Before discussing and sharing solutions on what’s ahead for the global music industry during the Midem Digital Edition, starting on 2 June, discover this article highlighting the covid impact on our industry.
The Covid-19 pandemic has left no industry untouched this year, including sparking a music industry crisis that has left artists and songwriters, music companies and digital services alike grappling with the implications.
How is coronavirus most impacting the music industry? The sudden shutdown of the live music business in March in many parts of the world is the most obvious example. Tours and festivals have been cancelled or delayed, leaving a gaping hole in this year’s earnings for artists and ticketing companies alike. For many venues and promoters, meanwhile, it’s a genuine existential threat to their businesses.
The Covid-19 impact on music monetisation extends beyond the live market though. The shutdown of hospitality industries, from bars and restaurants to gyms, hotels and shopping centres, will have a significant impact on musicians’ public performance royalties for this period, when those royalties are paid out later in 2020.
Some artists are also losing streaming royalties through the delay of their album releases, although others have stuck to their planned release dates even if the accompanying tour has been cancelled.
While many artists can record from their homes, social distancing rules present challenges for recording studio sessions; music video shoots; and professional mastering and mixing. That may lead to gaps in the future release schedule, and also financial hardship now for the many freelancers working in those areas, from engineers to video crews.
Industry relief efforts
The Covid impact on the music industry may seem like a bleak picture, but not a hopeless one. One of the positives in this crisis has been seeing the music industry come together for various Covid-19 relief efforts.
The US-based MusiCares Covid-19 Relief Fund raised nearly $14m by early May, with streaming services, labels, publishers, collecting societies and artists all chipping in to support industry colleagues facing hardship.
“It’s been really gratifying to see the music community pull together, really recognising that most people in the music business, whether an artist or songwriter, a session or touring musician, stage crew or road crew, most people are self-employed and don’t enjoy a safety net. It’s a tough life: they work so hard to bring music to make our lives better, and there are times when they need help,” says Steve Boom, chair of MusiCares and also VP at Amazon Music.
There are similar funds across the world, from funds created by Help Musicians and PRS Foundation in the UK, to the Centre National de la Musique in France, Initiative Musik in Germany, Musikerförbundet in Sweden and beyond.
Music companies have also been creating funds. Spotify is matching donations to its Covid-19 Relief Fund up to $10m, while Live Nation kicked its Crew Nation fund, which supports crew members in the live industry, with $5m of its own money.
Universal Music Group has a ‘UMG All Together Now Foundation‘ supporting staff, while also offering interest-free royalty advances to artists, songwriters and distributed independent labels. Sony Music’s parent company has a $100m global relief fund including support for members of the creative community, while Warner Music Group has created a central multi-million dollar fund to support Covid-19 philanthropic efforts.
Across the world, fund and initiatives have been springing up. In Tunisia, there is a support fund for professionals in the wider cultural sector (music included) as well as to help cultural spaces and festivals with costs relating to closures and cancellations. There are also funds in Algeria and Morocco, while the Follow Your Art initiative is aiming to help artists and art workers in Belgium, Tunisia and Italy.
Societies step up
Collecting societies have also been active. UK society PRS for Music’s Emergency Relief Fund raised more than £2.1m by the end of April, and made payments to more than 3,000 songwriters and composers. PPL made an advance payment of £23.9m to its members in April, brought forward from its usual June distribution, to tide musicians over.
SACEM in France distributed €140.5m of royalties and sums relating to its mutual aid program, while Spanish society SGAE added €7m to its existing €8m program of financial and social aid for members in early April. Indian collecting society IPRS has its own Emergency Relief Package, which will provide hardship payments to around 3,150 songwriters and composers.
As this map launched by European authors’ societies body GESAC shows, there are plenty of other initiatives from PROs, reflecting their key status as a pipeline of income for the songwriting community. Global societies body CISAC’s just-published annual report outlines its efforts too, including an open letter published in March encouraging governments to support creators.
“Covid-19 has had a devastating impact on the lives of the millions of creators that CISAC societies represent. It has decimated royalties for live entertainment and thrown uncertainty over creators’ incomes for many months ahead,” says CISAC’s director general Gadi Oron.
“There is no question that authors societies now have a vital to play and that they are already rising to the challenge. We have to get the sector back on its feet, help map the road to recovery and knock relentlessly on the doors of governments to get the financial and economic support creators desperately need.”
Industry bodies have also worked to coordinate their communities. The Association for Electronic Music (AFEM) has been collating resources around wellbeing, financial aid, alternative income opportunities and lobbying, for example.
“The electronic music community response to the COVID crisis has generally been one of solidarity, increased communication and innovation during an incredibly difficult time. We are seeing a wave of kindness from many companies and individuals who are in a position to help others,” says AFEM general manager Greg Marshall.
Publishing trade body ICMP has also been responding on multiple fronts: mapping out the commercial implications through to 2021; providing action plans for governments and international institutions; and exploring ways music can adapt.
“And adapt we will. It has been vital for the industry to come together on this because the hit is across the board and there is not a professional anywhere who is unaffected. That necessitates coordination and cooperation,” says ICMP director general John Phelan.
“The particular challenge for the music industry is surmounting the delayed effect. As a rights and royalties-based industry, balance sheets will really redden come the first financial quarter of 2021. That’s the crux of why we need close cooperation and to ensure the right structures are in place to adapt.”
Positivity and activism
Throughout this crisis, and the Covid impact on the music industry, it has been possible to find the positive stories from our community. The One World: Together at Home livestream concert raised nearly $128m for Covid-19 relief, as a parade of artists performed songs from their homes
Direct-to-fan platform Bandcamp held two day-long events where it waived its revenue share from sales of music and merchandise. Fans spent $4.3m on the first one, then $7.1m on the second, showing their willingness to support their favourite independent artists. Meanwhile, the charitable foundations of stars including Beyoncé, Rihanna, Madonna and Jay-Z have been making significant donations to relief efforts.
Covid-19 has also been a strong moment for activism, including grass-roots campaigns like #saveourvenues and #loverecordstores in the UK, mobilising music fans to support independent venues and record stores respectively.
There have also been impressive efforts at the industry level in terms of lobbying governments on behalf of the music community. At the end of April, for example, European body IMPALA published a 10-step ‘recovery roadmap’ for music in Europe, exhorting governments to recognise music and culture as priority sectors, and outlining the measures that they could take to help the industry come back strongly from the crisis.
“It’s important to note that the roadmap doesn’t come on its own. We set up our Task Force on March 17 and they quickly adopted a Crisis Plan at the end of March with recommendations for digital services and collecting societies as well as the EU and national governments. We also published a website to map measures in support of the independent music sector at EU, national and sector level,” says Helen Smith, executive chair at Impala.
“The Crisis Plan was about immediate and massive responses that needed to be taken at EU, national and sector level. The website is an evolving tool updated regularly, and the information is based on IMPALA’s members’ replies to an ongoing survey and some of our own research. The roadmap, lastly, is all about economic recovery. So our strategic thinking is actually made of these three components.”
This and other messages from the industry have been bearing fruit. In late March, the German federal government launched a €50bn aid package for the creative and cultural sectors, while on a smaller scale, the Australian government has provided $10m of funding to music industry charity Support Act, and the Mayor of London has created a £2.3m emergency fund to support venues and other creative businesses in the UK capital.
Cities and new models
The Covid-19 crisis is also sparking thoughts about how the music industry and wider society might be reshaped positively in the future.
Research company Sound Diplomacy has published a ‘Music Cities Resilience Handbook‘ calling for cities to make music a key part of their recovery strategies, for example.
“If we reimagine the role of music and culture in recovery, we can create a new norm – one where they are active, resilient, economic and social contributors for all of us,” suggested the report, with a rallying call for society. “We do not treat music or culture as essential. But their output as commodities is proving essential.“
That is also something reflected in the UK-based #BrokenRecord and Keep Music Alive campaigns, which both suggest that the Covid-19 pandemic is the ideal moment to rethink the dominant music streaming models we have today.
In both cases, the argument is that the live music shutdown and anticipated hit to public performance royalties has sharpened many musicians’ complaints about their streaming royalties – but also their sense that there may be ways of improving monetisation models.
From recalibrating the percentage of streaming revenues taken by digital services, labels, publishers and musicians to switching to a possibly-fairer ‘user-centric’ system of payouts (where the royalties from each streaming subscriber only go to the music they listen to), conversations about systemic change have been sparked – even if implementing them may have to wait until the crisis eases.
Video streaming booms… maybe?
In the meantime, artists are exploring opportunities to expand existing revenue stream, and even find new ones. Livestreaming is the obvious example, with artists streaming performances and fan Q&As from their homes on a variety of platforms.
Often, the monetisation is indirect. An artist streams live for free on a big platform like Instagram Live, Facebook or YouTube, then hopes for a bump in streaming royalties or merchandise revenues. British band OMD’s success in selling £75k of merch from a single YouTube stream suggests there is potential in the latter for sure.
However, other artists have been testing platforms like Twitch, with its well-established economy where fans can pay to subscribe to their favourite channels, and ‘tip’ the creators by spending money on virtual items.
While this has been built for gamers, Twitch is building its music team, and is working with SoundCloud and Bandsintown to fast-track musicians to its ‘Affiliate’ tier – which is what they need to start monetising their Twitch livestreaming.
(The tips economy may be coming to audio streaming services too. Spotify’s new ‘Artist Fundraising Pick‘ enables artists to place a link on their profiles for fans to donate directly – the first time such a feature has been allowed on a major streaming service. More than 50,000 artists are already using it, albeit with mixed feedback so far.)
Elsewhere, startups like StageIt, Maestro, Crowdcast, Release Party and Cadenza are trying to help artists sell ticketed livestreams, while membership platforms like Patreon and GigRev are helping artists to build deeper (but also paid) relationships with their superfans. Industry journalist Cherie Hu recently compiled a directory of these and other services, which has been widely shared and praised – indicating the interest artists have in exploring livestreams.
“While live events are on pause, the time is right to focus on improving processes in the area of live streaming revenue generation and the accuracy of the related royalties for performing artists, creators and rightsholders of the music played,” says AFEM’s Marshall.
Mapping the Covid-19 effect
There is plenty more innovation to come, and that will be one of the major topics at the Midem Digital Edition in June, which is aiming to bring the global music community together to discuss not just how to survive Covid-19, but how to thrive in the post-Covid era.
As part of this, Midem will be publishing some unique research mapping the impacts of the crisis, which will be presented on the first day of the online conference as part of a panel on the industry’s response to Covid-19.
The mapping will make clear the interconnectedness of the industry, and show how the pandemic has affected the flow of revenue between companies in the live, publishing, recording and distribution (including streaming services) sectors, as well as to musicians.