Can the music business survive coronavirus?

The UK industry is the most successful in the world after America, but labels, venues, studios, artists and road crews are all under threat as the pandemic brings everything to a halt. Helen Brown talks to those affected and asks how we protect this jewel in the crown

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For the first time in 89 years, the solid oak doors of Abbey Road Studios have closed. The north London recording studio has been at the reverberating heart of British music since its grand opening. It was here, in that inaugural year of 1931, that the ageing Edward Elgar conducted Land of Hope and Glory, and it remained open during the Second World War – Glenn Miller made his final recordings there in 1944. The Beatles made it famous in the 1960s. Kate Bush, Sting, Blur, Radiohead, Amy Winehouse, Adele and Ed Sheeran have all recorded there. But today the studio website informs all comers that: “In line with the strict measures introduced by the UK Government to limit the spread of Covid-19, the Studios are now closed for at least three weeks, with just our security team remaining in place.” And with Abbey Road’s technical wizards all in lockdown, even the studio’s online mixing and mastering services are no longer available.

Abbey Road’s closure is emblematic of the near-total halt in activity across the music industry. Geoff Taylor, chief executive of the BPI (British Phonographic Industry), says that, before the pandemic, the nation’s music industry remained the world’s most successful exporter of music after the US and had been “reporting a strong performance in 2019, with revenues rising 7.3 per cent, the fourth successive year of growth”.

But this spring’s growth has been nipped in the bud. “The most profound effects of the virus on the music industry have been cessation of all live performances and gigs, recording sessions and video shoots,” says Taylor. “This puts at immediate risk the livelihoods of thousands of musicians and other self-employed workers in music and across the creative industries more widely. We are very concerned about the impact on artists, venues and freelancers right across the music business. According to UK Music, which represents the whole music industry including the live sector, around 72 per cent of those who are work in the music industry are self-employed.”

While the arena-sized venues and major festivals might weather the storm, the smaller venues are in serious peril. Mark Davyd is CEO of the Music Venues Trust which represents 670 grassroots venues across the UK. “Of those,” he says, “114 describe themselves as ‘relatively secure’ for the next eight weeks, which leaves 556 under threat of imminent closure. That’s 83 per cent of the entire grassroots sector. The main problem for these venues is rent. The government action so far ensures they can’t be evicted, but all that does is defer the eviction order to the day the government changes the rules.”

Venues in the major cities might be at greater risk. Businesses with a rateable value of under £51,000 can get access to a small grant of between £10-25,000. But businesses worth more than that do not qualify. This means that venues of similar capacity outside of the M25, for example, will qualify, but those of exactly the same type within it will not. Davyd sighs as he describes “a small, 120-seat jazz club with a £78,000 rateable value that looks doomed as things stand”.

Davyd says the venues will also struggle to pay staff wages. “Although many can furlough their staff and claim the money back, they need to pay staff through March and April and they won’t be able to get it back until May. Most venue owners are either classified as directors of limited companies or sole trading entities, paying themselves by dividends, which mean they don’t qualify for self-employment help. Beyond that they have commitments to loans and suppliers.”

While the Music Venue Trust is “appreciative of what the government has done… they’re offering blunt instruments at the moment which don’t suit the specific needs of the industry. We are working with the government and pressing them to move on to the detail very quickly. Over 200 venues have applied for the Coronavirus Business Interruption Scheme Loan and, so far, none of those venues have been successful. They cannot persuade the banks – which are not used to dealing with the cultural sector – that they are a viable risk.”

The second major area of concern is the physical music business. With the large retailers like HMV and independent shops closed, and online retailers such as Amazon (estimated to sell around half of physical music products in the UK) and supermarkets concentrating their efforts on home essentials and not restocking CDs, sales have fallen sharply. Taylor confirms that sales are “down by around 50 per cent with further falls likely over the coming weeks. Online mail order has been able to take up some of the slack, but there is the risk that reduced staffing and logistics constraints may affect the physical distribution chain as the virus spreads. Physical formats remain important for the UK business, generating £325m in retail spend in 2019, and for consumers, who love building a physical collection and enjoy the experience and community of browsing in a record store.”

Del Day, who has been running Union Music Store in Lewes, Sussex, for the past 18 months with his business partner Danny Wilson, says that his shop is “as much a cultural community hub as a commercial enterprise. We thrive on people dropping in for a cuppa, having a chat, offering each other their views and picking up some new vinyl. We sell some quite obscure, left-field stuff and had also started a monthly album club. We’re lucky that, we have very accommodating landlords and that, because of the personal connection, a lot of our customers will either order online from us or wait to come into the shop once all this is over. But our online sales up until now only accounted for around five per cent of total sales and we won’t be ordering any new stock. We are obviously dependent on the Royal Mail to deliver those online orders and I do appreciate that delivery companies are obviously prioritising essentials over obscure vinyl cuts at the moment.”

A member of the public wearing a protective mask walks on the Abbey Road pedestrian crossing (Getty)

Last Wednesday saw the launch of the #loverecordstores campaign, encouraging music companies and high profile musicians to pledge support for independent shops like Day’s. Musicians, artists, actors and celebrity music fans around the world are being asked to film short video clips of themselves talking about, for example: what independent record stores mean to them, where their favourite store is, what records and artists those stores have helped them discover, and, most importantly, to encourage their fans to continue to shop online with their favourite stores wherever possible.

Jason Rackham, managing director of independent music network [PIAS], who is leading the #loverecordstores initiative, added: “Independent record stores have played a key role in supporting and developing artists and their music for decades, so now it is time for music companies and the artists they represent to step up and give something back. We must support these small businesses if they are to survive this crisis and at the same time we can still play a big part in helping them to continue to introduce their customers to new music. By speaking directly to their audiences about the importance of record stores and encouraging music fans to continue shopping with them online, artists can play a big part in helping secure the survival of this vital part of our industry.”

Early endorser Paul Weller said: “I’d be lost without my favourite record shops: Rough Trade, Sounds of the Universe, Honest Jon’s and all the other independents. Let’s all keep them all going in this very strange time.”

Geoff Taylor says that “the BPI is determined to help protect the sector as much as it can, but revenues will obviously decline in the short term, and we are concerned that the crisis may threaten the ongoing viability of some physical music retailers. The support for the high atreet announced by the government is encouraging but more needs to be done, and we are writing to the chancellor to suggest a temporary freeze on VAT for physical music once stores reopen, to help the sector get back on its feet.”

Labels face different challenges according to their size and the profile of their business. “The major labels are of course part of bigger global concerns,” says Taylor. “Sony Music, for example, is part of Sony Corp, which has just announced a $100m global relief fund to bring help to those impacted by Covid-19. While major labels all have well-developed streaming businesses, and so do many independents, some indies cater to fanbases which are heavily dependent on physical product, often producing lovingly curated deluxe edition box sets of classic catalogue releases. Those labels will be hardest hit by the ongoing store closures.”

One such is the small, Exeter-based Occultation Recordings, run by Nick Halliwell since late 2008. “In 2015 we released seven albums, and all did well but in mid-2016 costs rocketed and UK sales fell,” he says. “2018-19 was disastrous – impossible to take decisions with constant cliff-edges so we were in suspended animation. 2020 was to be 11 months of relative certainty, enough to run a proper release campaign and see results. We’re due to release the new Revolutionary Army of the Infant Jesus album in June. The band were planning dates in the UK and EU – they’ve a cult following in the US and northern/eastern Europe. We’d already started the PR campaign, investing most of what money the label has, and paid for recording, mastering, vinyl cutting, manufacturing of CDs, PR and a vinyl manufacturing deposit. We’re all under huge stress.”

Halliwell says that in small businesses like record labels, “most of us self-employed, [we] are left to fend for ourselves. There are things we can do: we rush-released a Rev Army track called “Prayer” as a free/pay-what-you-like download on Friday. For now, we’re still able to ship mail order, although we’ve already reduced this to shipping once a week maximum and are still waiting to find out what local Royal Mail arrangements are. However, we’ve no idea when – or if – Rev Army LPs will be manufactured or whether it’ll be possible to ship them to purchasers, let alone distribute to retail. We won’t survive if we’re not able to sell them. Digital income has been negligible since the advent of streaming. The whole point of 2020 was that we were going to give it all we had in an attempt to expand our audience, whereas now at best we may be able to sell to the converted.”

Peter Duckworth, who has managed the nation’s beloved brand of Now That’s What I Call Music! compilation albums for three decades says that physical sales of the recent albums (often bought in supermarkets and petrol stations) are already down 10-15 per cent and the release of Now 105 – originally scheduled for last week – has been delayed. “It’s the first time we’ve delayed an Easter release since the 1980s. We launched a new streaming app recently and we’ve made that free to access – with families in lockdown streaming more music from the 1980s than other decades.”

Taylor hopes that streaming helps to insulate many labels. “Many fans have switched from physical formats to streaming services such as Spotify, Amazon Music and Apple Music,” he says. “Streaming now accounts for around 60 per cent of revenues and, with its digital supply chain, can keep functioning through the crisis more easily than the physical music sector.”

Last year 75 per cent of UK music consumption was via streaming. Taylor explains that 2019’s 7.3 per cent rise in record label revenue was largely attributable to the “continuing increase in streaming income, which leapt by 21.8 per cent to stand at £629m. That’s the highest level of annual trade income in well over a decade going back to 2006 (£1,162m), though it is still down by about a fifth on the post-Millennium peak of 2001. We were starting from a relatively healthy place, but obviously we expect the 2020 figures to be affected by the present crisis – we will not know to what degree for some months.”

Although pundits were initially predicting a rise in music streaming, Taylor says that “as yet we are seeing this only to a limited degree on advertising supported services such as YouTube, but not on music subscriptions, which are much more important economically. So far it looks like the boost on home consumption more directed towards TV and radio. Any increase at home is being counterbalanced by the lack of listening to music during a daily commute.”

More people than usual have been tuning into the radio. Mike Read – the former Radio 1 DJ who now streams shows online with United DJs Radio – says that “people really are turning to the familiar voices of DJs like old friends. Our streams are up. We also try to play a good variety of music, including new songs, to ensure we give coverage and royalties to the artists who are struggling right now.” That said, he acknowledges that radio plays don’t translate into many banknotes. Radio stations don’t pay artists directly. Artists must apply to either the Performing Rights Society (PRS) or the Phonographic Performance Limited (PPL) to collect their royalties, which vary depending on the listenership numbers for the station. Recent estimates showed that the PRS was collecting £13.63 per minute for music played on Radio 1, £24.27 per minute for Radio 2 and £5.25 per minute for Radio 6 Music.

Because of the closure of studios and the cessation of video shoots, many artists are now delaying album releases until the late summer or early autumn. Others – like Dua Lipa and Pearl Jam – managed to put records out last week as scheduled.

Canadian electropop star Kiesza (best known for 2014’s multi-million selling dance anthem “Hideaway”) phones from New York to tell me that the crisis has forced her to “get creative” as she steams ahead to get her third album – Crave – out in June. “I’ve made a video of me dancing around my apartment to one single. I spent last night editing footage we had already shot on my computer – I’m learning how to work on effects and all sorts of stuff I hadn’t done before. I’ve had to cancel all the live performances scheduled to promote the record and I’m losing sleep worrying about all the musicians, roadies, dancers, directors and venue owners who are losing their livelihoods because of it. The A-list stars, like Taylor Swift [who just gave her favourite Nashville record store enough cash to keep it afloat for three months] have pockets deep enough to support their teams. But I started my own label – Zebra Spirit – last year and it’s a challenge.”

Kiesza was dropped by her “unsupportive” label after a 2017 car crash left her with a traumatic brain injury. “I have spent a lot of time in bed, in my own form of isolation,” she says, “So I am more prepared for this than some people. And I came through the experience feeling more appreciative of what I have. Crave is a joyful album and I want it to lift people through of this strange scary time. I’m looking at doing online gigs, hopefully with my guitarist, whose entire summer schedule has fallen through. He was going to be touring with Lenny Kravitz and… now what? I want to help.”

Artists who have never tried online gigging before can take notes from experts like Janet Devlin, the Northern Irish singer-songwriter who hit the mainstream via The X Factor in 2011. She tells me she began performing online around six years ago via the StageIt site, which combines facets of ticketed gigging and busking by allowing viewers to purchase pay-what-you-can digital tickets to streamed concerts, whist also allowing for monetary digital “tips” paid during performances.

“It was a bizarre concept at first,” she says. “I made the mistake of pricing tickets too high and only made about £25. Then I learned to set the ‘admission’ low and let people tip if they were enjoying it. That way I could make £4-5,000 for a good gig.”

Devlin has struggled with anxiety and says the platform has allowed her “to connect more deeply with fans who also struggle with their mental health. There are nights when people need music but cannot face getting up and out of the house, having strangers jostle up against them.” She also says the interactive nature of online giggling means that “while you only catch the odd shouted sentence from fans at a live show, online people can type out their emotional responses and you can see their thoughts flashing up on your screen. It’s a different kind of intimacy.”

Devlin says there’s no way she would have been able to make her upcoming album, Confessional (out in May), without the revenue raised by online gigs. Her new single, “Away with the Fairies”, was produced by Jonathan Quarmby (Lewis Capaldi, Tom Walker, Benjamin Clementine) and written by Janet and multi-platinum songsmith Paul Statham (Dido, Kylie Minogue and Sophie Ellis-Bextor).

The hope is now that artists can keep themselves – and others – afloat emotionally and financially during the pandemic. Mike Read – who presents a weekly show about songwriters on United DJs Radio – says this might also be a great time for aspiring songwriters to send material to big name stars looking for new material while lockdown restricts their other activities.

Taylor says that, longer term, the BPI is pressing the government “to help companies and individuals to bounce back as soon as things start to normalise. One simple but potentially hugely beneficial idea for music stores, for example, would be to temporarily remove the VAT on CDs, vinyl and other physical products, treating them equally with books. This would give them to leeway to bring prices down to encourage consumers back into retail stores and start generating some much-needed sales. It is essential that [the] government completes a favourable UK-EU free trade agreement, then moves on to trade agreements with the US, Australia, New Zealand and Japan. Government should prioritise protecting the strong UK Intellectual Property Protection framework, creating the conditions for greater investment in the UK into new content (through new tax credits for investment in music in the UK and appropriate regulation of digital platforms), and strike a bold new partnership with the industry to promote UK music overseas. If it does this, the next few years can still be enormously positive for British music and we can make a bigger contribution than ever before to the UK economy.”