1. UK Music is the umbrella body representing the interests of the commercial music industry across all the nations of the United Kingdom (see annex for full list of members). We campaign and lobby for the collective interests of the commercial music industry on behalf of artists, musicians, songwriters and composers, record labels, music publishers, studio producers, managers, and music licensing organisations. We strive to promote the extraordinarily successful commercial music sector across Wales, England, Scotland and Northern Ireland and support policies that drive growth and promote music to society.

2. Our Music by Numbers Report 2019 (here) showed the UK music industry was in robust health pre-COVID-19, employing 190,935 peopleacross the UK. Wales has a rich historyof music and based on this data,music contributed £260 million GVA to the Welsh economy in 2018. Music tourism (people visiting Wales specifically for music) attracted 336,000 people to Wales in 2018 (almost 100,000 more than the entire population of Swansea), these tourists collectively contributed £124 million of direct and indirect spend and supported 1,754 jobs. Wales has put on iconic performances at the Principality Stadium,hosted the BBC’s Big Weekendin Swansea and stages a huge variety of festivals ranging from the Green Man Festival to the Wales Harp Festival. However, the COVID-19 pandemic and the necessary public health measures have placed this entire live industry on life support. We believe the below measures are vital for the health of Welsh music;

- Flexible support -that can provide help to music businesses throughout the supply chain from venues to office-based companies – including support for jobs and freelancers. It must recognise the dire need of the commercial sector.

- Restarting Live Performances – Live music needs to be restarted in a safe and economically viable manner with financial incentives to help businesses cope with physical distancing or where possible manage the risk of COVID-19. As it is not currently possible to obtain cancellation insurance cover against COVID-19, promoters are taking a huge financial risk confirming or rescheduling concerts before a vaccine is in place. We would appreciate support from the devolved governments for the introduction of a Government-backed insurance scheme to help live music get back up and running.

- Clarity of Messaging – Businesses need to know what the risks are and how to manage them, what they will be expected to do and when. A road map with indicative dates along with clear and detailed guidance is urgently needed.

Immediate Impact of Coronavirus

1. The immediate impact of COVID-19 has been little short of catastrophic for the Welsh commercial music industry. The Musicians’ Union (MU) have reported that 90% of their members have seen a drop in income. The Music Producers Guild (MPG) has found that producers and sound engineershave lost an average of 70% of their income and their average earningsloss in March was £3,300,rising to

£4,300 in April. The phonographic industry through the BPI reports that physical music sales have fallenby 50% in the periodMarch to May, which in turn threatens the future of record stores.1 The Creative Industries Federation (CIF) has found that across the creative industries in Wales, 10% of GVA will be wiped out along with 14,900 (26%) of jobs. We would anticipate this will be higher in relative terms in the music sector in Wales as across the UK in our sector has a 54% projected fall in turnover and a 60% fall in FTE (Full Time Employment)roles.2

2. The reasonsfor this catastrophic impact on the sector can be found in the structure of the music industry. The sector has a very high proportion of self-employment, with 72% of workers being self-employed. This is five times the 14.4% self- employment rate across the rest of the Welsh economy.3 The majority of these workers are reliant on activity in live music venues, festivals and recording studios that have been heavily impacted by the “lockdown”.

3. For example,the activity in a recordingstudio will supportnot only its own staff but an entire music eco-system including song writers and composers, session musicians, producers and sound engineers as well as the headline artists supported by managers and team, who all work to create the music that acts as the core product which supports the whole of the wider recorded and live music sectors. Similar economic networks can be found around live music venues. It is important that the entire ecology is supported. For many crew, lighting and sound engineers, producers, and artists if music is not being played then they are not being paid.

4. It is common for those working in the music industry to have careers of a portfolio nature, with a mixture of PAYE and self-employed contracts (34% of respondents to a survey by the MU said they worked at least one extra job).4. Often they may trade under a single person company, drawing their pay in dividends This has restricted the support that those in the industry can qualify for under the Job Retention Scheme (JRS) as well as the Self-Employment IncomeSupport Scheme (SEISS), 38% of responders to an MU survey do not think they qualify for either scheme, which matches work done by the Institute of Fiscal Studies which also estimates that 38% of the self-employed across the workforce do not qualify for either scheme.5This would accountfor 27% of employees in the music sector. This extends beyond artists to managers, producers and technical staff.

5. Furthermore, recording studios and live music venues are unable to generate any revenue while closed. The Music Venue Trust (MVT) reports that costs at a value of £524,000 per day are being sustained daily by Grassroots Music Venues

1 https://www.musiciansunion.org.uk/Home/News/2020/Mar/MU-General-Secretary-Sends-Personal-Message?feed=801abc79-dc9c-471a-85ff-4a3a36bf8a3b

2 https://www.creativeindustriesfederation.com/sites/default/files/2020-06/20200619_OE_Slides.pdf

3 https://statswales.gov.wales/Catalogue/Business-Economy-and-Labour-Market/People-and- Work/Employment/Persons-Employed/statusofemployedpersons-by-welshlocalauthority-measure 4 https://www.musiciansunion.org.uk/Files/Reports/Industry/The-Working-Musician-report

5 https://www.ifs.org.uk/publications/14787

(GMVs) across the UK, with no income available to meet them. As a result, 90% of the entire grassroots network have been threatened with closure during this crisis.6 Venues of any size have been hit with many arenas also under threat with the National Arenas Association reporting 75% of staff as furloughed in May. Venues are often in prime retail estate, if they cannot meet rent payments then they risk eviction by landlords. With the moratorium on commercial rentalevictions coming to an end the need for action to prevent mass closures cannot be overstated. While recent UK Government announcements on funding are welcome, it is important to ensure that Welsh Government delivers accessible funding to live music venues (as it did through the Creative Wales Grassroots Music Venues Fund) as well as to the rest of the music supply chain.

6. Welsh festivals such as Wakestock face similar issues to live music venues with further problems related to their revenue model. Primarily a festival is an annual event and makes the entirety of its revenue in sales in relation to a single point in the calendar year. With most festivals scheduled for the summer and autumn, the Association of Independent Festivals (AIF) anticipates that 90% of festivals this year will be cancelled. The pre-lockdown fall in sales means that even where customers have retained their tickets for the following year rather than claim refunds, these businesses are relying on an even lower than usual level of January to March income to sustain themselves until next summer. An AIF survey also found that 98.5% of festivals were not covered by insurance for communicable diseases. Given the risks of local lockdowns, festivals are likely to wait until their “slot” in the 2021 calendar before putting on the event. This also has a knock-on effect with a survey of the events industry supply chain revealing that 69% of companies who responded had liquidity for three monthsor less, even after current Government measures had been introduced. The annual nature of festivalsneeds to be borne in mind when considering support. Festivals also have specific difficulties accessing supportas they often rent the land they use and it is therefore vital that how festivals might access supportis actively considered when designing funds.

7. The commercial music industry is also entwined with the broader economy (particularly retail and leisure) and has been hurt by the closure of certain sectors of the economy to combat the epidemic. Rights holders receive no royalty income from the playing of music pubs, clubs and bars while these places are shut, PPL and PRS for Music have introduced a number of temporary licensing concessions for affected businesses, but this will have an effect on industry income.The closure of the high street has curtailed sales for high street music retailers who have seen sales fall by half.

8. It is also unclearwhen this periodof uncertainty for the industrywill end. Economic modelling carried out by venues has shown that putting on indoor live music events while social distancing remains in place is not commercially viable. Consumer confidence remains fragile, a survey for ITV’s Peston found that 40% of gig goers may not return to festivals or events until there is vaccine. This raises the importance of a clear timetable for the return of live music from the Welsh Government, which should include indicative and conditional dates to allow industry to be able to plan ahead.

9. The gathering of an audience and the shared experience of music is the core product that all music venues sell, no matter the size. Therefore, social distancing

6 http://musicvenuetrust.com/2020/03/grassroots-music-venues-in-crisis-music-venue-trust-call-to-action/

has an enormous impact on this experience, and therefore the venues and the rest of the supply chain that is geared towards delivering this experience (including crew, lighting and sound engineers, producers etc.). While the sector has taken great stridesin innovation sincethe pandemic, for example with live streamedgigs, these efforts do not generate a sustainable level of replacement income. Music is a low earning sector with the average musician earning £23,059 and many rely on live performances just to make ends meet.

10. Music retail, particularly independent outlets, are also an important part of the commercial music industry, often providing important spaces for collaboration as well as being worth over £20 million to the Welsh economy. They have been heavily impacted by the closure of the high street, and as with the rest of the retail sector anecdotal evidence suggests that the bounce from re-opening has been less than anticipated. Given the importance of their physical presence they may well need further support where possible.

Medium Term Consequences

11. As the lockdown gradually eases, phased economic activity will return to many sectors. However, the closure of live music venues and festivals threatens to wipe out music tourismfor the rest of the calendar year. The UK live music sector across the UK is set to lose an estimated £900 million in GVA this year alone,and the loss of music tourism stands to lose Welsh businesses £93 million.

12. The difficulties of operating live music venues, recording studios and rehearsal spaces under social distancing measures need to be addressed by the Welsh Government. Live music venues as well as the businesses and workers that provide technical skills to stage a performance, will be among the last to return. The simple re-opening of these venues should not be seen as a solution in and of itself. This applies to two areas in particular – singing and wind instruments and the need to maintain social distancing within a venue.

13. We understand that on singing and wind instruments, guidance is still being developed. However, in England guidance has required a much larger distancing radius for these activities as the effect of the dispersal of aerosols by these activities is investigated. We urgently need clarity from Welsh Government on whether these extended measures will be insisted on or if they can be replaced with mitigation (and if so what) in detailed guidancefor performing arts activity. The financial implications of this must be recognised if these businesses are to survive. The particular impact of distancing measures on the ability of classical orchestras to perform also needs to be recognised.

14. Any return to work for the live music sector needs to safeguard the health of the public, employees, artists, contractors and the financial viability of the venue. Stakeholders have made representations to us that they will not be able to turn a profit with less than 80% of normal capacityon at least some nights.While it should be noted that capacity of above 60% will be all but impossible for many venues under any form of social distancing. While based in England, the example of the Southbank Centre is indicative in highlighting the position many venues in Wales find themselves in. Remaining closed until 2021 will cost them £5 million, whereas re-opening under social distancing would cost £11 million.7 Given the necessity of these measures for public safetywe would advocatefinancial subsidy of live music

7 https://www.theguardian.com/culture/2020/may/25/southbank-centre-warns-it-may-have-to-stay-closed- until-spring-2021

venues whilethese measures are in effect.If venues remain closed, consideration should be given to the effect this will have on the rest of the music ecology. For many businesses and workers in the sector if music is not being played then they are not being paid.

15. Unlike the Scottish Government, the Welsh Government has not yet indicated a date for the return of live performances. The UK Government has allowed limited outdoor performances from 11th July and stated in guidance that some form of “pilot” will be required before the return of indoor live performances.8 We accept that any dates would have to be contingent on progress in controlling the disease but a clear conditional timetable with indicative dates for the return of outdoor and indoor socially distancedand non-socially distancedperformances, as well as clear and detailed guidance for performing arts activity, is urgently needed from the Welsh Government to allow businesses to plan.

16. The ending of the “lockdown” should not be the end of support for commercial music in Wales. It is very likely that Welsh live music venues and the wider live music ecology will continue to lose money while other businesses resume something akin to normal trading. Therefore, the commercial music sector needs additional support to bridge the gap including for freelancers and creators as well as the wider music supply chain. Given the general perils for the sector we would welcome confirmation that pubs and bars will be allowed to play recorded music when they reopen.

Case Study

17. Le Pub is a grassroots music and art space in Newport, it has existed for 28 years and is a community space with a rateable valueof £25,000. It hosts 300 events per year, through staff wages, artist paymentsand payments to suppliers it is worth

£275,000 pa in direct payments to the Welsh economy. While Le Pub welcomed the Grassroots Music Venue Fund (citing its usability) as a positive step, it should be noted that the £19,000 awarded will only cover one month of standing costs (£15,500, bills, utilities/wages), therefore highlighting the need for further support to ensure hubs like Le Pub can survive and rebuild in the recovery.

Gaps in Support

18. We welcome the unprecedented measures the Welsh Government and the UK Government have taken to support the sector. The Creative Wales fund for grassroots music venues set up by the Welsh Government helped support 22 venues and represented an important step forward in recognising the support that the commercial music sector needs. However, it must be noted that the total available from the fund remained less than the outgoings of the venues. The fund has distributed around £400,000 as per the Minister’s Written Statement on 24th June.9However, the outgoings of Le Pub alone for one quarterare around £46,500, which is over one tenth of the entire fund. Therefore, with the recognition that music venues are likely to be shut for longer than other businesses we would welcome a renewal of this fund after the confirmation of the £59 million funding consequential of the UK Government’s recent announcement of additional funding for the culture sector, all of which must be spent on supporting arts and culture in Wales. Furthermore, we would note that direct support to venues doesnot

8 https://www.gov.uk/government/publications/our-plan-to-rebuild-the-uk-governments-covid-19-recovery- strategy

9 https://gov.wales/written-statement-creative-industries

necessarily support the broader music ecology, as with no performances the venues will not be paying artists, technical businesses and the rest of the supply chain.

19. On gaps in supportmore generally, while we accept that many of this relates to UK Government policy, we note that in cases such as the Scottish Government’s Newly Self-Employed Hardship Scheme, action has been taken without additional funding to bridge the gaps and support workers in desperate need of help.10

20. We would welcome additional support for music businesses that do not pay Business Rates directly (many music businesses are based in shared premises) or that do not qualify for existing grant funding due to the type or size of the business, such as certain recording studios and some festivals. Supply chain companies also often struggle to qualify for support.

21. While we welcomed the introduction of the JRS and SEISS, there is little support available for those who do not qualify for either of these schemes, such as those who are mostly paid via dividend and the newly self-employed. Other groups that have been disadvantaged by the structure of SEISS include those who have had extended sick leave or maternity leave in the last three years.

22. These gaps are relevant to considerations of further support. With 38% of responders to an MU survey not qualifying for either scheme, the gaps in support have forced workers with highly specialised skills and talentto the verge of quitting the industry. The same survey found that 19% of musicians were considering quitting the industry.11 Support for these individuals is urgently needed.

23. The industry itself responded with emergency funds such as that run by Help Musicians, as well as many of our member organisations such as PRS for Music, AIM, MU, and MMF. PPL and BPI have contributed to and coordinated funds while MVT has also set up a fund to save grassroots music venues. However, these funds have seen unprecedented demand and are intended as short-term support, therefore they can only stretch so far. Support for the broader commercial music sector and job creation should be a part of a further support package. It should be noted that while historically commercial music has not required subsidy, there is now a prime economic argument for its support.

24. We are also concerned about a possible gap between the tapering of employment support and the re-opening of music venues. As it stands venues in both Wales and England cannot open while at the same time being asked to contribute more to the JRS. We would welcome work to ensure that music businesses are not penalised for being unable to open. We would also ask for engagement between Cardiff Bay and Westminster to ensure that this gap between what they are allowed to do (through devolved public health advice) and what they are supported to do (through UK Government financial support schemes) does not widen. While we support the Welsh Government making decisions on the basis of what they deem best for public health in Wales, cross working is necessary to ensure the survival of music businesses reliant on live performances, whichis not limited to the venues themselves.

25. The new funding for arts and culture announced by the Culture Secretary on 6th July and the £59 million consequential funding for the Welsh Governmentis very

10 https://findbusinesssupport.gov.scot/service/coronavirus/newly-self-employed-hardship-fund

11 https://liveforlivemusic.com/news/musicians-union-survey/

welcome. All of this additional fundingmust be spenton arts and culture to provide the immediate support many music businesses need. This should have a broad and inclusive eligibility to allow creators, festivals and supply chain businesses to access support. Creatorsand supply chain businesses such as lightingcompanies, along with the venues themselves, are all critical to the long-term health of the sector. The issues laid out in this paper affect venues of all sizes and therefore there should be no cap or floor on eligibility for support. There should also be recognition that unlike the subsidised arts sector, commercial organisations may be unused to appealing for funding.

26. Consideration should also be given to supporting the industry’s recovery. We note global programmes have fulfilled this role. For instance, New Zealand’s support package for the creative sector included both employment supportfor creatives as well as a discrete funding stream for contemporary music.12 Ensuring support also boosts the broader eco-system as well as venues would help support a swifter recovery and prevent a long term loss of skills.

Long Term Consequences

27. The long-term consequences for the Welsh music industry are dependent on a number of factors. The severity and duration of the pandemic is one, as well as how quickly public confidence in attending music venues revives but above all the degree to which the Welsh Government is successful in keeping core industry infrastructure afloat. The CIF Report on the impact of the crisis has calculated a three to four-year recovery cycle for the industry which may be treated as a baseline for recovery.13

28. As new talent relies on small to medium venues, recording studios and independent retailers to help start their careers, the loss of these integral parts of the musiceco-system would cripplethe sector and prevent new talent enteringthe industry (as set out in our Securing Our Talent Pipelinereport here). But the venues themselves also need other businesses and workers to stage performances. An exodus of technical skills and talent due to individuals being without work until the venues re-open needs to be prevented to ensure a successful return to business.

29. Protecting the value of artists, ensuring that the sector can monetise new ways of performing emerging from COVID-19 will be vital to the medium term health of the industry.

30. Live music will not truly return in its previous form until a treatment or vaccine is found or the virus is controlled in such a way that social distancing can be relaxed. The sector as a whole needs to be supported until we reach that point and wecan then begin to rebuild and recover.

31. It should also be noted that many in the industry are having difficulties accessing insurance even for performances due to take place this autumn, given the risk of a second wave and another lockdown period. This uncertainty leaves (particularly larger) venues in the invidious position of either not putting in place a schedule for the autumn or effectively staking the entirebusiness on the autumn schedulegoing ahead with no safety net. While we accept this is not a devolved competence, any work the Welsh Government could do in partnership with the other UK Governments on this would be welcome.We would appreciate support for the

12 https://www.beehive.govt.nz/release/support-arts-and-music-sector-recovery

13 https://www.creativeindustriesfederation.com/sites/default/files/2020-06/20200619_OE_Slides.pdf

introduction of a Government-backed insurancescheme to help live music get back up and running.

32. The Welsh Government should also consider making funding available to encourage building back better. While large financial outlays are beyond venues at this point, funding could compensate for that to encourage them to make themselves more energy efficient(such as the ARBED schemesretrofitted homes), or be used to stimulate innovation throughout the music supply chain.

33. Consumer confidence remains weak with a survey by IPSOS-MORI finding that 67% of respondents would be uncomfortable about returning to large events post- lockdown.14 To overcome this, the Welsh Government could look to introduce a public facing advertising campaign to encourage the people to return to live music venues once it is safe to do so, to support the venues themselves and the broader music ecology.

34. Finally, it should be noted that music is a part of a cultural ecosystem with music syncs being very important to film, TV and game production. For example, Wales was recentlyused as a filming locationfor the BBC’s recent hit His Dark Materials. Each production is a chance to highlight Welsh music; however, in a competitive landscape opportunities will go elsewhere if Welsh music does not recover. Therefore, a thriving Welsh musicindustry can be a part of a broader Welsh cultural ecosystem.

Brexit

35. The COVID-19 crisis has stalled the export and import of live music, as festivals and live performances are not going ahead either in Wales or elsewhere at this time. This threatens a sizeable chunk of the Welsh music industry. If the industry is to rebuild in 2021 the Welsh Government should be prepared to encourage music tourists to Welsh performances, venues, and festivals. The Welsh Government also needs to ensure that support reaches festivals as well as freelancers and small companies in their supply chain to ensure that they survive until next year’s festival season.

36. Brexit will complicate the resumption of touring, both for EU acts looking to play in Wales and Welsh acts looking to play in the EU. It will also affect most organisations looking to hire up and coming musical talent from the EU, adding costs and bureaucracy where it was not present before and drawing companies that previously will not have previously engaged with the Home Office into the Sponsorship system.

37. The new Immigration Rules (that will apply to all musicians looking for work in the UK after the end of the transition period) stipulate these musicians should meet a “going rate” of £27,500. If this is intended to reflect what an average UK musician receives in a year it is not a figure that we recognise. Our own Music By Numbers 2019 report estimated the average yearly income of musicians to be £23,059.

38. We are also concerned about the emphasis on the need for a job offer, this may prevent the skills we need entering the Welsh music sector as work is normally contracted on a self-employed basis. We would welcome support from the Welsh

Government in engaging with the Home Office to ensure that the immigration rules reflect the realties and needs of the commercial music sector in Wales.

39. Parts of Europe are opening up faster and can providean income sourcefor artists and agents that could potentially enable quicker recovery from COVID-19. However, the reserves that are usually utilised to advance these tours are now depleted. The likelihood of visa costs, carnets, VAT and tax filing across Europe will see increased costs at the very time when artists and agents need reduced costs. Therefore, an export supportfund to allow artists and agents to recover from COVID-19 costs, without the burdonsome additional costs of Brexit would assist faster recovery.

Conclusion

40. Music businesses in Wales are absolutely committed to keeping their employees, collaborators and the public safe. However, to survive as businesses they need help from the Welsh and UK Governments. That should include:

- Flexible support -that can provide help to music businesses throughout the supply chain and broader music ecology to office based companies – including supportfor jobs and freelancers. It must recognise the dire need of the commercial sector.

- Restarting Live Performances – Live music needs to be restarted in a safe and economically viable with financial incentives to help businesses cope with physical distancing or where possible manage the risk of COVID-19.

41. We welcome the UK Government’s £1.5 billion fund for the arts sector and the consequent £59 million additional funding for the Welsh Government, which must be spent to support arts and culture in Wales. We would urge the Welsh Government to build on its work with the Grassroots Music Venue Fund to ensure that a comprehensive business and employment support package is implemented in Wales.As well as to extendit as far as possibleto the broader commercial music sector to protect supply chains and keep talent in the sector. If the UK music eco- system is not supported, the eco-system will not survive.

Annex

UK Music’s membership comprises: -

• AIM – The Association of Independent Music – the trade body for the independent music community, representing over 850 small and medium sized independent record labels and associated music businesses.

• BPI - the trade body of the recorded music industry representing 3 major record labels and over 300 independent recordlabels.

• FAC – The Featured Artists Coalition represents and promotes the interests of featured recording artists in the music industry.

• The Ivors Academy - The Ivors Academy is an independent association representing

professional songwriters and composers. As champions of music creators for over 70 years, the organisation works to support, protect and celebrate music creators including its internationally respected Ivors Awards.

• MMF – Music ManagersForum - representing over 800 UK managers of artists, songwriters and producers across the music industry with global businesses.

• MPG - Music Producers Guild - representing and promoting the interests of all those

involved in the production of recorded music – including producers, engineers, mixers, remixers, programmers and mastering engineers.

• MPA - Music Publishers Association - with 260 major and independent music publishers in membership, representing close to 4,000 catalogues across all genres of music.

• Musicians’ Union - Representing over 32,000 musicians from all genres, both featured and non-featured.

• PPL is the music licensing company which works on behalf of over 100,000 record companies and performers to license recorded music played in public (at pubs, nightclubs,

restaurants, shops, offices and many other business types) and broadcast (TV and radio) in the UK.

• PRS for Music is responsible for the collective licensing of rights in the musical works of 114,000 composers, songwriters and publishers and an international repertoire of 10 million songs.

• UK Live Music Group, representing of the live music sector with a membership consisting of: The Entertainment Agents’ Association (TEAA), Association for Electronic Music (AFEM), Association of FestivalOrganisers (AFO), Association of Independent Festivals (AIF), Concert

Introduction