Written evidence submitted by the BPI

 

Promoting Britain Abroad Inquiry

DCMS Select Committee – January 2022

 

About the BPI

The BPI is the representative voice of UK record labels. Our work champions the UK’s recorded music industry both at home and abroad. Our broad membership base, consisting of over 500 organisations, includes hundreds of independent labels, the UK’s three ‘major’ record companies and other music companies. Together, the BPI’s membership accounts for up to 85 per cent of legitimate domestic music consumption. This response is submitted by the BPI with the endorsement of its members.

Record label investment benefits the wider music ecosystem, not only supporting artists but also other music creators, studios and the live sector.

The BPI works with labels and artists to promote British music overseas. We administer the Music Export Growth Scheme (MEGS), a partnership between industry and Government which exists to boost British music exports and we provide wider exporting support to our members including co- ordinating trade missions, organising export training and masterclasses, networking opportunities and global events.

Additionally, the BPI owns and organises the biggest showcase for British music,, the annual BRIT Awards with Mastercard, and the prestigious Mercury Music Prize. It co-owns the Official Charts and runs the The BRIT Certified Awards programme, recognising artist achievement with the iconic Platinum, Gold and Silver Awards.

 

Britain’s success in music

Music is central to our national identity – within the UK and on the world stage. The UK is recognised worldwide for our outstanding musical talent, famous recording studios, iconic music venues and global cultural movements driven by innovative new genres of music – such as the New Romantics, punk, the British Invasion, Britpop and ‘girl power’. Our music scene has always drawn admiration and committed fandom from all over the globe. British artists are often known, not only by their music but by their hometowns; The Beatles from Liverpool, Amy Winehouse from Camden, Oasis from Manchester, attracting fans to visit those iconic locations.

 

The UK’s music sector is a global success story, being the world’s third biggest music market and the second biggest exporter after the US. 1 in 10 songs streamed globally are by British artists.[1] Prior to the pandemic, British music was thriving and although recorded music has continued to grow from streaming, we recognise the devastating impact Covid-19 has had on many in our sector – with a third of jobs being lost.[2] Music must be protected, not only to ensure that the UK has a thriving cultural sector which will benefit our own citizens, but for the wider social and economic benefits it brings, such as music tourism and exports. As we look to recover from the pandemic and cement our position globally post-Brexit, music and our wider cultural industries should be at the forefront of defining what it is to be British. The British public agrees, with UK Music finding that 59% of people believe that music improves the UK’s international reputation.[3]

 

The UK didn’t reach this level of success by chance, it has come about as a result of the substantial work and investment of those working in music. Record companies have played a central role in this. Their job is to discover, help develop and promote artists to achieve their greatest creative and commercial success. In the UK, recorded music companies invested over £250m in 2019 to discover new talent - together with marketing this makes up 40% of UK label revenue.[4]

 

Artists grow fan bases across the UK and around the globe via hundreds of different formats and platforms. This comes in no small part as a result of the extensive marketing and promotional partnership between labels and artists, in particular in the increasingly competitive global streaming landscape. This benefits artists, but also the tourism economy of the UK.

 

The enormous soft power that is wielded by British music is something that should be celebrated and protected. Exports have been growing rapidly in recent years, and the global streaming market is set to grow exponentially in the next decade. The UK is ideally placed to benefit from this global explosion in music streaming – underpinning further growth of the whole UK music economy. In order the maximise this opportunity, the UK’s gold standard IP framework must be maintained, including in free trade negotiations; and ongoing support is needed for independent SME labels and artists in the form of MEGS.

 

Music and Tourism

The UK music industry has a significant “pull factor” in relation to international tourism, whether it’s the opportunity to attend concerts and festivals, visit historical music sites such as Abbey Road or simply inspiring interest in wider British culture. As streaming has made the music market truly global, the need to promote British artists has intensified, while opening up greater opportunities to reach fans all over the world, and in turn attract music tourism to the UK. Additionally, music often goes hand in hand with TV and Film, another strong cultural export from the UK.

 

Prior to the pandemic, music tourism for live music events across the UK was growing steadily year on year - peaking at 12.6 million tourists in 2019.[5] This included 845,000 international visitors[6] who spent £899 each on average.[7] The UK had the second largest live music scene in Europe and globally 4 of the top 10 grossing tours of 2019 were headlined by UK artists (Ed Sheeran (1), Elton John (4), Rolling Stones (5), Paul McCartney (8)).[8]

 

Those attending live music events will usually utilise wider hospitality, transport and tourism services during their visit. This is true of large-scale festivals such as Glastonbury or even the BRIT awards which is organised by the BPI, and in usual years would welcome international visitors. It is encouraging to see that the Government recognises the role of music in the Tourism Recovery Plan, noting its contribution of £4.7billion of spending to the UK Economy in 2019, which was an increase on 6% from the year prior.[9]

 

The music industry is an ecosystem, and many are involved in the process of live music. Recordings fuel the live sector, and the future success of recordings can be bolstered by touring. For established artists, the release of an album is often supported by a tour and for newer artists, live performances at grassroots levels are vital for building a following. We must, therefore, ensure that live music can return to growth as quickly as possible, in venues of all sizes to the benefit of our vibrant music industry. If done so, the UK will also benefit from the economic boost by music tourism. Equally we must ensure that record labels are still able to continue to invest in British talent by avoiding regulation that could hinder investment into new artists and music creation.

 

We know the Committee has already taken time to consider of the impact Covid-19 has had on parts of the music industry, particularly relating to the closure of the live sector. To kickstart the promising trend of music tourism growth once more, the Government should focus on supporting the live industry to recover from the devastation caused by the pandemic. The BPI is a member of UK Music and supports the call on Government to cut VAT on cultural tickets and extend 100% business rate relief until the end of 2022/23. We also believe that the Government should keep support for live music in-line with any future restrictions needed to reduce the spread of COVID-19, so that the sector can be sustained whilst public health is prioritised.

 

Promoting Britain Abroad

Exports

 

As the world’s second biggest exporter of recorded music, well in excess of our relative population size, music is an important source of economic return to the UK.

The BPI supports our members and their artists to export British music overseas through numerous trade missions, training and networking with free masterclasses. We also engage closely with the Department of International Trade to ensure we have the most up to date information and can provide our membership with valuable insights.

Since 2014, the BPI has worked in partnership with Government to run MEGS, an innovative joint- funded initiative which awards grants ranging from £5,000 - £50,000 to SME and independent UK- registered music companies. The money assists in ‘breaking’ artists internationally, often those who have achieved domestic success are taking the next step to seeking to build a global following.

To date, MEGS has awarded nearly £4.5 million of Government funding to 302 artists across the UK and in a wide range of genres. This has generated nearly £52 million in UK music exports. The impact of Covid-19 and resulting lockdowns have impacted the artists in the latter rounds, who have had to curtail or reschedule their plans accordingly but despite this, the scheme is still reporting back £12 for every £1 invested.

In addition to the money provided by the Department for International Trade and the Department of Digital, Culture, Media and Sport, the music industry provides match funding which equates to 64% of total funding. We are proud to partner with Government and grateful to them for recognising the huge potential in recorded music exports. Without the scheme, independent labels and artists would not be in a position to fully fund the type of marketing and promotional work needed to connect artists and fans globally, and in turn maximise the opportunity to grow export revenues.

The scheme helps the industry play its part in the UK’s economic recovery, it strengthens our role as a newly independent trading nation and it is operating in a time when the global music industry is poised for very significant growth. Goldman Sachs predicts that the global recorded music market is set to grow from £15 billion to £30 billion by 2030. Each individual point of global market share gained by the UK is worth an additional £110 million: co-funding export support for the independent sector can make a very real difference in realising this export ambition. This means that by the end of the decade, with the right policy framework in place, export value from recorded music stands to double to £1 billion.

However, there is now greater competition than ever. Major new markets with high populations are just beginning to adopt streaming, such as India, Latin America and parts of Africa. At the same time, domestic markets are growing fast around the world, with British artists competing for attention with a much greater number of artists including acts from, for example, South Korea (K-Pop), Japan (J-Pop) and Latin America. This means that while the UK’s recorded music export revenue surpassed £0.5 billion for the first time in 2020, the UK’s market share has been gradually receding, to stand at around 10% now, from a high of over 17% in 2015.

Given the scale of opportunity to boost British music overseas and double export revenues, we are calling on Government to increase MEGS support. With the global recorded music market forecast to double in size by 2030, now is the moment of opportunity for British music to penetrate new markets and claim a significant share of global growth. We are delighted that the Committee has previously supported calls from the BPI to extend the funding of this scheme.

These SME and independent labels do not only suffer from a lack of funding and offices in potential export markets though they often lack sufficient knowledge and understanding of local markets too. To accompany the MEGS scheme, a more dedicated resource would assist SMEs in navigating the complexity of promoting their artists in these territories. We know it is a key ambition of the Government’s Export Strategy to engage SMEs and we recognise the recent creation of the export hotline and online service. However, we feel this service could be enhanced. The Government should pursue the creation of a Creative Industries Export Office which focuses on supporting the UK creative industries to compete on the global stage. We see this as an opportunity to support businesses to derive stronger commercial returns from exporting and play an ever-greater economic contribution in future, building on the £6bn of export value the music industry as a whole delivers each year.

By growing music exports, this will have a ripple effect in promoting Britain abroad, furthering inbound music tourism and ensuring the UK’s music industry remains one of the best and most popular music markets in the world.

Free Trade Agreements

 

Becoming an independent trading nation holds great potential for the future growth of British music. The BPI regularly engages with Government to ensure that music is represented in conversations on the global stage.

 

As the Government progresses its free trade negotiations, we recommend a series of high profile showcases for established and emerging British artists which would help to promote the UK, its culture and its music industry. They would be designed to enhance the UK’s competitiveness as British music faces a stronger challenge from US, Latin American and domestic repertoire, and support the UK Government in its diplomatic efforts in key markets. Despite potential limitations on overseas travel, virtual showcases are possible and – with sufficient resource – can be effective; in talent reaching global markets.

The UK has one of the strongest IP frameworks in the world, which sets higher standards that many other parts of the world in ensuring IP is protected. The Government should be ensuring that in any free trade negotiations IP is a key consideration and that our standards are not diluted. Additionally, we can use our negotiating power to strengthen the regimes of other countries with which we form trading partnerships. This includes:

We recognise that the Government is already engaging with industries regarding IP protection in negotiations and we welcome this.

Conclusion

The UK music industry is a strong asset which should be protected and valued, not only for its long cultural history which exerts soft power around the world but for the economic value it can bring, both in the form of exports and tourism.

The BPI calls on the Government to:

 


[1] https://www.bpi.co.uk/news-analysis/1-in-10-songs-streamed-globally-are-by-british-artists

[2] https://www.ukmusic.org/research-reports/this-is-music-2021/

[3] https://www.ukmusic.org/research-reports/this-is-music-2021/

[4] BPI data

[5] https://www.statista.com/statistics/482225/number-of-music-tourists-united-kingdom/

[6] https://www.ukmusic.org/wp-content/uploads/2020/11/Music-by-Numbers-2020.pdf

[7] https://www.ukmusic.org/research-reports/music-by-numbers-2020/ p. 24

[8] https://op.europa.eu/en/publication-detail/-/publication/4be2f11d-216c-11ea-95ab01aa75ed71a1/language-en/format-PDF/source-111483830 p. 24

https://www.kerrang.com/metallica-and-kiss-amongst-the-highest-grossing-tours-of-2019

[9] https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/992974/

Tourism_Recovery_Plan  Web_Accessible_.pdf