Oh, dear reader…
Since my last column (only a month ago), the world has changed beyond recognition and the ramifications of this crisis are starting to impact throughout the music industry.
Ahead of exploring all this, I’d like to start by taking a moment to remember those we have lost. Friends, family, loved ones, healthcare workers and industry legends, but also those fighting for their lives as I type this. I’m sure I speak on behalf of our entire industry in sending eternal thanks to the frontline workers fighting to keep us safe and keep us alive.
This virus has changed everything, and you can be sure it’s also about to reshape what we know to be “normal”.
I believe the wider music industry must play a part in making sure every sector, company and human can weather this deadly storm.
It is fair to say it’s been an odd time here at Deviate as all of this has unfolded. I feel very fortunate and humbled that we have been inundated with work requests as the industry, globally, shifts all its efforts online. But, on a more important note, we’re also in daily communications with the World Health Organisation on various initiatives for the entertainment industry to support the emergency relief efforts and help distribute key messaging for as long as it’s needed. If you’re reading this and want to know more about any of that, please feel free to reach out to me directly.
However, amidst the crisis I want to have a look at just how far-reaching Covid-19’s impact on the music industry has been already – and examine some of things we can do to ensure each sector survives.
The first, and most widely-reported side of our industry to fall, was live. It’s been utterly devastated, with the live giants losing well over 25% of their stockmarket value in a matter of days. Festivals were cancelled; traders lost revenue; touring plans were destroyed; and our incredible crews and session musicians were left with nothing (although I am aware of some incredible tour managers pivoting to utilise their skills running ops for various NHS projects).
Our tour bus and transportation companies are losing all work (though some are now heroically helping to house health workers near hospitals after long shifts); production companies have been hit; artists, managers, agents and ticketing companies are losing income (and some of the cheeky resellers even asked for bailout help whist laying off their workforce, I’m sure regular readers can all guess what I think of that)… But this sadly is just the tip of the iceberg, for one sector. The true impact goes far beyond this and is potentially devastating for many.
Streaming consumption habits have been hard to predict given the unknown nature of this situation but after an initial dip (I suspect as the entire world was glued to their news channels, stopped commuting and stopped listening in offices), they’re showing signs of recovery for artists as people turn off the news and find other ways to entertain themselves and their families. I would warn though that, as the true economic impact of this crisis hits, we must brace for a mass global move to free tiers. That would have a profound impact on all rights-holders, many of whom have made clear they can’t survive on streaming income alone as it is.
Distribution and retail issues are rife with major delivery and retail partners rightfully prioritising essential products and deliveries. I’m aware of some big acts who can't even access their physical stock as it’s locked away in warehouses all over the world and unable to be moved.
Independent record stores, along with independent venues, have closed their doors and, believe me when I say it, are now fighting to survive. I am, however, aware of several D2C stores that are seeing triple the number of usual orders and of one digital distributor who saw four times the usual amount of uploads to their service last week.
We are also seeing parents globally adding some focus to arts and music as part of home schooling. I hope when we emerge from this situation the government will think twice about its lack of support and funding for these subjects. The industry, alongside community educators, is working hard to ensure that teachers are supported and equipped with legitimate tools to provide music learning online (simultaneously helping the creatives behind the scores being taught).
There are also sadly some profound and potentially long-lasting issues on the horizon at collection societies and PROs as every restaurant, event, venue, festival, bar and licence payer is closed, indefinitely, globally. With cancellations and closures across the board, this also brings into question what happens in 12-18 months when low public performance revenues from this period hit the cashflows of labels, publishers, artists and songwriters just when their live business might be starting to return to normal.
There are already issues emerging within record labels with some furloughing elements of their promotion teams. Traditional promotional ops are in free fall as the media figures out how to adapt beyond self-filmed broadcasts from homes. I am aware of some of the plans in the UK around this and sincerely hope they can be realised. We’re also losing traditional print media in places, with the likes of the much-loved Kerrang! Suspending its print edition until July.
Deep breath, there’s more… Some of the music industry’s most loved small to medium music studios are in free fall. These studios are as vulnerable as venues but many I’ve spoke to don’t qualify for the grants available and have lost all their income. To make matters worse, they obviously won’t have anything booked in post-lockdown so there is no end in sight. Many of these studios were battling for survival pre-outbreak and are dangerously close to the edge now. The industry must examine ways to help them and quickly. They play a vital part in the music ecosystem. The big studios, many of them owned by large music companies, will weather this, but where will emerging and mid-level artists record if these facilities no longer exist post Covid? Not everyone can afford the price tag of the giants, or record in their bedroom.
Looking at release schedules, it’s again a mixed bag. Digital-focused releases are, in some cases, moving forward, while physical-reliant releases and anyone relying on touring and outdoor advertising are, on the whole, moving back to Q4 (which I believe is optimistic at best in terms of touring). But, if the current timeline continues as it appears to be rolling out, you can be sure Q4 is going to be an absolute clusterfuck in every sense.
And yes, artists are self-streaming from their homes, in their thousands. This has led to a notable uptake in streaming stats for some, and the stuff of nightmares for others. Now may be a good time to remind people that it’s possible to pre-record and apply some quality control content while still utilising livestream functionality on some platforms. The huge uptake in livestreaming has also called into question existing (or, often, non-existent) licensing and remuneration for livestreamed content. Although I am aware of at least two major platforms working as quickly as they can to remedy this, we are a long way off being fully licensed on most of the prominent livestreaming platforms on the market.
Make no mistake, managers’ income has been slashed, and many have been left high and dry by the support packages on offer. Not to mention the army of self-employed people across all professions that keep our industry moving and the legion of music-makers who are their own businesses entirely, hit on all sides whilst trying to keep agile and engaged with their fans.
Many music industry award shows and conferences could be cancelled or rescheduled. This may seem like a moot point, but it’s important to realise many of these events are also vital fundraisers for the organisations and charities that host them. We are already working with some organisations on ways to deliver these digitally, if needed.
CPM (Cost Per Mille) on Facebook is at an all-time low. This is something we’ve been discussing with clients as we roll out advertising campaigns across the world, pushing music in a variety of forms. The CPM crash is not just applicable to Facebook, we are seeing this widely. As the world’s market changes so too do big brands’ plans for product launches and advertising, many pulling their spends entirely. I would argue that, while the entire world is at home and glued to devices, now may well be a very good time to place some digital ads for your acts. Although I say that while very wary we are entering possibly the biggest recession the world has ever seen. And also wary that this will have huge ramifications for ad-funded platform stream rates.
Not everyone will survive the economic fallout of Covid-19 without help
Commercial music opportunites are limited but far from stopped. As some industries, such as gaming, boom in lockdown, I am aware of several big plays for music there, and I am confident we’ll see music programming across broadcasters return soon. On the other hand, all big name content creation has stopped. This has impacted the revenues of many publishers working to engage new repertoire in productions, and hit classical publishers particularly hard, as hire, scoring and studio incomes vanish. The broadcasting of theatrical works is inspired but did anyone notice the dependence on music to carry and orchestrate these incredible performances? When will the stage doors open again? All genres and all sectors are being hit right now.
We can perhaps take heart that radio is seeing a huge resurgence as people want both music and a human touch in these isolated times. Thank you to the BBC in particular, who are working their backsides off to ensure the music industry can play a part in informing, educating and entertaining during these uncertain times. They and other broadcasters must continue to recognise and reward the commercial music which lifts audiences.
There has been an incredible array of crisis funds launched to help those most in need already. In the UK I’d like to give an extra special shout out to Help Musicians, AIM, Live Nation, PRS For Music, the Music Venue Trust, the Musicians’ Union, the Arts Council and all their donors. The speed at which they’ve formed these funds and been able to implement tech partnerships to distribute money is a truly momentous achievement and I know they have already provided vital help to thousands of applicants. On behalf of the music industry, thank you.
This is nowhere near a full list of the impact of Covid-19 on the music industry but I hope it goes some way to explaining that it’s not just the live industry suffering. We must now examine how we get through this year and beyond together, leaving no one behind. We will all be judged for years to come on how we handled this crisis, I urge you all to keep that in mind as you make critical decisions over the coming weeks and months.
There’s already a lot of finger pointing within our industry: “Why haven’t they set up a fund?”, “Are they going to pay?,” “They haven’t paid enough”. But that’s a race to the bottom. What we need to do right now is work together. All sectors, to ensure the survival of our industry.
This situation has highlighted how interconnected we are as sectors and I would argue it has also shown that, under a stress test, no business model is an island.
I am sadly aware of many musicians and writers who, on facing the evaporation of live and public performance income, are now seriously questioning why income from streaming is insufficient to subsist upon. I suspect we’ll hear a lot more about that in the coming months. There will be difficult questions for the industry to answer, but answer we must.
There is a highly interdependent circle of life in music, one I think we are all too quick to forget in the race for success and market share. But now is the time to nurture those relationships and examine those procedures. Do they work going forward? If not, every sector in the industry needs to examine the short and long-term changes that are required to get through this.
The Government’s support is incredibly welcome but it needs to land in the short term, to be accessible inclusively and not leave anyone behind. Our industry also needs varifocal lenses, with an eye on recovery, at that crucial Q3/Q4 stage and beyond. All of the early investors in talent (including the talent itself), take the business risk to develop music-making into commercially valuable assets. These micro-engines should be seen as first in line to catalyse recovery for our sector.
The lockdowns will lift, in part, for some sectors this year, but I am confident this won’t be the case for all and we don't yet know the full impact of what's happening across the world, let alone what that looks like even when things are lifted. But we do know that not everyone will survive the economic fallout without help.
There are many things in discussion behind closed doors and whilst I wouldn’t normally comment on them here, it’s important we kick these ideas around. Things like royalty repayment holidays from the majors for any acts who need them (many indies already offer this to out-of-cycle artists); shifts in the percentage paid to artists and songwriters for stream rates; the rate-per-stream value itself; the redistribution of blackbox income to those who really need it; large organisations advancing some payment dates; the redistribution of funds allocated to large UK cultural events to grassroots venues; the payment holidays for restaurants, venues and bars who may not ever get to reopen if we don’t help lighten their load. The list is endless, but it’s vital we examine all of this, as an industry, together.
I would urge you all to first and foremost protect yourselves, your loved ones and the most vulnerable. But also, if you or your company are able to do so, protect those who make our industry possible.
Be kind, be fair and be safe.
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AIM (Association Of Independent Music)
MMF (Music Managers Forum)
PRS For Music
Spotify/PRS Foundation Covid-19 Fund
Music Venue Trust
AIF (Association Of Independent Festivals)
AIP (Association Of Independent Promoters)
Arts Council England