In late 2017, UK Music published their latest Measuring Music report. UK Music is a lobbying group for the ‘collective interests of the recorded, published and live arms of the British music industry’. Measuring Music is one of their campaigning documents and it therefore contains headline-grabbing statistics. One of the most eye-catching is that live music is worth £1bn to the UK economy, while recorded music is only worth £640m.
This
phenomenon has been reported in turn by media institutions, such as the BBC and
the Financial Times, and by industry players, such the Music Publishers Association, Ticketing Business News and Billboard. It is also noted in the recent UK Live Music Census.
What
these news reports miss out, however, is that that the live music statistics
and recorded music statistics are not directly comparable. UK Music admit as
much in their separate ‘methodology’ document, albeit only in terms of their calculation
of the Gross Value Added (GVA) Contribution, the figures that illustrate the
contribution of each music industry sector to the British economy. UK Music
state that GVA ‘is most simply understood as the value of sales minus
the cost of bought in goods and services used up in the production process’,
but also admit that calculating GVA is not straightforward at all. As a result,
‘This means that it is
likely that the ratio of GVA to Gross Output that we apply may vary between the
different elements of the core music industry. It is bespoke to the core as a
whole, not to the component parts of the core’.
GVA is nevertheless only one of the
factors that help to make any direct comparisons between live and recorded
music questionable. In fact, the figures are more profoundly skewed by other
elements of the methodology, notably decisions about what makes up the ‘core
music industry’ and what makes up the ‘wider music industry’; about what to
include within each sector of the music industries; and about what to exclude
from these sectors. Recorded music suffers in comparison to live music in each of these methodological respects.
‘Core music industry’ occupations
are counted towards the trade figures; ‘wider music industry’ occupations are
not. The core includes live industry revenue from ‘ticketing agents’ and
‘concert venues and arenas’, but it does not include recording industry
income from ‘music retail (shops)’, ‘music retail (digital)’ or ‘other
music-based digital services for consumers’.
This discrepancy becomes more
apparent when we look at what is included within the ‘recorded music’ sector
and what is included within ‘live music’. Recorded music is restricted to the
wholesale income of sales of physical formats and downloads, as well as the
money that record companies make from streaming (of both the ad-supported and
subscription varieties). It does not include the money that the retailers and
streaming companies make from selling these goods. The Live music figures,
meanwhile, include ‘Total ticket sales for all kinds of live music events’. In
contrast to recorded music, they feature the share of income that goes to the
retailers of the tickets: ticketing Agents are included. This makes a significant
difference. If the retail income from recorded music were included, its totals
would rise by at least 30% in the case of the streaming and downloading trade
and by around 40% in respect of physical sales. Conversely, ticket agents earn
about 10% of the income from ticket sales. On top of this, the live music
figures include ‘food and beverage sales’, ‘merchandise’ and ‘venue parking’,
as well as ‘camping fees’ for music festivals. It could be argued that recorded
music generates similar ‘ancillary’ income (record shops generate merchandise
sales and many also now sell food and drink), but these are not included in the
figures. The list of trades included under live music is also more expansive.
The figures incorporate music festival organisers, music promoters, music
agents and production services. Recorded music does include ‘design and
production of physical product and packaging’ alongside those employed by
record labels themselves. Nevertheless, it does not include the money generated
by ‘music producers, recording studios and staff’. These could be considered
intimately connected to recorded music, but they are given a separate section
within the Measuring Music report.
There is a more significant omission,
however. The live and recorded music figures are concentrated upon those who
make a living because of the work of
musicians and composers: the record companies, manufacturers, ticket
agents and venue workers. The income of the musicians and singers is not
included under the headings of recording or live. The policy, instead, is to subtract artist income from these totals and to place it in
the combined field of ‘musicians, composers, songwriters & lyricists’. This
makes a difference in three respects. In the first instance, it enables the Measuring Music report to argue that artists are the biggest income generators of all. Their total GVA contribution
is calculated at £2b. This is double the live income figure and more than three
times the amount calculated for recorded music. Secondly, because the figures for composers and performers are combined, we do not get a picture of how much
money they are each deriving from recording and how much from live music. This is
significant, as we need these figures to get a more accurate picture of the
money that is being generated in these two fields. A third factor results
from the fact that Measuring Music does
not drill down into its figures. We do not get to see how much record companies
are earning from recorded music in comparison to recording artists and
composers, and nor can we assess the distribution of income in the live
music field.
What can be assumed, however, is that the majority of
income reported under ‘recorded music’ will result in related income for
musicians and composers. They will receive royalties from each sale, download,
stream, radio play, public performance or licensing deal. Moreover, while there
are variations in the amounts that artists will receive, these are within parameters:
approximately 15%-20% of the income from sales and streams will go the
recording artists, 8.5% will go the songwriters and their publishers;
performing rights relating to the sound recording will be divided 50/50 between
record company and musicians, while songwriters will receive at least 50% of
the performing rights income for the composition.
In contrast, there are several
income streams reported under ‘live music’ that will not result in corresponding
income for performers or composers. In the majority of cases
this will include the sales of food and beverages at gigs, the parking income and camping
fees, and also the money that venues charge to put on events. Other
income figures for live music can be widely variable, including the shares that
artists receive from ticket sales and the money that they make from
merchandise. The general tendency, however, is that the gap between the rich
and poor is wider in live music than it is in recorded music. Live music income
is oriented towards star performers and heritage acts, as well as to artists
who perform cover versions of these performers songs. Performers down the lower
end of the scale may earn nothing from live music or even operate at a loss.
Recorded music, in contrast, has a more equal basis. The stars here obviously
do make more money than the obscurities, but they do so from generating multiple
sales and streams, rather than by charging higher prices than their competitors
or by demanding higher fees.
In one respect UK Music’s decision
to separate the income of composers and performers into a category of its own
is justified. Although these artists have different income streams for their
recorded and live work, the profits and losses in these areas are
intertwined. The report depicts a sequential process whereby it is
songwriting that enables the creation of successful records, and successful
records that prompt successes within live performance. This sequence
moves in various directions when it comes to revenue, however. Live performance drives the sale
and usage of recordings, and recordings drive the sales of tickets for gigs. Beyond
this, as Measuring Music argues, the
most successful artists are not just selling their music; they are selling
themselves ‘as a brand, reputation or image’.
At the same time, the
categorisations employed by UK Music are of tactical use. As stated above, Measuring Music is a campaigning report.
It seeks to gain the government’s support for the UK music industry as a whole.
In doing so, it has a dual task. One objective is to point out the value of
music. Therefore, the report documents the vast amounts of money that are being
accumulated and the large numbers of people who are being employed. At the same
time, the report calls for aid. It wants the government to intervene so that
yet more money can be made and so that jobs in each sector can be secured.
UK Music is a coalition between
record labels, publishers, artists, managers, songwriters, collection societies
and the live music industry. It aims to promote a unified front. It does not want to identify injustices amongst
these industry sectors. Therefore, despite the widespread criticism of
streaming royalty rates for musicians and songwriters, this report will not
show you whether record companies and publishers are profiting at their
artists’ expense. Similarly, while prices for tickets have risen sharply in
recent years, Measuring Music
provides no clues as to whether the live music industry could be more
altruistic towards smaller venues or to nascent performers.
Instead, it locates responsibility for low rates of pay
outside of the core music industry. As with virtually all industry documents
from last year, its main beef is with the ‘value gap’: if there is unfairness
in music it is due to YouTube and Facebook and their pesky ‘safe harbours’. Michael
Dugher, the CEO of UK Music, stresses that ‘these platforms offer little
adequate reward to the investors and creators of the “content”. As a result,
their safe harbours must be removed.
The report also suggests that the closure of this value gap within
the recording industry will help all parts of the music economy. In doing
so, it absolves the live music sector from any responsibility for the
distribution of its riches. Dugher notes:
Live music
did have another great year as millions of people poured into festivals,
stadiums and venues to see and hear their favourite acts. And live music is a
fantastic driver for growth. But future talent will never get the chance to
shine if we continue to see cuts in music in schools and closures in venues
where artists need to learn their craft in the first place. To reach the big
stage you need to have a hit record and you need to be able to pay the bills.
That means that those who create music and invest in it must be properly
rewarded. That’s why we must urgently address the ‘value gap’, particularly on
the new and exciting platforms that many people now use to listen to music.
This
would appear to indicate that, despite the headline figures about live music’s
dominance, when it comes to artists’ recompense it is recorded music that is
primary.
