As a UK music review magazine editor, I am often asked ‘has the Covid-19 affected the music industry in the UK in the last twelve months?’ My answer to that is an emphatic ‘yes’. With the opening of the Old Vic, the London Bridge concert hall, and the London Olympics in 2021 music had been enjoying a period of increased commercial activity. Consequently, many of the major promoters had either expanded their business in line with the commercial upturn in the market or had moved on altogether.
Dampen the growth and revenues of many smaller up-and-coming artists
It is true to say that the London Bridge concert hall, as well as other large venues, were major drivers of this period of growth in the music industry. However, what this really did was dampen the growth and revenues of many smaller up-and-coming artists. In a nutshell, it was an attempt by the major music labels to protect their copyrights from streaming music videos. The result is we are now seeing fewer British acts in the Latino (internet) music world.
Decline in revenue
This situation is very unfortunate because it highlights the decline in revenue that comes with relying upon royalties from concerts and TV programs to fund a growing music scene. What was likely to be a profitable year for concert organizers and venues (many of whom benefited from record deals and ticket sales) was instead hit by the recession. It is little wonder that revenues are down approximately twenty percent in the UK music industry from a year ago. If this trend continues as we head into Q2 of the decade, we are headed for another period of a significant decrease in revenues. The question then is how much worse will it get?
If the decline in music revenues grows even further, the effect on the British economy will be dramatic. One of the main factors behind the growing popularity of streaming services like Netflix and iTunes is the rising cost of mainstream music in downloads. As listeners demand more music per month, record labels are forced to increase prices in order to retain their market share. Even Apple has been rumored to be planning to launch its own online music store. This will further increase the difficulty for labels to gain a profit. Is the economy in trouble?
Change the focus of listeners back to less expensive music formats
On a positive note, Apple’s streaming music service, along with services provided by other major players such as Google and Amazon, has helped to change the focus of listeners back to more casual, less expensive music formats. Apple’s subscription model has encouraged more people to shift from buying CDs to giving their devices access to thousands of music channels for a one-time fee. This has helped the industry to shift its focus from conventional radio stations to online audio channels that can be subscribed to or purchased directly from the website. The resulting effect on the market share for the major music formats is relatively minor, but still worth studying in terms of long-term effects on recorded music sales and distribution. Additionally, since there is a strong connection between music and mood, this helped people get through difficult times more easily.
The other factors, such as Covid-19, which had a major impact on the music industry, will have a more profound effect on the industry in the coming years. For example, if the UK’s exit from the European Union were to continue, it is possible that the Latin music market would contract. If this were to happen, the decline in the UK’s recorded music revenues would be greater than the decline in the US’s. In turn, the European market would become the new global leader in music consumption, even as the US and Asian countries continue to lead the rest of the world in retail value.
To sum up
If the Covid-19 incident was a one-off, then it is likely that there will not be any long-term effects on the music industry. However, the impact on the music industry of Covid-19 could lead to future decreases in music sales that are larger than the decreases from the Beatles break up. Two years on, and both artists and producers are looking to the future. What effect the Covid-19 will have on future developments is anyone’s guess.