Whether you voted to leave or remain, this week is the start of Brexit talks which is going to be pivotal in shaping the future of the UK.
We know there are more important things to address but, here at Songmaker, we love music . Without trying to start an argument around the dinner table on whether it was the right or wrong decision to leave, we want to address Brexit for one main reason: how will it affect the UK music industry?
British music is one of the strongest exports the UK has to offer. Last year British artists were responsible for over 17% of album sales in major European countries such as Sweden, France, Italy and Germany. Physical sales which produce higher royalties for artists and labels tend to be more popular in Europe and so by leaving the EU, artists and their record labels will suffer. By leaving the EU and losing the privilege of free trade throughout Europe, this could see the return of taxes and tariffs meaning record labels will have to charge more in order to distribute music throughout Europe. Artists will also receive less royalties as a result due to the increased cost of distribution. Physical album sales for British musicians could also drop due to restricted access to European markets. Consumers will also be affected as the U.K will most likely to have pay import taxes for music albums and records entering the U.K and this difference will trickle down to the consumers who will have to pay more for music from abroad.
The European Commission is currently reviewing copyright legislation, including what is known as safe harbor provisions, as part of its Digital Single Market strategy . The strategy is aimed at opening up new digital opportunities for people and business and increasing Europe’s position as a world leader in the digital economy. The current state of the E.U.’s digital landscape is somewhat disjointed as there are twenty-eight separate digital markets, one for each member country.
Recently, 58 of the European Parliament have signed a letter to the European Commission urging them to give more consideration to fair artist payments in Digital Single Market legislation, making it harder for Internet Service Providers to claim ignorance of piracy. The U.K. stood to benefit from these regulations but now this now seems lost. In fact, Brexit may well weaken the negotiating power of British independent artist in regards to both domestic and international copyright reform. If the Digital Single Market strategy is not actively backed by the British government there is a real possibility that a different and less punitive set of copyright measure will replace the initiative, with local UK artists losing even more. Moreover, with U.K’s departure, Brexit would seem to undermine artists’ collective bargaining advantage in Brussels.
In the 21st century, the way consumers access music has seen a momentous shift from physical formats to streaming and downloads. Even there, Brexit is likely to have consequences in the digital music world.
With the rapid devaluation of the pound occurring in the wake of last June’s referendum, leading music download services such as Apple have increased the price of its apps this year in a move widely attributed to Brexit. Apple Music streaming subscriptions and Spotify subscriptions could follow suit if the pound continues to fall any further. This is due to the fact that Spotify and Apple Music are all multinational firms whose pricing policies differ in each country.
In other ways, however, Brexit will have no effect at all. Many business leaders have called for the UK to preserve its access to the European single market, but in digital terms, things are a bit more tricky.While the markets for goods are covered by the single market in Europe, the market for services is still a work in progress.
When it comes to the distribution of digital products, including music and e-books, consumers will still find that borders get in the way. That being said, streaming services are more unified. Spotify, for instance, makes practically all its catalogue accessible everywhere in the world, with some minor variations in local-language music.
Before the leave vote, British artists could tour and perform freely throughout major markets in Europe. With Brexit, it is increasingly likely that artists will need to acquire separate working visas for each country in the E.U and the cost of flights and transport to and from these European countries will also likely to see an increase. The extra cost and administration involved for procuring visas and transport to tour Europe will lead to artists having to scale back European tours and missing out on generating income from the tours which are a great source of revenue for artists. This will also apply to European acts wishing to tour the U.K which means we will likely see less international acts visit our shores.
Another issue that might have an impact on European touring into Great Britain, is the reintroduction of ‘carnets’ which are documents that details every single piece of equipment on deck and are required to move equipment across borders so the customs authority at the border could keep track. Gear has to be declared, imports identified for tax purposes, and domestic goods checked for payment of the Value-Added Tax. The additional costs of carnets will add extra financial strain on artists looking to tour to and from other European countries.
British music festivals
Brexit is not all doom and gloom for the UK music industry. Due to the potential increase in cost for obtaining tourist visas and flight costs for consumers as a result of Brexit, many Brit music fans will be more inclined to stay in the country and attend UK music festivals rather than travel abroad for European music festivals. This will help to increase attendance numbers for UK festivals such as Glastonbury and Wireless festival.
Until the Brexit negotiations are finalised , we can only assess the potential impact it will have on our music industry. 2017 so far has been a whirlwind of negative events from multiple terror attacks to The Grenfell tower fire. Every week we feel less in control of our futures. However throughout history music has had the power to unite people in the face of adversity and as long as we have music, we have the strength and power to make our opinions heard no matter what hardships we may face.