Tuning Brexit: The Departure’s Reverb on the UK Music Industry
By: Adiana Delavega
Introduction
It was the summer of 2016, and Britain was shouldering heat featured by a quickly changing climate and a bewildering range of predictions bouncing about the news following David Cameron’s Brexit referendum introduction. Dueling economists speculated the very daunting and very possible ramifications that could befall Britain, with grave concerns that the economy could be headed for immediate devastation. Over two and a half odd years and one exacerbating prime minister later, the island nation finds itself with a delayed divorce date, and the reality of the preceding economic effects have proven to be less than the promised instant sensation and more of a slow bureaucratic burn.
At the close of 2018, Britain reported its lowest growth rate since the global financial crisis. If the Brexit deadline this spring had been met without a deal—rather than a delay of six months—the Bank of England warned that the economy could shrivel by as much as 8% in coming months, and property values could collapse by more than a third.
Revenues carried through the European Union are a critical element of businesses in the United Kingdom mainly because the block of nations is by far Britain’s biggest trading partner. The swell of pending anxieties for the future has unraveled the nation’s economy with no exception of the music industry, which contributes an annual ￡4.5 billion to the country’s overall economy. Of course, the hardships and headaches induced by a Brexit including withholding taxes on royalties, travel restrictions, tariff costs, and carnet fees will disproportionately effect unestablished artists who make up the majority of their industry’s talent with 90% of musicians being self-employed. In the subsequent sections of this paper, the facets of the UK music industry impacted by an approaching Brexit are expanded.
Sales
Currently, British workers do not have to pay the value-added tax or customs duty on imports or exports within the EU, but a Brexit could soon reapply these responsibilities, meaning that artists transporting goods could be facing heavy taxes very soon. Britain has long been a prominent net exporter of music, and although the United States engulfs the market demand for British music at 35%, a region of Europe accounts for 42% of sales, with a dramatic spike of 29% just since 2016. According to Paul Pacifico, CEO of the Association of Independent Music, commercial partners and local acts could be facing significant disadvantages in terms of securing opportunities. “Anything that reduces access to international markets is not in the best interests of UK music and particularly the dynamic and creative independent sector which is responsible for so much of the most creative output… Our CDs and vinyl are generally manufactured in continental Europe, and so we’re concerned about potential delays, the costs those delays can bring, and the impact on selling physical products in the UK.” Physical products will not be the only subject of concern raised to artists when it comes to bearing new taxes. Soon, acts could be required to register for value-added taxes in every EU country.
Intellectual Property & Digital Streaming
Pacifico urges the UK government to be responsible for ensuring that intellectual property protections in trade negotiations are not relaxed. The recent reforms proposed by the EU—many of which were submitted by the UK—to the Digital Single Market are meant to supplement tech businesses and stimulate the market while protecting creative output utilized on platforms via the EU Copyright Directive. The new measure proposed by Article 13 (now article 17) enforces the copyright holder’s right to be paid for their intellectual property and imposes stiff penalties against infringement on digital platforms like YouTube and Facebook, requiring the sites to carefully monitor and take action when copyrighted content is used wrongfully. Should the UK government not adequately consider the needs of their creative industries to the extent that their neighborhood has decided as they pursue independence, the music market will suffer a tremendous disadvantage.
Working Visas & Touring
In the spirit of such neighborliness, British acts do not currently require a working visa to perform in an EU country. Emerging artist Ady Suleiman fondly acknowledges the exposure ease of travel within the EU has brought to his career: “We just did 14 different dates in 14 different cities. It’s been so easy to get to the shows, we just get in the van and drive… But if that became more expensive and you had to get things like visas I’d start making quite a big loss.”
A 2018 survey conducted by the Incorporated Society of Musicians (ISM), the UK’s recognized professional body for musicians, showed that more than a third of musicians receive half or more than half of their income by working in the EU. 41% of respondents spend 30 days or more working in the EU, and 39% have traveled to the EU more than five times a year with 12% reporting that they ventured more than twenty times a year. Of those surveyed, 54% had worked outside the EU, and of those reporting difficulties doing so, 79% pointed to visas as the cause. When touring the UK, non-EU musicians require a Standard Visitor Visa at £93 per person, although the process has a reputation for baseless refusals. For individual performances, non-EU performers need a permit for paid engagement, which in reality is only attainable by acts with proof of an international presence. These regulations will not be an issue for the likes of Ed Sheeran and Dua Lipa, whose operations will not be stifled by visa costs and carnet fees. To avoid the implementation of the tour carnet for a hefty cost of around £1000 to £2000 plus a deposit, the Musicians Union is preemptively urging the government to grant touring visas, which would allow acts to transport equipment temporarily outside of the country. The issue with this strategy is that job opportunities can be presented on short-notice, with 15% of respondents from ISM’s survey reporting that they had taken a job within the last year that had been offered less than seven days beforehand. In his fervent letter to Brexit’s surrogate, Theresa May, UK Music CEO Michael Dugher reaffirms that those who will be most unfairly impacted by Brexit in his industry will be smaller acts who rely on touring and playing at festivals within the continent to make a living:
“The ending of free movement with no waiver for musicians will put our fast-growing live music sector, that generates around £1 billion a year for the UK economy, at serious risk. The costly bureaucracy will make touring simply unviable for very many artists who need to earn a living, and it delivers a hammer blow to the development of future, world-leading British talent… UK musicians need to be able to move swiftly, often at very short notice, across Europe to take up offers of work, while overseas musicians need similar freedoms to come to play in our world-renowned recording studios, grassroots music venues or festival circuit.”
In short, acts can only tour if venues are willing to make a deal. With inevitably higher ticket prices spurred by higher costs to the artist and emerging musical acts from the likes of Berlin that can cooperate with the standards of the EU, it is evident that these key job opportunities for British acts will be drastically diminished and the longstanding cultural relevance of their music scene will wane.
Festivals
Performers are not the only industry figures that will be directly impacted following the UK’s departure from the EU. As argued by the Confederation of British Industry, if the UK were to maintain its immigration system following Brexit, a Tier 2 Work Visa, which has been accessible to self-employed Europeans up to this point, will require a minimum income of at least £30,000, dealing a massive blow to low-skilled low-earning workers. A recent Migration Advisory Committee report commissioned by the Home Office indicated that the work visa system should not be extended to these single market workers, who overwhelmingly fill roles like security, bar staff, and stagehands that make festivals like Glastonbury possible. The anti-immigration sentiments that partially inspired Brexit supporters have already caused substantial damage to similar festivals like WOMAD, which features music from around the world. Chris Smith, the festival’s organizer, has been vocal about the ramifications he has already seen due to the anticipation of Brexit, criticizing the Home Office for visa restrictions that have already determined that three WOMAD confirmed acts will be denied entry to the UK. Smith resentfully explains that many artists have “given up” due to the extensive and “humiliating” process of entry, making it challenging to attract international acts and frustrating returning partners to the extent of dropping out altogether. Brexit supporters may be inclined to turn up their noses at the gravity of jeopardizing festivals, but to dismiss the vitality of these events is foolish considering that UK festivals ring in roughly £4 billion annually for the economy since 2016. In addition to the prospect of losing single market workers and ticket price hikes making ticket sales volatile, the 823,000 Europeans that traveled to the UK last year for music-related events should be turned off by the array of new complications including an end to open skies regulations that have previously allowed travelers to enjoy cheaper and more regular routes to destinations in the EU.
Artists Taking Action
As music workers continue to mount their concerns for the future of their industry, with over 40% of ISM’s respondents having already battled negative impacts on their careers since the initial referendum, the consensus among professionals is reflected in a vehement letter to the members of parliament drafted by Music4Eu. The thousands of signatories- including major acts like Annie Lennox and Pink Floyd frontman Nick Mason- represent artists, managers, producers, and platforms from across the Music Industry in the UK calling for an alternative to Brexit. The letter specifies as discussed in this paper, “that leaving the EU’s customs union, single market, VAT area and regulatory framework (in whole or part) could devastate our global market leadership, and damage our freedom to trade, tour and to promote our artists and our works… there is a clear risk that reaching consumers and fans will be more expensive, and international markets will be harder to access. Live events will run the danger of being delayed or even canceled, which would undermine the financial and cultural benefits that this vibrant sector brings to UK PLC.”
Conclusion
The economic consequences of Brexit are indisputable and alarming, and the cultural costs for home-grown talent and for art enthusiasts across the world are frankly incalculable. The UK music scene accounts for a quarter of the music market in Europe and to strip it of its access to diverse talent means thwarted innovation and stunted creativity. The endless potential Britain has realized by absorbing cultural influences from around the world to create a better society is insulted by the rise of nationalism, characterizing the regressive headaches that accommodate urbanization in eerily reflective human nature.
Endnotes:
1. Pan Pylas. “Brexit Takes Heavy Toll On UK Economy: Office For National Statistics.” Insurance Journal, 02/12/2019. https://www.insurancejournal.com/news/international/2019/02/12/517409.htm
2. Roisin O’Connor. “UK Music Industry Worth A Record ￡4.5bn in 2017.” Independent.UK, 10/31/2018.
3. Free Move Create, Musicians and Brexit, Third Report. ISM. 07/2018.
https://www.ism.org/images/images/ISM_Brexit-Report_A4_July-2018_online.pdf
4. Ben Beaumont-Thomas & Mark Sweney. “Record £400m UK music sales abroad, but Brexit ‘may hit income”. The Guardian, 09/05/2018.
5. Daniel Sanchez. “British Label Group Issues a Depressing Warning on Brexit — Especially for Indies.” Digital Music News, 07/20/2018.
https://www.digitalmusicnews.com/2018/07/20/beggars-group-brexit-warning /
6. Jimmy Blake & Jim Connolly. “Brexit and music: How leaving the EU could change gigs for artists and fans”. BBC News, 04/27/2018.
https://www.bbc.com/news/newsbeat-43867724
7. “UK Music Warns Brexit Could Put Fast-Growing Live Music Sector At Risk”. UK Music, 11/26/2018.
https://www.ukmusic.org/news/uk-music-warns-brexit-could-put-fast-growing-live-music-sector-at-risk
8. Roisin O’Connor. “More people are going to see live gigs and festivals than ever before, UK Music study finds”. Independent.UK, 07/11/2017. https://www.independent.co.uk/arts-entertainment/music/news/live-music-gigs-festivals-attendance-uk-economy-local-venues-glastonbury-reading-leeds-brexit-a7835301.html
