What's in It for Me? Why the UK Music Industry Is More Valuable Than Ever
The arts are a luxury.
Those five words can and should make any artist’s blood boil. It’s close-minded and, at the very least, ignorant.
The truth is that more than a ubiquitous part of your life, the arts are a lifeline for both creator and consumer.
So, instead of suggesting that UK musicians and artists who cannot find work in the pandemic should retrain and find different jobs, it’s time to look at the opportunities.
If you’re still wondering “what’s in it for me?”, let us give you the rundown.
The UK Music Industry Is an Economic Powerhouse
You already know the saying: musicians do what they do not because of the riches, but because it’s their calling. With that said, we can’t ignore the (literal) value of the industry, particularly in UK-based companies.
If we do, we risk creating a crater in the economy we might never recover from.
A 2019 study by Music By Numbers revealed the UK music industry “is doing fantastically well […] the success is not down to one particular sector, but the whole industry working together to deliver a massive contribution to the nation.”
But it does warn that significant challenges are ahead if the nation doesn’t protect and nurture the talent pipeline to keep on producing global superstars.
Let’s step back and look at Big Hit Entertainment, management label of the hugely popular South Korean K-Pop group, BTS. Even amidst a world of turmoil for the arts, Big Hit reported a 49.7 billion won ($42.4 million) profit for the first half of 2020.
Just recently, it priced its initial public offering (IPO) at $115 per share. Due largely to BTS’s success, the pseudo global export firm is attractive enough that 98% of institutional investors said they would pay the top-range price or more for a slice of shares.
So what does an Asian company have to do with the UK music industry?
Simply put, it’s a model to follow and a reminder that forgetting about UK based companies will harm those that have the potential for growth to become the BigHit of the UK.
“On any metric, our music industry is a key national asset that delivers for this country at home and abroad. And its impressive trajectory meant it was set to be the British success story of the coming decade.”
Music Investments from Private Fortunes Are Growing
Merck Mercuriadis, founder of The Family (Music) Limited and Hipgnosis Songs Fund Limited, said: “Less than a year ago we set out to demonstrate to the financial community that proven hit songs were as predictable and reliable, and therefore as investable as gold or oil.”
His verdict came true.
After spending big to obtain stakes in catalogues created by renowned songwriters and buying rights to No.1 songs, HSFL’s total lifetime raise comes to just under £350m.
A 2019 Rolling Stone article posed the following question: “If you could invest money into an artist’s music, in a manner akin to the stock market – enjoying a significant financial return should your favourite-backed act become the next Drake or Billie Eilish – would you do it?”
Ten years ago, this would’ve sounded like a nightmare. However, today, thanks to the success of the music streaming business, it’s a very viable prospect. UK startup Songbook is already following suit, letting fans crowdfund an artist’s next album, EP or single and in turn, it gives them a cut of the master/publishing rights, from which they earn royalties from three to 25 years.
This proves that great songs and their creators are the music industry’s most valuable currency while delivering a fantastic return for investors.
Music Is A Valuable Asset
Before the pandemic, the arts were the fastest growing sector of the UK economy, contributing £111.7bn gross value added. They exported £36bn in services worldwide and accounted for almost 12% of UK services exports.
But if we look at the data with a magnifying glass, we‘ll see that the true value of core UK music industry is nothing short of £3.5 billion.
Music tourism overseas visitors to UK shows, Festivals, and employment in the live music industry played an enormous role in this contribution.
Statistics like these are a clear indicator that despite challenges, fans still like music. Set aside the cultural and social values, it is in the UK’s government’s best interest to do what they can to support one of the industry’s that is keeping its economy afloat.
To ignore the impact that the arts has, particularly during uncertain times, is to throw real jobs and real money under the bus. More than just willfully ignoring the benefits of upkeeping an industry that is wrongfully labelled “unessential”, it rejects opportunities that can catapult a dwindling economy.
If you’re asking yourself “what’s in it for me”, let us tell you, “enough for you to change your mind.”