The story that dominated our last eNews was that the international music industry was standing on the brink. Taking a mid-term view, little appears to have changed.
By the end of April, Australian artists had lost over $340M in live revenue since the Govt-issued lockdown was put into place (according to I Lost My Gig). There have been significant and welcome interventions from the federal government and most state governments, with the federal arts minister Paul Fletcher arguing that $4 to $10 billion will be invested into the arts and cultural sector through JobSeeker and JobKeeper, depending on how long the intervention lasts.
Despite this support, two issues have focused industry attention. The first is identifying and campaigning for a large number of music industry workers who fell through the cracks. The $10 million in federal funding provided to Support Act is part of addressing this problem. The second and latest preoccupation is the (12 month?) gap between the 6 month federal support program ending and ongoing support that would be required until a vaccine becomes available. Australia’s Chief Medical Officer has indicated music festivals may be off until 2022. For venues, social distancing at a concert would reduce capacity by 80-90%, which is not viable unless prices rise stratospherically. So, taking a mid term view, not a whole lot has changed since our last edition, and the music industry looks like being ‘First In, Last Out’ – ‘FILO’ – an acronym that ARIA has started to use.
These issues are arising in other large music markets. In the USA, leading US music organisations wrote to Congress on May 8, explaining how the CARES Act economic stimulus bill falls short of the industry’s needs. The Recording Industry Association of America (RIAA), Music Artists Coalition (MAC) and Songwriters of North America (SONA) wrote that “Musicians are struggling to access the basic financial resources available due to conflicting and burdensome requirements in relief programs. Simply, there is a hole in this safety net that Congress must fix in the next version of the CARES Act.” MusiCares, the US equivalent of Support Act, launched their COVID-19 Relief Fund in March, and by early May had raised and allocated USD$14 million dollars, needing to suspend applications. Based on this case study, the $10 million that Support Act received won’t last forever. The German industry was initially praised as a standout for its multi-billion support of the music and creative industries, but there are renewed calls within Germany for more support (close to another billion Australian dollars for the music industry) as the time horizon shifts to what happens until a vaccine is available. The only Australian push for a bailout package at this level was Live Performance Australia’s $650 million push to the federal government which didn’t get up.
There are a number of implications of the pandemic that the international music industry is wrestling with:
- A constantly moving and uncertain environment for decision making: There is no clarity on how long government and other support will be required, but it will be for a much longer period than most industries. There is uncertainty over how funding will be wound back or extended. There is uncertainty over whether an increase in infections or a second wave or a delay in developing a vaccine will see timelines extend out even further. The live music industry also needs a timeframe to set up events, and so even if the all clear was given, it would take considerably longer to set things back up;
- Social distancing would mean venues could only operate at 10-25% of capacity: Imposing the four square metres per person rule being applied to hospitality would make it unviable to operate venues unless prices were increased stratospherically. There would also be an increase in costs associated with temperature checking, logistical modifications and cleaning protocols;
- Audience sentiment is also working against the industry: as some surveys indicate between 40 to 90 percent of audience members would not attend a concert/festival in the current environment (43% in a triple j survey, and 90% in one US survey);
- Skill re-deployment eg road crews with experience in event staging and production are looking at how their skillsets can be deployed in other workplace contexts, such as building temporary facilities and things of this nature;
- The amount artists receive from streaming revenue coming under pressure: For artists, the transition from the CD world to the streaming world saw the proportion of income artists receive from recordings decline. Live performance is the lifeblood of artist income and has largely fallen to zero. Music managers and organisations which represent artists are beginning to argue that income splits that prevent artists from properly diversifying income should be fought, and artists need to renegotiate to receive a greater proportion of streaming revenue. Spotify must have sensed it would come under pressure and established its international COVID-19 Music Relief project, which is partnering with organisations like Support Act, MusiCares in the USA and Help Musicians UK. It will match donations made via the Spotify COVID-19 Music Relief page dollar-for-dollar up to a total Spotify contribution of USD$10 million. This is welcome support, but unlikely to make these calls go away.
What can we do? Things that will benefit the local industry are paying for online music content, buying direct from Australian artist websites, supporting Australian content quotas for radio, supporting the extension of federal government programs beyond September, supporting the inclusion of casual workers who have fallen through the cracks, and supporting tax breaks and offsets for music industry investment.