UK music industry turns up the global volume

If 2015 proves as good as 2014, it will have been another fantastic year for the British music industry overseas. According to the BPI trade body, UK acts accounted for more than one in seven albums sold worldwide in 2014, with five of the top 10 best-selling albums recorded by UK artists (Ed Sheeran, Coldplay, Sam Smith, One Direction and Pink Floyd).

British music’s market share in the US rose to 12.2% (up from 10.4 % in 2013), while also increasing in Canada (15.3%) Australia (22.4%), Italy (19.8%) and Sweden (14%).

Significant contribution

“The British music industry contributed £4.1bn to the UK economy in 2014 and overall the market grew by 5%, outpacing the British economy, which grew by 2.6%,” reveals Phil Patterson, music sector specialist at UK Trade & Investment (UKTI).

“Revenues by musicians, composers and lyricists rose 11% to £1.9bn and live music sales jumped 17% to £924m. While these figures include domestic income, the UK music industry is making a significant contribution to the UK economy from overseas sales, too.”

Patterson has more than 30 years’ music industry experience, most of which has been spent working with major and independent record companies to develop and market artists and catalogues in the UK and overseas.

“With streaming and downloads growing, income from physical record sales [ie CDs and vinyl] is generally down. As a result, many artists are looking to other revenue streams, such as live shows and synchronisation, which means licensing music for use in movies, TV, games or adverts,” he explains.

Export scheme

In September 2013, the UKTI-funded BPI Music Exports Growth Scheme (MEGS) was launched. According to the BPI, it is “designed to make available grants ranging from £5,000–£50,000 to UK-registered independent music companies to assist them with marketing campaigns when looking to introduce successful UK music projects overseas.”

MEGS has recently made available a further £200,000 to UK-based independent music companies. According to UKTI: “Thirteen UK music companies together with three songwriters are to receive significant funding to boost their overseas touring and songwriting collaborations. Among those selected are the management company behind Catfish and the Bottlemen, 2014 winner of the BBC Introducing Award.”

As Patterson explains, such support continues to open the door overseas for up-and-coming UK artists. For example, Llandudno four-piece indie rockers Catfish and the Bottlemen played at the New York Governors Ball and Bonnaroo Festival in Tennessee in 2015. London-based progressive instrumentalist duo Public Service Broadcasting toured with the Manic Street Preachers and blues rockers The Temperance Movement supported The Rolling Stones, while acid punk band Bo Ningen toured with Kasabian and supported Black Sabbath.

Various up-and-coming UK artists have performed at international festivals including Hellfest (France), Nova Rock (Austria), CMJ (New York), Fuji Rocks (Japan) and Wacken Open Air (Germany). UK songwriters are also in great demand, Patterson says, which is why UKTI has staged events for music publishers and songwriters in Nashville and London.

Niche market

“The shift from physical to digital has opened up the world market to smaller independents like us,” says Trevor McNamee of Brighton-based Jalapeno Records, which incorporates music publishing and management, as well as selling recordings.

“We operate in the soul, funk and electronic niche, which only occasionally breaks into the UK mainstream, so UK sales wouldn’t sustain the label. But once you tap into this niche in other countries, you have a viable business. Territories such as France, Holland, Germany and the US can provide good returns if the band tours and promotes their records.”

Although Jalapeno sells CDs and vinyl in major territories, it is also sustained by streaming and download income from the UK and overseas, as well as revenue from radio play performance rights, synchronisation, compilations and publishing.

Key recent label successes include Newcastle band Smoove & Turrell (“who’ve scored heavily in the US sync market”) and ephemerals (“they’ve recently completed an album-release-promo tour of Europe”).

World market

“At least half of our income now comes from overseas sales,” McNamee continues. “We use a UK company to distribute physical and digital product and we spend money on local promotion in key territories. We make good revenue by selling to music lovers who don’t want what’s on Top 40 radio, because we’re tapping into a world market, not a local one.

“The costs of promoting niche artists to relevant ‘tastemakers’ in overseas territories is often zero, you just send them an email. And we can hire the same promo people that a local company would, but retain all our rights. This means fewer people are taking a cut before money gets to the artists. It also means that from our earnings we can advance bands enough to get their music recorded properly and help them with touring costs.”

So, what key lessons has McNamee learned about selling overseas? “You need local knowledge, but it’s entirely possible to put together a promo and distribution plan and control it from the UK. For a niche record, you can do a thorough job overseas for very low cost. It’s never been a better time to be an indie label.”

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