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In The Loop Accounts is an independent accounting service with a wealth of experience in all areas of the Music Industry. 

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In the loop Accounts

How has Covid affected the industry?

In something of a three-pronged attack, the pandemic has affected the music industry in every area; live music, streaming and PRS earnings.

The seemingly never-ending lockdowns in the UK and across the world have all but devastated the live music industry. According to the World Economic Forum, “The global music industry is worth over $50 billion, with two major income streams. The first, live music, makes up over 50% of total revenues and is derived mainly from sales of tickets to live performances…a six-month shutdown is estimated to cost the industry more than $10bn.” 

An article from The Guardian also points out the less obvious sufferers in the industry; the fantastic teams behind all the glitz and glamour of the headline act: “The collapse of the live industry affected not only artists but the thousands of people who work alongside them, from road crew and sound engineers to security guards and haulage companies.”

It’s easy to forget the multi-faceted impacts on PRS earnings too. The Guardian article goes on to remind us that “the money artists gain from being played in licensed venues such as pubs, restaurants and shops” was also stripped away- leaving many in dire financial situations with little support from Government schemes.

Most thought that at least streaming would see a boost as people were stuck at home, bored and jumping on the kitchen rave bandwagon… unfortunately it wasn’t meant to be. The Guardian article glumly points out that “In April, a good six weeks into global lockdown orders, it was reported that Spotify streams of the world’s biggest hits were actually down 11%…it wasn’t just concert halls that had been shuttered, it was the bars and venues that would normally be playing recorded music; plus there was a lack of bored commuters standing glumly on trains listening to a playlist titled My Boss Is a Jerk.”

The World Economic Forum holds a slightly more optimistic view, believing that “The crisis is likely to accelerate underlying trends in the music industry, based on the importance of streaming, which has grown from 9% to 47% of total industry revenues in just six years.” They also go on to highlight some of the new ideas being put to the test with a great reception from fans: “The industry is fighting back with new ways to monetize music consumption and innovative models: Fortnite hosted a live rap concert that attracted nearly 30 million live viewers.”

The Musicians Union are optimistic for the future of live-streamed concerts following their research conducted with Middlesex University and the Economic and Social Research Council which found that “90% of musicians and 92% of fans agreed live streaming concerts will in future be a successful tool to reach audiences unable or unwilling to go to physical venues. Over two-thirds of those surveyed agreed live streaming shows will remain an important part of the landscape after the pandemic.”

Another surprising upturn has been the encouraging increase in sales for vinyl; “despite the fact that physical music stores in the UK were closed from March through to June, and again in November, sales of vinyl continued to rise, with a massive 2.7m records sold on the format in the UK.” according to The Guardian.

With venues able to open their doors once more, we have everything crossed that the industry will be bouncing back to its pre-pandemic levels in 2021. We’re proud to be here to support all our wonderful clients as you find your feet once again.

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