Written evidence submitted by IFPI

Promoting Britain abroad: IFPI response to Inquiry

About IFPI

IFPI is the organisation representing the interests of the recording industry worldwide. IFPI and its National Group network has over 8,000 members across more than 70 countries. IFPI’s mission is to promote the value of recorded music, campaign for the rights of record producers and expand the commercial uses of recorded music in all markets where its members operate. For further information please visit www.ifpi.org

Reasons for responding to the inquiry:

Through our work representing the recording industry worldwide, we see the impact UK music has on enhancing recognition of UK culture and driving the positive image of the UK abroad. The investment made in the UK music industry, combined with UK government support, plays a vital role in this. We note that the government is already aware of the UK music industry’s “soft power” potential, as evidenced by the government’s “Britain is Great” campaign in which music features prominently:

“The UK has a huge amount to offer, with world-class universities, ground-breaking research, high-tech start-ups and innovative entrepreneurs. We are global leaders in the creative industries, from music to fashion and design to film.”[1]

Furthermore, we are also aware of policies and programmes pertaining to the music industry that are in place in other countries that help to promote their culture abroad and which the UK government should give consideration to adopting. We have highlighted some of these in our answers below.

We thank the DCMS Select Committee for the opportunity to provide our input to the inquiry and wish to submit the following.

1. What needs to be done to re-establish the UK as a holiday destination for international travellers?

Music is at the beating heart of UK culture.  British artists have put the country on the global map and introduced fans from around the world to legendary spots as diverse as the Cavern Club in Liverpool, the Salford Lads Club and London’s Royal Albert Hall.  These locations are part of recorded music history and have become places of pilgrimage for fans from all over the world.

People also come from all over the world to attend festivals in varying sizes and guises, from Glastonbury in Somerset, through T in the Park in Glasgow to Green Man in the Brecon Beacons.

Today, a new generation of global British superstars – such as Adele, Ed Sheeran and Harry Styles – inspire similar dedication from fans worldwide who seek to visit the UK, to attend a concert in one of UK’s world-renowned music venues, visit one of the legendary UK music festivals, or experience the locations and culture that that shaped the formative years of the artists they love.

And we’re seeing up and coming artists from Newcastle’s Sam Fender through Northern Ireland’s JC Stewart to South London’s Dave inspire similar interest from music fans.

The UK’s exceptional pull for music fans is not limited to popular music; for instance, a number of British classical orchestras, opera houses, and ballets are strong global brands.

The UK government must make it easier for fans to come to Britain and follow the music they love.  This means easing tourist visa regulations and Covid testing requirements as far as possible without harming public safety. 

2. What should Government and the tourism boards be doing to support the inbound tourism industry in its recovery?

The UK government should work with industry to tell the stories of British artists and promote them to a global audience.

UK record label trade association, BPI, runs the Music Export Growth Scheme[2] in partnership with the UK Government. The scheme boosts British music exports by supporting small to medium sized music companies as they build on the commercial potential and profile of their artists in overseas markets. 

The scheme is co-funded by the Department for International Trade (DIT) and the Department for Digital, Culture, Media & Sport (DCMS) alongside industry investment, which, on average, contributes just under two-thirds (64%) of total spend.

The scheme is a good example of how the industry and government can come together to support acts that may not otherwise have the opportunity to promote their music abroad. This scheme should be supported and could be enhanced with further funding from Government. In fact, continued funding from Government has the potential to strengthen the UK’s ability to compete and help the industry grow annual music exports to £1 billion a year by the end of the decade.[3]

Tourist Boards could work with the music industry to uncover the stories of artists from their region, perhaps by creating ‘music routes’[4], similar to the successful approach applied in several US states.  They could also tie-in promotional campaigns to established music events.  For example, why shouldn’t fans who visit the Isle of Wight festival stay on to see something of the island?

3. What should the UK be doing to maintain its status as a ‘soft power superpower’ and further promote its culture and heritage on the global stage?

The UK recorded music industry is the third largest in the world in terms of revenue generation. It is also one of only three countries that are net exporters of music talent – a remarkable achievement. According to the BPI, 80% of all streams of British artists come from outside of the UK. In fact, the UK’s share of global streaming is four times greater than its share of global GDP.

But this success depends on the role record labels play in investing in and developing the UK’s music ecosystem, helping to generate exports of up to £2.9 billion in 2019. That multi-million pound investment in UK artists and repertoire powers the growth of the whole music ecosystem of artists, songwriters, promoters, merchandising companies, streaming services, advertising agencies etc.

That wider music industry generated £4.7 billion worth of music tourism revenue in the same year.

It is therefore vital that record companies can continue their investment, unhindered, in the UK music industry to continue to support the growth and development of British artists.   

Such a high level of export intensity suggests that the industry’s commercial success should go hand-in-hand with the government’s vision for ‘Global Britain’.

South Korea as an example:

A key example of a country currently benefitting from the soft power of its globally successful music industry is South Korea. In 2020, K-Pop Band BTS topped IFPI’s global charts as the biggest selling artist and had two of the biggest selling albums of the year.[5]  This success, along with those of other South Korean artists, including Blackpink, is the result of a very deliberate strategy put in place by the Korean government. This began with introducing strict anti-piracy legislation to deter illegal music consumption alongside government investment to support the making and marketing of music abroad. The development of the music sector, along with other forms of Korean culture, was viewed as a way to directly accelerate economic recovery.[6]  For 2021, the Korean Government committed 696.1 billion won (US$584.8 million) for the promotion of the nation's ‘soft power’ culture - an increase of 42.7 percent from the previous year's budget.[7]

French Ministry of Culture – Phonographic Production Tax Credit

Supporting the domestic music industry to improve opportunities for the sector abroad is something we see in many countries. For a number of years, the French Ministry of Culture has offered a tax credit[8] for the production of recorded music. The credit encourages further investment in the French music market and in French artists by granting back 15 percent of the total of production and/or post-production expenditure on a record or music video and expenditure related to the development of those productions (stage, television or radio broadcasts, website creation, digitised database etc.). A higher rate of 30 percent is given to small and medium-sized enterprises to offer further support. The tax credits are capped at €350,000 per registration and the total amount of tax credits may not exceed €1.1 million per company per fiscal year. 

The Italian Government’s ‘Cultural Bonus’ for 18-year-olds.

The Italian Government gives all teenagers €500 in the year they turn 18 to spend on ‘cultural products’ including books, movies, concert tickets and recorded music (both physical and digital).  First introduced in 2016, an annual fund of €230 million is delivered via the Government’s ‘18app[9]’ and has proved to be an effective way of supporting the wider cultural sector in the country whilst providing all those turning 18 that year access to cultural goods.

4. How can the UK capitalise on its exit from the European Union?

It is essential that the UK Government focuses on supporting its music industry by ensuring that British music continues to lead on the global stage. 

The music industry should be a key consideration when the UK government forges new trade agreements with countries across the globe, to enable UK artists to benefit from the Government’s Global Britain agenda. In order to benefit from its exceptional export potential the UK’s record companies’ copyrights need to be recognised worldwide, and UK rights holders must be able to enforce effectively their rights against unauthorised uses, especially online. The new trade agreements can be an effective instrument to make that happen.

Now that the UK has left the EU, the Government must maintain efforts to make it easier for artists to travel in the bloc visa-free so that they are not prevented from being able to appear at short notice overseas for promotional purposes. Touring is an integral part of being an artist and a crucial source of income.

In November 2021, we welcomed the decision by the Spanish government to abolish post-Brexit visa requirements for UK artists on short-term tours. The decision means that UK musicians and their crew will no longer need visas for engagements of less than 90 days. It was a change of policy that was the result of extensive political engagement from the UK music industry. However, costly and bureaucratic restrictions remain across the EU that hinder the ability for UK artists to hold viable tours on the continent.

5. What are the biggest threats to the status of ‘soft power superpower’?

The UK’s role as a ‘soft superpower’ is at risk from changing global market dynamics.  The advent of streaming has opened up competition and opportunity for British artists who are now able to reach millions of listeners around the world and build an international fan base. In addition, the new streaming model has also catalysed an explosion of new artists entering the market. At the same time, investment in British artists is at risk from well meaning, but misguided, proposals for extra regulation in the UK.

Today, UK artists face enormous competition globally. In fact, 2020 was the first year in history that a British act did not place in our chart of the Top 10 biggest-selling acts in the world. The UK’s overall share of global music revenue slipped to around 10 per cent of the global total, down from a peak of 17% in 2015, whilst markets such as Asia grew by 9.5 per cent and Latin America by 15.9% in 2020.

In today’s globalised music landscape where any artist can have their music distributed worldwide, not all acts will break through to a significant global audience and, for those that do, it can take between five to ten years of world touring and record company investment for them to succeed globally.

That is why it is vital that the UK continues to have one of the most attractive regulatory regimes for creative investment. With its commendable focus on R&D nationwide, and one of the most comprehensive regimes to support the development and exploitation of intellectual property, the UK is an appealing option for overseas investors. Any changes to our current regulations risk threatening the strong position the UK has, particularly as we establish our position on the global stage following our exit from the EU.