June 29, 2016  

Brexit: What Does It Mean For the Music Industry?

Well, it happened. Last Friday, the country woke up to the news that almost 52% of Britons had voted to leave the European Union, an outcome that was both unprecedented and largely unexpected. While the first shockwaves were felt quickly – the pound immediately bottomed out to a 31-year low, the Prime Minister resigned, the opposition party was thrown into chaos –  it’s still too early to predict what the following weeks, months and years have in store. What is certain is that all areas of society, culture and industry will be affected by the seismic event, and the music industry – an area of the British economy that is currently booming – is certainly no exception.

At this point it’s worth restating that Point Blank has a profoundly international outlook. We have helped students from all over the world conquer the global music industry – something we will continue to do regardless of the United Kingdom’s EU status. Rest assured that whatever the future holds, Point Blank will continue to welcome passionate music students from ALL countries and nations on the planet, just as we always have, and just as we always will. But in the interests of being informed, we’ve chewed over the reams of close analysis, considered speculation and knee-jerk reactions to gauge how this historical vote will affect new artists and future industry players in the years to come.

Independent artist? Brace yourself.

Companies of all sizes will be affected by the UK divorcing itself from the EU, but smaller companies – such as independent labels and creative start-ups – will be at the greatest risk. According to this quick take by Midia Research, the additional administrative burden – and potential trading levies – that come with a break from the single market could seriously inhibit trading in Europe. Your favourite label simply doesn’t have the financial buffer to soak up these additional costs: take pressing to vinyl, a topic covered in depth by this Vinyl Factory piece. With so many pressing plants based in Central and Eastern Europe, the already expensive process will become increasingly untenable when combined with additional bureaucracy. Could this spell the end of the vinyl resurgence? With these costs passed onto the consumer, it might do.

But say you’re not interested in pressing your music to vinyl. Digital downloads – currently a huge growth area – aren’t immune either. This piece in The Huffington Post points out that British artists currently selling downloads don’t have to register for VAT in every EU country. The question is, for how much longer? But don’t lose hope: Bobby Owsinski at Forbes Magazine puts a somewhat more positive complexion on Brexit, at least in terms of how adaptive the music industry has proved in the past. He also posits the idea that streaming could pick up the slack if ticket sales drop.

What about touring?

This is the big one and one that will almost certainly apply to many, many of Point Blank’s students, either now or at some point down the line. If you’re a British artist, band or DJ, the freedom of movement that makes it possible to jump in a van and travel around Europe to promote your music on a shoestring will be gone. But there’s more to think about than the additional travel costings. Keith McIvor, aka JD Twitch, highlights how the increased admin would affect him, a touring DJ, in the aforementioned Vinyl Factory piece: “Most of my DJ gigs are in mainland Europe and I may have to have work visas for every European country I play in. Last year I played in 17 European countries so the potential cost and time of getting all those visas will be a major headache and perhaps discourage European promoters from booking me and likewise preclude me bringing European artists here to play.”

Indeed, a promoter may well be put off booking a British artist if they have to put up the money for visa sponsorship. Then there’s the additional time and bureaucracy artists will have to navigate in crossing borders – and artists may have to produce a carnet, a customs document listing every item of equipment to enable tax free importation. When you’re on a tight schedule, such longwinded processes could prove inconvenient at best.

Album stats-1

Additionally, let’s not forget that, in the six largest European markets after the UK, British artists accounted for over 17 percent of album sales. While expensive visas, soaring travel costs and the increase in red tape will be soaked up by major labels eager to protect this lucrative market share, smaller artists with tight touring budgets – ie. any artist when they’re trying to break through – will suddenly find themselves cut off from the world’s biggest market.

Cultural tourism may take a hit

And it works the other way around, too. The UK has a long tradition of being a world leader when it comes to culture. Music fans from all over the world travel here to witness first hand iconic cultural events like Glastonbury. Paul Reed, general manager of the Association Of Independent Festivals, told Music Week that Brexit has put a question mark over this cultural tourism: “The festival market has developed as a truly European market and that is a great strength,” says Paul Reed, general manager of the Association Of Independent Festivals, “Especially when you consider the incredible festivals that have emerged aimed at Europe-wide audiences.” Now that Britain is set to leave the EU, he believes music tourism will drop.

What happens now…

It’s worth noting that Andy Heath, chairman of campaign group UK Music, which lobbies for the British music industry, told IQ Magazine that the outlook wasn’t all negative: “British music is strong and successful and will remain an essential part of a rich and diverse European culture. We should not be scared by change; we should see it as a positive opportunity. We are an export-led business and consumers around the world want our music, artists and products, and this will not change after [Thursday’s] decision. UK Music will continue to protect and promote our members, creators and businesses to ensure they are best represented to continue achieving this global success.”

Finally, it’s also important to remember that the UK’s relationship with the EU will not alter overnight, and current and prospective Point Blank students considering our London courses should be reassured that it will be at least two years of negotiations before any change will be tangible (forty years of EU legislation will take a while to untangle). There’s even a reason to believe that it may not happen at all. Importantly, the UK and particularly London, has long been renowned and respected as a hub for music long before it joined the European Economic Community, the precursor to the EU. Now it’s up to a new generation of artists, DJs and musicians to get out there and creating art that confronts this new political reality. Music, a powerful force for unity, needs to bring people together more than ever.

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