The major labels are taking a beating in the UK. Will they end up turning their back?

The following op/ed comes from the UK-based founder and publisher of Music Business Worldwide, Tim Ingham.

I’m going to assume that, what with you being a sentient human with internet connectivity, you’ve had quite enough motivational quotes thrust at you for one lifetime.

So here is a refreshing alternative: perhaps the greatest un-motivational quote of all time. It’s from Kurt Vonnegut’s book Bluebeard.

It was first published in 1987, eleven years before Google launched a rudimentary search engine. And it’s singularly the most prophetic and yet deflating forecast of What The Internet Went And Did To Us you could ever read.

“A moderately gifted person who would have been a community treasure a thousand years ago has to give up, has to go into some other line of work, since modern communications put him or her into daily competition with nothing but the world’s champions.”

Vonnegut was commenting on the mass-media machines of the age: the printing press, terrestrial television, radio.

But he nailed a future where instant access to peerless entertainment – from all nations – has seen the erasure of prosperity and self-worth for local creative heroes.

It’s a trend that has been cruelly reinforced by digital analytics.

Wow, 50,000 people are listening to your music on Spotify each month? You and 71,000 others around the world, pal.

(I didn’t conjure up this stat: it’s on Spotify’s own Loud & Clear site, via a morale-crushing, Imposter Syndrome-verifying calculator.)

This unmerciful reality is doubly harsh 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 and Adele changing the face of global pop music forever more.

But breaking a British music star across the globe is getting verifiably harder.

According to the BPI, overseas (ex-UK) recorded music revenue from UK-signed artists grew 6% in 2020 – yet the global market grew faster, up 7.4% (IFPI).

The BPI further warns: “The UK’s overall share of global music revenue is slipping… the UK currently accounts for around 10% of the global total, down from a peak of 17% in 2015.”

Indeed, 2020 was the first year in history that a British act didn’t place in the IFPI‘s Top 10 of the biggest-selling acts in the world (a list that was led by South Korea’s BTS).

“Despite all of this, the major record companies gamely continue to invest heavily in UK artists, anticipating that the discovery of the next Adele/Queen/ Ed Sheeran will remedy a troubling trend of Blighty’s waning global power.”

In short: the global power of the UK market, and UK artists, is statistically shrinking. Artists from Latin America, Asia, Russia and elsewhere are eating into that global power, and will continue to do so.

Try on this quote from Sony Music Group Chairman, Rob Stringer – a Brit, no less – delivered during a podcast interview with Variety earlier this year.

Stringer was discussing the evident modern logic that today’s global hits can come from anywhere, rather than just 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 don’t think of the UK as any more or less important than Mexico.”

He’s astute to do so.

Despite all of this, the major record companies gamely continue to invest heavily in UK artists, anticipating that the discovery of the next Adele/Queen/ Ed Sheeran will remedy a trend of Blighty’s waning global power.

In 2019, says the BPI, UK record companies jointly spent a whopping £250 million (around $350 million) on A&R alone – up by 50% on the same figure in 2014.

That’s a lot of money going into the pockets of artists.

Thing is, the UK is now really not becoming the most hospitable place for these same record companies.

In fact, in 2021, it’s getting outwardly hostile.

An infamous DCMS Select Committee’s report from earlier this year slammed the three majors, calling for an investigation into their UK market power.

Then, the UK’s Competition and Markets Authority (CMA) – publicly applauding the DCMS report – decided to investigate Sony Music’s acquisition of AWAL.

This is a process that could realistically see AWAL ripped from Sony’s proprietorship and sold off in pieces. Yet it’s also a process that – with wafts of Brexit – doesn’t appear keen to acknowledge that 80% of streams for the average British artist actually take place outside the UK’s borders.

And then today (October 19), the CMA went one step further, announcing a unilateral “market study” into the economics of streaming in the UK – and, by association, the major labels’ combined market influence.

Andrea Coscelli, Chief Executive of the CMA, said pointedly: “A market study will help us to understand the radical changes [in the music market] and build a view as to whether competition in this sector is working well or whether further action needs to be taken.”

Meanwhile, the major record companies have billionaire shareholders who, as time rolls by, will be scrutinising every expenditure on the Big Three’s balance sheets. (Hello, Mr Ackman, sir. Welcome to the party.)

Said shareholders will inevitably question if the UK and its artists warrant their current level of A&R investment – $350 million a year, remember – especially considering the political backlash now brewing in London.

Those shareholders might instead suggest that this money would be better spent elsewhere, in faster-growing markets like Russia, China…. and Mexico.

The determination from some political quarters to give the majors a black eye in the UK right now is only likely to make such an idea more appealing to key decision-makers.

If you’re in daily competition with nothing but the world’s champions, it doesn’t help when your own countrymen are throwing rocks at your head.

A version of the above op/ed first appeared in the Q3 issue of Music Business UK, MBW’s quarterly premium magazine covering the British market.

You can subscribe to MBUK and MBW’s other physical magazines through here.Music Business Worldwide

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