needs for millennia, why should they be discarded now? Local and grassroots music is the overlooked, slightly less glamorous backbone of the music industry. If neglected for long enough, everything else will crumble.

Unfair Royalty Cuts from Streaming Platforms

There are a lot of popular misconceptions around streaming platform royalties, namely that services such as Spotify pay their pitiful revenues to the artists directly. Before royalties reach artists’ and songwriters’ bank accounts, they go through distro companies, record labels and copyright management companies, who take a sizeable chunk for themselves.

Spotify takes a 25% cut of the revenue, the recording owners take 59.9%, and the songwriters and publishers share a 15.1% cut. While it is easy to paint Spotify as the devil incarnate, the real issue is the complexity of copyright law which commodifies music and exploits artists in the process. For the same reason it took The Rolling Stones until the 70s to make any real cash, the struggle is the same for any contemporary artist signed to a record label that was drafted to bleed them dry.

The decline of the major record labels as artists are seeing the light and opting for an independent music career is a step in the right direction but it is easier said than done for independent artists to succeed. Frank Ocean and Chance the Rapper proved it is possible to be successful and independent, but that doesn’t mean it is viable for all artists. Especially given that thousands of new tracks launch on Spotify every day, and almost 80% of artists on Spotify have a monthly listener count that is less than 50.

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So, to answer the question of how can the music industry can be saved in short, the answer is recognising that the current framework of the industry needs a drastic overhaul. From tearing up the copyright laws which exploit artists instead of protecting them to recognising why the live music industry is really up against the wall to accepting the over-saturated unsustainability of the industry. Something has to give before the music industry goes further than a 1/3rd slump in market value.

Article by Amelia Vandergast