«COUNTING THE NOTES The economic contribution of the UK music business A report by the National Music Council – November 2002 Preface This is the ...»
There is a lack of comprehensive systematic research on the scale of large scale music performances and concerts. Laing and York’s The Value of Music in London (2000) noted 600 significant music venues in London alone along with 1,000 licensed by local authorities for public entertainment. A survey conducted by researchers covering a week in November 2000 identified 720 music events with a potential London-wide audience. These included a wide variety of performances covering musical styles. Within the events surveyed there was a particularly large number of small events in the niche markets of jazz, folk, world and country music, which represented 48% of the events although just 8% of total audiences.
The largest single audience category was attributable to those attending dance music events in clubs.
Because this type of research is both local and not undertaken regularly, its significance is difficult to assess but it does depict a very varied grass-roots music scene, in the capital at least.
Data on attendances and ticket sales at large-scale concerts and events have been collected several times in the last decade by the Concert Promoters Association (CPA) based on surveys of its members. It is however not possible to generate robust trend data from the CPA Survey data, due to changes in the membership of the association. However information for the year 2000, based on actual statistics supplied by 23 members and estimates of figures for the remaining eight member companies indicated
Whilst CPA members are responsible for promoting the great majority of non-classical concerts in the UK at substantial venues, it is necessary to adjust their figures to account for ticket sales by non-members organising major concerts, which in 2000 included the Glastonbury Festival. Here we estimate that such shows represented 10% of the market, implying annual total ticket sales of £365m for concerts at major venues.
Musical events included within the total above represent only the most significant events and form only a small percentage of overall music performances in the UK. There are many extensive networks of smaller venues, such as specialist clubs for particular musical genres such as jazz, blues or folk and events in members’ clubs, pubs, hotels and holiday camps. Whilst there are no hard data on ticket sales in such smaller venues, A Sound Performance estimated that they represented approximately 25% of the total revenues from ticket sales at live non-classical musical events. Using the same ratio for 2000 generates total revenue from ticket sales of £487m.
Using information purely from ticket sales as an indicator of the scale of the live music sector understates the size and economic impact of the industry. Some industry estimates suggest that consumer expenditure on ancillary products such as merchandising, food and drink at music events adds up to more than the expenditure on admission tickets6.
Also at many venues such as pubs, hotels and holiday camps, there are no formal admission charges with the provision of music provided free as part of an overall leisure/entertainment offer. PRS collects license fees from venues such as members’ clubs, pubs, hotels, restaurants and holiday caravan parks which are, when above certain size parameters, based on those venues’ expenditure on live performance. These figures are included below in Table 4.3. Bearing in mind that the above figures represent only the larger venues within the respective categories they give some indication of the economic scale of grass-roots musical activity.
Tourism is one of the largest industries in the UK. It accounts for 4.5% of Gross Domestic Product (GDP) and employs 2.1 million people. The industry was worth approximately £74billion in 2001 with spending by overseas visitors estimated at £12.8 billion, plus £3.2 billion in fares to UK carriers. Domestic tourists spent another £58.8 billion..
‘Cultural attractions’ are recognised as a vital part of the UK tourism industry. These include visits to museums, stately homes and other heritage and countryside features as well as performing arts and musical events. When it comes to attracting tourists for short-break city holidays, performing arts, nightlife, and specific music events feature prominently within travel plans. Unfortunately there is little research available regarding how many tourist trips, both domestic and overseas, are motivated by a desire to attend performances, festivals, musical events or to experience Britain’s rich musical nightlife.
There is strong evidence, however, from historical information that a significant proportion of individuals visiting the UK made their decision based on a key factor of attending a performing arts, theatre, cinema, opera, ballet, or classical music concert.
Obvious tourist attractions such as the Edinburgh Festival, the Notting Hill Carnival and West End Theatre all have musical elements even though they are not classified as strictly cultural attractions.
Recent research in Scotland confirmed that cultural activities in general were an important factor in decisions to visit the country. The report states that between 1996 and 1998 UK residents took an 2001 Mean Fiddler Music Group Prospectus.
Source - British Tourist Authority.
The Overseas Visitor Survey ceased in 1996.
Culture and Tourism in Scotland, Scottish Arts Council/Scottish Tourist Board, 2000 – page 19 Counting the notes – the National Music Council report on the economic contribution of the music business average of 200,000 holiday trips per year to Scotland for cultural reasons (theatre, concerts, opera, ballet, museums, art galleries, heritage centres) and spent an average of £36 million. This amounts to some 3% of all holiday trips and 2% of all cultural expenditure in Scotland, where culture was the main purpose of the trip. Some 15% of all UK holiday visitors to Scotland participate in cultural activities as part of a holiday. In 1996, 58% of holiday trips to Scotland by overseas visitors included visiting museums etc. and 16% watched performing arts.
The Scottish Arts Council and VisitScotland’s Traditional Music and Tourism Initiative 1999-2002 was designed to increase visitors’ access to traditional music by bringing together musicians, venues, tourist organisations and local councils, and publicising events to tourists. Grants were made available to encourage traditional music events arising out of local activities. Audience surveys showed that although traditional music was generally seen as a secondary motive for holidays, tourists greatly appreciated the opportunity to attend music events and that access to traditional music would encourage them to make a return visit to Scotland. The grants made available were successful – “the impact of even modest sums has had a dramatic impact in enhancing entertainment for visitors and making traditional music available to them”. Musicians also benefited. One project supported, in Fife, was estimated by the organisers to have generated about £30,000 in subsequent bookings for artists for the £6,500 spent on showcase evenings. 47% of the audience members in Fife were from outside the area. It is intended that activities should be sustainable beyond the life of the project, and it was noted that there were “clear business benefits to individual traders (eg Pubs, hotels, halls etc) and many were persuaded of the case for investing more themselves in traditional music.”
4.3 Current issues
The live music sector has been less directly affected and is perhaps less directly threatened by technological change than the recording sector. Key processes, however, are changing the nature of the sector. The growth in the number and scale of the most substantial arena venues has been noted above, and alongside this the trend already well-established in the US and Germany for consolidation and vertical integration amongst concert promoters and venue owners has become significant in the UK.
Notable in particular is the growth of Clear Channel Entertainment, the dominant force in US live music promotion and venue ownership, by the acquisition both of UK promoters and of venues such as those in the former Apollo Leisure Group. The effects of such larger businesses in the sector on existing independent operations have yet to be fully determined, but the change comes at a time when the sector generally is competing with a much wider range of alternative leisure pursuits including expanding multiscreen cinema complexes, and the growth of home entertainment opportunities with increasingly sophisticated hardware and a wider offering of TV channels and new forms of software like DVDs. To compete with such offerings requires increasing creativity on behalf of the promoters and venue owners to appeal to particular groups of consumers. Thus, faced with less significant mainstream rock acts on tour in recent years, the industry has created a sub-category of tribute bands, cloning the likes of Abba, the Beatles, Oasis and the Rolling Stones, who can play regularly in quite substantial venues. Themed package tours, such as of 1970’s acts Motown Stars or 1960’s artists have been put together to appeal to older audiences; family shows such as the Tweenies have also lowered the age of typical audiences.
The live sector is often seen as the bedrock on which the music industry is built and its vitality at grass roots level in smaller venues such as pubs and clubs is generally viewed as fundamental to the future of the industry. One issue which has risen to prominence recently as representing a key impediment to the growth of live music in smaller venues is the requirement to acquire public entertainment licences. These are required whenever there are more than two performers in a pub, bar or restaurant, hence the reference to the issue as the “two-in-the-bar” rule. Musicians’ representatives claim that the ruling is seriously damaging to the development of the live music scene and are now arguing the case for live music to be allowed automatically in bars and pubs, provided it is secondary to the main business and subject to adequate safety and noise regulations.
Described in A Soundtrack for Scottish Tourism, SAC/VisitScotland, 2002
No precise data on international earnings from live pop and rock performances exist. It is clear however from analysing the gross box office receipts from the US magazine Pollstar’s Top 100 North American Tours that UK artists command a much higher proportion of that market than they do for record sales.
Table 4:2 - North America concert data
Within these totals a key role has been played by a handful of established superstar acts such as Elton John, The Rolling Stones, Eric Clapton, Rod Stewart, Sting, Ozzy Osbourne and Sarah Brightman. In these three years the only UK acts whose careers started in the 1990’s or after who feature in the Top 100 tours are Radiohead, ranked 43rd in 2001 and Oasis, whose tour with the Black Crowes was ranked 93rd, also in 2001.
Any attempt to estimate the net flow of invisible earnings into the UK from all overseas touring based on these North American figures is problematic. Using the same extrapolations as those in A Sound Performance would create a flow from international touring into the UK of £77m in 2000.
Similarly it is difficult to be precise on overseas payments to international touring artists performing in the UK. In using the same ratio of imports to exports as was used in A Sound Performance produces an exports figure of £23m, in a year when the top five UK arena tours were all by British artists.
4.5 Employment and value added in the touring/live music industry
The key categories of employees within the live music sector are 1) the musicians themselves, 2) their management, tour agents and concert promoters, 3) those employed at venues, be they large arenas or small clubs and pubs, and 4) those engaged in ancillary activities such as the manufacture and sale of artist-based merchandising and sound and lighting personnel. For the purposes of this section of the study the last category are not treated as part of the core music industry but as ancillary suppliers.
For all of these categories there are problems in generating accurate estimates of employment numbers and also value added.
The number of full-time equivalent musicians engaged either in recording and/or the live sector is a particularly difficult figure to ascertain. Difficulties arise as most musicians are self-employed and many are part-time, following a number of complementary careers both within music (such as in giving instrumental tuition) and outside the industry. A Sound Performance repeated the estimate used in The Value of Music (1996) of 35,000 full-time equivalent musicians in the pop, rock and country sectors and since then there has been little new information in the area. Two figures which might give some kind of pointer to the total are the number of members of the Musicians Union, which in 2001 were 31,000 and the number of individual musicians registered with PPL, Aura or PAMRA to receive distribution of public performance income, this number being 23,000 in 2000. For the purposes of this survey the figure we are using is 26,000, being the total Musicians Union membership of 31,000 less an estimated allowance 5,000 for those included in the classical sector (see next section). This is an area however where more detailed research is needed, particularly to appreciate the multiple career paths undertaken by many musicians.
In estimating musicians’ earnings from live performance, in the non-classical and theatrical sector one can combine hard data from the PRS with estimates based on typical industry cost structures.
Given the large number of venues in these categories below the PRS thresholds it is reasonable to increase this total by 50% to generate a figure of £178million for musicians’ earnings from “grass roots” venues. To this one needs to add UK musicians’ earnings from the major concerts in the UK and abroad noted above, which based on conventional industry cost structures add around £186m to produce a total of £364m.