Wrinkly rockers prosper from music boom
Heritage acts hear cash tills
Oldies or "heritage acts" are benefiting the most from the rise in demand for music, with the gap between the established and other acts getting wider, according to the annual music industry economic survey. But the wrinkly rockers, tempted out of retirement for another pay day, are snatching money that used to go on mid-level or new artists - disproving that the "Long Tail" idea would ever apply to music.
The survey, published by the PRS, confirms that music is a net earner for Britain, which gains more income from its home grown music than it pays out to listen to overseas acts. Only the USA and Sweden have a similar positive balance sheet.
It also shows live overtaking recorded music for the first time in the UK. Total revenue for music was estimated to be £3.6bn for 2008. Recordings returned £1.309bn, down six per cent, while live income rose 13 per cent to £1.391bn.
The rest of the £3.6bn, mostly licensing, is treated as B2B (business to business income) - of which the largest slice was performance revenues returned to songwriters and composers from the PRS. After adjustments, this was reckoned to be £491m, while other licensing made up the remainder.
Licensing by record companies (to companies like Spotify) rose by seven per cent last year to £195m. The digital recordings market, with Amazon and We7 now offering keen competition to Apple's iTunes, is estimated at £212m at retail, a growth of 51 per cent.
For live revenue, primary ticketing grew to £905m, secondary ticketing (eg buying it on eBay) to £149m and ancilliaries such as merchandise £338m. Remember these are revenues returned to the business - with live music, almost everyone else (such as lager companies) takes a much larger chunk of money on your night out.
But the spending on concerts and festivals is disproportionately benefiting the old timers.
"There is a real concern with demand for the ‘mid-priced’ touring acts," writes PRS economist Will Page. "This growing inequality between heritage acts and the rest of the pack mirrors a separate trend identified in digital music, where more choice led to a widening gap between the hits and niches."
So online and physical music sales did well in the teeth of a recession and the closure of top high street retailers. What about new income from advertising and marketing to help new artists?
Don't hold your breath. Brand sponsorship and advertising snagged just £89m of the £3.4bn last year - going disproportionately to the old farts - while sync income from movies and adverts actually fell, to £20.7m. It doesn't auger well for the future, Page notes:
"Recorded is down and live is up – but it’s recorded music which makes the primary investment in new talent, and given the damage already done to investment calculations by P2P, therein lies a ‘conveyor belt’ style question: who’s going to invest in the career development of artists to create the heritage acts of tomorrow?"
You can peruse the numbers here. ®