The most important labels are taking a beating within the UK. Will they find yourself turning their again?
The following comment is from Music Business Worldwide’s UK founder and editor, Tim Ingham.
I assume that since you are a sentient person with internet connectivity, you’ve got enough motivational quotes for a lifetime.
So here’s a refreshing alternative: perhaps the greatest unmotivating quote of all time. It is from Kurt Vonnegut’s book Bluebeard.
It was first published in 1987, eleven years before Google launched a rudimentary search engine. And it is uniquely the most prophetic, yet debilitating, prediction of What The Internet Went And Did To Us that you could ever read.
“A moderately gifted person, who would have been a common treasure a thousand years ago, has to give up, has to take on another profession, because modern communication puts him in daily competition with nothing other than the world champions.”
Vonnegut commented on the mass media machines of the time: the printing press, terrestrial television, radio.
But he’s nailed a future where instant access to unparalleled entertainment – from all nations – has lost the wealth and self-esteem of local creative heroes.
It’s a trend that has been cruelly fueled by digital analysis.
Wow, 50,000 people listen to your music on Spotify every month? You and 71,000 others around the world, buddy.
(I didn’t conjure up this statistic: it’s on Spotify’s own Loud & Clear site, via a morality-destroying calculator for testing imposter syndrome.)
This ruthless reality is doubly tough for the UK music industry and its artists.
Britain is, after all, one of the most powerful cultural exporters of the past 70 years, with everyone from the Beatles to Queen to Adele forever changing the face of global pop music.
But it is proven to be harder to break a British music star around the world.
According to BPI, overseas (excluding the UK) music recording income from artists signed in the UK increased 6% in 2020 – but the world market grew faster, 7.4% (IFPI).
The BPI warns, “The UK’s total share of global music revenue is declining … the UK currently accounts for around 10% of total global sales, up from a high of 17% in 2015.”
In fact, 2020 marked the first year in history that a UK act was not included in the IFPI’s Top 10 Best Selling Acts (a list headed by South Korea’s BTS).
“Despite all of this, the big record companies continue to invest boldly in British artists in the expectation that the discovery of the next Adele / Queen / Ed Sheeran will fix a worrying trend in Blighty’s waning global power.”
In short, the global power of the UK market and artists is statistically shrinking. Artists from Latin America, Asia, Russia and elsewhere are eating up this world power and will continue to do so.
Do you need more evidence?
Check out this quote from Sony Music Group Chairman Rob Stringer – a British, no less – delivered during a podcast interview with Variety earlier this year.
Stringer talked about the obvious modern logic that today’s global hits can come from anywhere, not just from a handful of historically privileged nations.
“I know most of the charts around the world now; I’m not sure my predecessors had to [do that]… I think Great Britain is no more or less important than Mexico. “
He is adept at doing this.
Regardless, the big record companies continue to invest heavily in British artists, in the expectation that the discovery of the next Adele / Queen / Ed Sheeran will fix a worrying trend of Blighty’s dwindling global power.
According to BPI, the UK record labels combined spent a whopping £ 250 million (around $ 350 million) on A&R alone – a 50% increase over the same amount in 2014.
That is a lot of money that goes into the pockets of the artists.
The thing is, the UK is really not going to be the most hospitable place for these record companies anymore.
In fact, it will be outwardly hostile in 2021.
A report by the notorious DCMS selection committee earlier this year knocked the three majors down and called for an investigation into their UK market power.
Then the UK’s Competition and Markets Authority (CMA), which publicly applauded the DCMS report, decided to investigate Sony Music’s acquisition of AWAL.
This is a process by which AWAL could realistically be ripped from Sony property and sold in pieces. But it’s also a process that – with the approach of Brexit – doesn’t want to acknowledge that 80% of the streams for the average British artist are actually outside the UK’s borders.
And today (October 19th) the CMA went one step further and announced a one-sided “market study” on the economy of streaming in Great Britain – and thus also on the common market influence of the big labels.
Andrea Cocelli, Chief Executive of the CMA, pointedly said: “A market study will help us to understand the radical changes” [in the music market] and to provide an overview of whether competition in this sector is working well or whether further measures need to be taken. “
The big record companies now have billions of dollars in shareholders who, over time, will scrutinize every expense on the Big Three’s balance sheets. (Hello, Mr. Ackman, sir. Welcome to the party.)
Said shareholders will inevitably wonder whether the UK and its artists justify their current level of A&R investment – remembering $ 350 million a year – or whether that money should be better spent elsewhere, in faster growing markets like Russia, China …. and Mexico.
The current determination of some political circles to black-eye the majors in the UK right now is likely only to make such an idea more appealing to key decision-makers.
If you are only competing with the world champions every day, it doesn’t help if your own compatriots throw stones at you.
A version of the above comment first appeared in the Q3 issue of Music Business UK, MBW’s premium quarterly magazine covering the UK market.
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