The Impact of Covid 19 on The Music Industry

Covid-19 is an unprecedented global pandemic that no one could’ve foreseen this time last year. Covid-19 has spread from the first cluster in the capital of China’s Hubei province to a pandemic that has so far killed over 200,000 people, with over 3 million who have had the virus. The virus has had a huge impact on many industries and as of now, no one is sure when things may return to normality and how we will recover from it. In this essay I will be focussing on the specific impact Covid-19 has had on the Music Industry and Musicians.

The UK followed other countries and shortly after introducing a social-distancing policy, they introduced a full lockdown policy. In an address to the nation on 23rd March 2020, the Prime Minister ordered people to only leave their homes under a list of “very limited purposes,” banned public gatherings of anyone not from the same household and ordered the closures of non-essential shops and businesses with immediate effect. Then on 22nd April England’s chief medical officer, Chris Witty, gave an indication that the measures may be in place until the end of the year, unless a vaccine is found sooner – which he added would be unlikely. Although the policies in place are completely necessary in order to keep people safe, for those working in the sectors that have been shut down, it was devastating news.

People working in the music industry are now facing unprecedented financial disaster due to coronavirus as everything has been cancelled for the foreseeable future. Music data company Viberate revealed that already over 300 festivals have announced cancellations or postponements, including some of the big names; Coachella, All Points East and for the first time in history the organisers of Glastonbury Festival have made the decision to cancel this year’s festival too. Although this has devastated fans, financially the effect has been catastrophic with Vibrate estimating that $3million were to be lost on ticket sales, with the estimated direct economic impact being $9.7billion. 

Amongst the festivals that have been cancelled the organisers of Liverpool Sound City have taken the decision to postpone the 2020 event until later in the year. In order to help artists who have had to cancel live shows, Sound City will launch a special live streaming platform and program called Guest House a weekly live stream that was launched on April 2nd, 2020. Each episode features five acts, each with a 30-minute programme broadcast from their homes. It gives opportunity for bands and artists to showcase their festival sets, as well as entertaining fans from the comforts of their own homes. Guest House will also provide a new revenue stream for acts, as well as giving fans opportunities to support their favourite artists financially in various ways. The platform has an introductory subscription price, with 50% of revenue being shared with artists at the end of every month. It also gives an opportunity for artists to offer merchandise, new music and any other products, giving them another chance to maintain their sales and have more revenue coming in. Sound City MD Becky Ares said: “The idea for Guest House came as a response to the awful situation we found ourselves in. We hope it will allow bands to maintain desperately needed income, as well as encouraging fans to get even closer to the artists they love and continue to support them where possible at this unprecedented moment in time.” 

Festivals are not the only area of the music industry that are going to feel an economic impact. Currently approximately 72% of people in the music industry are self-employed and with their places of work closing due to the lockdown, incomes are set to be devastated by the virus. (Malt, 2020). The Musicians Union published research warning tens of thousands of musicians are set for a financial crisis calling it a ‘job loss pandemic’. The report revealed that 90% of those working in the industry have already been affected, with job opportunities being down 69% compared to the same period last year. Horace Trubridge, General Sectary of the MU stated “Music is one of the few certainties we can rely on to provide happiness and relief in tumultuous times. But musicians – whether they work in theatre, teaching, orchestras or gig-playing – will feel the full financial force of this global disaster.” 

In March 2020, soon after the lockdown was put in place, Olga Fitzroy a recording and mixing engineer associated at the Associated Independent Recording Studios, described the UK Government’s approach to supporting the creative industries ‘tone-deaf’. Currently they contribute £111.7billion to the UK economy each year, however “The government has so far only guaranteed around £95 a week in Universal Credit for the self-employed, compared to up to £2,500 for employees.” Midge Ure well known Scottish singer-songwriter, echoed Fitzroy’s frustrations of the governments treatment of musicians saying “Most of these people are self-employed and now face a devastating future. At this time the U.K. government has nothing in place to help self-employed workers. It’s time to give a hand to the pole to generate untold wealth for the country.” 

The CEO of industry body the Association of Independent Music (AIM), Paul Pacifico, reveals that they are witnessing immediate hardship from the AIM member businesses saying that they are “struggling to figure out a pathway through this crisis, and from the self-employed whose income has dropped to zero overnight.” (Lunny, 2020). In response to this AIM launched its ‘hardship fund’ in order to support contractors and freelance workers in the independent music industry who have so far lost income for April and May as a result of the Covid-19 pandemic. The AIM fund is open to any contractors due to work with new and developing artists currently signed to AIM member labels who have lost committed income because of cancelled artists projects and do not qualify for other hardship funds on offer. These workers will include the likes of; tour crew members, producers, engineers, radio pluggers, graphic designers, stylists, publicists and more. AIM Chair Peter Quicke (MD, Ninja Tune) also said: “In this moment of global crisis it is so important for AIM to enable our community in getting help to those in most critical need.” (Music Business Worldwide, 2020). Paul Pacifico added: “The MU hardship fund is an amazing initiative, but, in reality, it only scratched the surface for these hardworking and taxpaying workers in music.” He also furthered Olga Fitzroy’s frustrations of the lack of government help saying, “The U.K. government needs to step up or face an even greater crisis once these people can no longer afford to pay their bills and feed their families.” With this in mind AIM have also created a petition to the government calling for a temporary income protection fun for the self-employed. The petition states “There are five million freelancers and self-employed workers in the UK who so far have not been supported by government measures to help the workforce through the Covid-19 crisis and yet they have had their sources of income cease entirely in many cases.” It goes on say “They must be a dedicated source of direct income support to compensate the self-employed for lost earnings due to Covid-19 preventative measures.” 

The Association of Music are not the only company that have been raising funds in order to support the people in the music community. Since the onset of the Covid-19 pandemic, Spotify has engaged partners across the industry to discuss how they could support artists and the creative community who have been deeply impacted by the effects of the virus. Though streaming continues to play a key role in connecting creators with their fans, numerous other sources of revenue have been interrupted or stopped altogether by this crisis. Spotify are partnering with other verified organisations around the world including; MusiCares, PRS Foundation, Help Musicians, Unison Benevolent Fund, Centre National de la Musique, Deutsche Orchesrer-Stufttung, Initiative Musik, and may more, Spotify are also continuing to add and work with more partners worldwide. So far Spotify itself have contributed $10 million to the cause and have updated their app to have a banner across the top of their home page, to bring awareness to the issue and encourage users to donate to the fund, where they can. 

British music licensing company PPL also announced on April 15th, 2020 that it will donate £700,000 to three different UK music industry hardship funds that have been set up as a result of the Coronavirus pandemic. The three funds they are donating to include: The Help Musicians Coronavirus Financial Hardship Fund, The Musicians’ Union Coronavirus Hardship Fund and the AIM Covid-19 Crisis Fund (already mentioned). PPL Chief Executive Officer Peter Leathem, said: “At PPL, we recognise the role of these Hardship Funds in providing a lifeline to those in the music industry who have been most impacted by the current crisis and we are delighted to be able to contribute to the funds established, to ensure financial support reaches those in need.” In response to the donation Help Musicians’ Chief Executive James Ainscough added “We gratefully welcome the financial contribution and continued support of PPL.” He continued saying: “Demand for financial support has been overwhelming and we are seeing first-hand how the monies are supporting the many thousands in the music community who desperately need it.” 

Meanwhile the UK music industry has also ramped up its call for government support. A number of the sector’s trade organisations including; UK Music, ISM, Help Musicians, MU, MMF, The Ivor’s Academy and the Music Producers Guild, have signed a letter urging the Chancellor of the Exchequer, Rishi Sunak to instigate specific measures to support the large number of freelancers and self-employed people working in the wider music community. The letter states “Covid-19 is having a dramatic impact on the workforce of the music sector, particularly on those who work on zero-hour contracts or who are self-employed. From live performers, to peripatetic music teachers, composers, managers, engineers and producers their work has come to an end overnight.” Whilst the Government have announced some economic support measures such as loans, grants and 100% business rates cuts in some sectors, although this will help some music companies, there has been little tangible support for freelancers and self-employed. 

The letter also says “the current welfare system is just not devised for a situation where the government is strongly advising the music sector to stop work. Much of the workforce is not entitled to any notice or redundancy pay.’ So, in essence “If they do not work, they do not get paid.” The letter also goes on to note how “other countries such as Italy, Ireland, Norway and Canada, have put in place emergency funds to support the self-employed in these uncertain times.” 

As well as the specific issues for the self-employed and freelancers, the letter to Sunak from the music industry also calls for increased measures to support the wider music industry, saying, “The UK music sector, which contributes £5.2 billion annually to the UK economy, needs urgent government help to avoid large parts of the sector being wiped out.” The suggested measures include an extension to business rates relief to all music companies, VAT holidays and other schemes to help music firms keep paying their staff. 

On April 26th, 2020 in response to the various calls for more financial help for the self-employed, the government announced their plans for economic support for the sector, an announcement that was widely welcomed by the music industry, although the sector also expressed its concern about the support not being available until June 2020. Chancellor of the Exchequer, Rishi Sunak announced a package of benefits for self-employed people, insisting it has taken longer to put together economic measures for such a “diverse population.” The scheme will benefit people who are formally registered as self-employed with the UK tax authorities, who make under £50,00 a year and who earned at least half of their income from freelance work in the 2018-19 tax year. It means they are able to claim a grant work 80% of their average monthly profits. The measures will help many people working in the music industry including; musicians, songwriters and producers. However, the grants will not be available until June 2020, which means many people who’ve had their income immediately hit with the lockdown, will likely still face hardship in the weeks ahead. In response to this CEO of cross-sector trade group UK Music, Tom Kiehl said: “the package will be a vital lifeline to thousands in the music industry where 72% of the workforce is self-employed.” However, in criticism he went on to add “We need immediate and urgent help – people are in desperate need with bills to pay. They need financial support now and cannot wait until the end of June for the scheme to kick in.”

UK Music also expressed concerns asking the government to answer questions on issues like: “how this support scheme will effect women who have been on maternity leave and could lose out because their earnings will be misrepresented.” And “There remains a need for support for those in the music industry who have not been self-employed for very long, including recent graduates, who will not qualify for this grant.” The government are yet to respond to the various issues that could stop some of the self-employed who need support from getting it. 

Other music industry organisations have also responded to the announcement from the government about the financial help for the self-employed including, Musicians Union Secretary Horace Trubridge who had previously talked about the financial devastation the lockdown would have on the self-employed said: “With over 90% of our 32,000 members being self-employed, todays measures are vital. We understand that implementing this system will be complex, but we now urge the government to work to get it in place as quickly as possible.” Paul Pacifico, CEO of The Association of Independent Music (AIM), who had also criticized the government’s response to the support of people in the music industry, responded and said: “We applaud the government’s speed and willingness in its efforts to support the most vulnerable at this time. Alongside our industry partners it is great to see that the independent music community’s voice has been heard and made a difference in calling for support for the self-employed.” He added, “Now we must make sure that these measures are accessible and implemented as rapidly as possible.”

So, in conclusion, when Olga Fitzroy said the government’s approach to supporting the creative industries was ‘tone-deaf’ I do not think she was alone in this view. There is a huge number of people in the music industry who have completely lost their income streams and been left devastated in these unprecedented times. Although the Government have listened to the calls to help the self-employed, there is a time lag in actually getting financial help as it won’t be available until June 2020, meaning people who are currently facing hardship will continue to face this difficulty until then.

The effort by well established companies to fundraise and donate money to the various Covid-19 relief funds is much needed, as had this not been available for people of the music industry who are now in crisis with no income, it is unimaginable to contemplate what circumstances they may have found themselves in otherwise. It also may mean that whilst people wait for the governments support, they are able to look elsewhere for financial help they will likely need.

There is no way of telling how long the Covid-19 lockdown will remain in place, and no way of knowing when things may return to some normality. This creates a huge amount of uncertainty for both people in the music industry and people all over the world. Music is a universal language that people, now more than ever, will need to get them through this time in lockdown. It is admirable that the music community has come together in an unprecedented way to support their own and with a sense of community never seen before.