At the start of 2013, UK guitar band The Vaccines were preparing themselves for their biggest tour to date, culminating in a headline performance the 20,000 capacity O2 arena on May 2nd. It is therefore, hard to imagine that the band kicked off the year with an intimate show at the Southampton Joiners on January 22nd, as a show of support to a struggling live music venue [NME, 2013]. Like many other venues in the UK, Southampton Joiners poor situation at the time was partly due to the Licensing act of 2003. The act placed many restrictions on the performance of live music and other entertainment, and so inadvertently caused lots of venues throughout the country to close. This, along with the combined effect of further legislation, and the growing monopoly in the live sector that big business like Live Nation and AEG currently hold, has changed the UK live music sector significantly over the past 15 to 20 years.
This report will look into the UK’s live music industry and how it has changed over this period of time, analysing the various factors driving that change. It will also look at the impact that recent regulation changes and the emerging secondary ticket market may go onto have, in order to predict the future of the live music economy in the near future.
Originally proposed in order to cut down the processes involved in applying for licenses to sell alcohol, host regulated entertainment and provide late night refreshments, the 2003 licensing act was expected to create a more diverse night time economy. The need for six individual licenses would be abolished, replaced instead by the need for a single premises or personal license to cover all licensable activities at one fixed cost. The application process would be made to the local council, rather than the national courts, making licenses easier to regulate. It would end fixed closing times to reduce the amount of rushed drinking before 11pm, and aimed to reduce public disorder. [Richmond.gov.uk, 2005].
Unfortunately there were many unforeseen repercussions from the act, many of those hitting grass roots music venues. The act made licenses compulsory for small pubs and clubs to host regulated entertainment. This lead to concerns that 56,700 smaller clubs and “toilet venues”, who had previously not needed licenses, would now face closure. This would result in the number of concerts taking place in the UK every night falling by around 50% from 4,500 to 2,250. Despite this concern, the act was put into place with no amendments to address these issues [Higgins, C. & Gibson, O. 2005].
Many notable live music venues throughout the UK ended up closing and were turned into residential spaces or restaurants. This is because of the cost of the new licenses (on average an extra £1600 per year) and the application processes that were both lengthy and complicated [Sabbagh, D. 2011].
The localisation of the applications also led to stricter rules on licensing implemented in certain areas. One of the most extreme circumstances of this was in St. Albans, where although licenses were granted for live music performances, they were very prohibitive. For example; there were restrictions on the number of performers allowed in a space, restrictions on frequency or amount of performances, restrictions on genre/style of music performed and signs having to be displayed warning of upcoming events. Although this is an extreme and localised case, it is an example of the impact the act went on to have in some places [King, J. Jaggar, P. Rayner, L. Robertson, D 2009].
However, it could be argued that the closure of these low quality and dirty “toilet venues”, with their poor facilities and equipment, could actually benefit musicians. Online promotion and marketing has made it easier for new bands to create a buzz and fan base themselves, negating the need for small scale promoters [Hasted, N. 2005]. The rise in cost and processing time of licenses has further squeezed out these low and mid range promoters that used to be so prominent in the live music world [Harris, J. 2013]. This has led to corporate brands such as MAMA Group and DHP promotions purchasing small venues. The additional funding provided by these brands has ensured their venues have award-winning facilities, creating a better gigging experience for both bands and fans [MAMA Group 2014].
On the other hand, the independent venues that have survived have not only had to cope with the licensing fees, but also the rising costs of putting on bands that have come to expect the quality offered by corporately owned small spaces. Because of this, despite The Forum in Tunbridge Wells being named best small venue by NME in 2012, it is staffed entirely by volunteers. The money that the co-owner can spare from the profits of his local pub chain funds the annual £7,000 loss the venue makes. The forum carries on through dedication to music, and because the volunteers’ feel that towns don’t need places selling wood fired pizzas, they need music venues. [Lamon, T. 2012]
This sentiment was echoed by the former chief executive of UK music Fergal Sharky, who said; “The licensing act is failing small venues and that is having a huge impact on the future of the live industry.” [Topping, A. 2012] Lord Tim Clement-Jones also felt change was needed, and so helped bring forward the live music bill of 2012. The purpose of the bill was, according to Clement-Jones, was “to breathe new life into the live music scene” [The Guardian 2009]. The bill removed licensing requirements for; live music between 8am and 11pm, in venues up to 200 in capacity, that are already licensed to sell alcohol, and non amplified music between 8am and 11pm in all venues [Penrose, J 2012]
Most music industry professionals welcomed this act as a sign of the government noticing the unintended harm the licensing act had caused. However, the extent of the impact is yet to be seen, and there have already been criticisms levelled at the bill. For example, small scale corporate owned venues have invested time and money into their high quality performance spaces. These venues risk being undercut by amateurs not needing a licence, putting on cheaper events in spaces not meant for live music shows, resulting in poor sound quality and a bad gig for both fans and artists [The Rocktober Report 2009].
There are also wider issues to consider when looking at the nationwide closure of small venues, not associated with the Live Music bill. The recession has led to people having less disposable income, and combined with rent increases on properties, pressure has been heaped on venue owners. The rise in VAT to 20% also hit smaller shows, as having to charge more to ticketed events in a time where people have spare money is not going to bring in customers [MacVeigh, T. 2012].
The ability to promote shows at smaller venues was also hampered with the introduction of the clean neighbourhoods and environments act in 2005. The act presents councils with the powers to control the distribution of free literature, in order to keep neighbourhoods clean. A person found guilty of putting up posters in public spaces without a license can be fined up to £2,500, and the licenses to distribute flyers are prohibitively expensive [Clean Neighbourhoods and environments act 2005. 2014]. The Internet has allowed small venues to promote through social media, and flyers can still be given out inside venues. However, it is thought that the act has made it harder to make the general public aware of small shows, therefore reducing audience numbers and having a knock on effect to their revenue [Appleton, J. 2014].
Technological advancements may also play a part in peoples decisions not to go to smaller gigs by lesser-known artists. It could be suggested that music-streaming services have inadvertently created a “try before you buy” culture. Perhaps people are now only purchasing tickets to concerts by bands they know and love, rather than taking a risk on an unfamiliar artist. YouTube has also allowed potential concert goers to see what exactly is in store for them before going to a unknown artists show, or to even stream the performance of a megastar act live into their living room in some cases. This could also be linked to the rise of arena gigs and the monopolisation of the upper echelons of the live music industry by the likes of Live Nation and AEG, as demand for tickets for huge acts with substantial followings and big production stage shows needs to be fulfilled.
Live Nation is the result of various purchases and mergers by American Robert Sillerman’s company SFX. After buying up lots of live music promoters in the US, SFX purchased three of the most significant UK promoters (Apollo Leisure Group, Midland Concert Promotions, and the Barry Clayman Corporation) in 1999. Clear Channel then bought SFX, and rebranded all of its live music interests into Live Nation in 2005 [Brennan, M. 2014]. Live Nation has gone on to become the worlds largest concert promoter, organizing around 30,000 gigs per year, and turning over almost double the entire revenue of the UK music industry [Ingham, T. 2014].
Part of the reason for this huge amount of growth in the live sector is due to the decline in record sales thanks to the rise of internet download sites, streaming services and piracy. However the level of investment pumped into the live music world by huge corporations has resulted in better facilities in arena sized venues throughout Europe, enabling higher ticket prices to be charged. This has led to multinational companies being able to entice huge heritage acts out of retirement onto lucrative tours, as well as being able to cash in on maximum revenue when contemporary pop acts perform live [Music Week 2012]. High capacity venues and high-ticket prices obviously lead to huge sums of money being generated when arenas do sell out, but what happens when they don’t?
The music industry now moves at such a high speed, due to increased fan-to-fan connectivity, leading to a lower level of control from the traditional record label hierarchy [Wikstrom, 2013]. This has resulted in managers and booking agents getting involved in much earlier stages of an artist’s career to ensure they benefit from an artists success should they take off. The resulting team that ends up around the artist all need to be paid. So, in order to compensate for the lack of money generated through record sales, the act is booked at huge stadium sized shows the moment they have a hit. This is also cheaper for the label, which doesn’t have to provide tour support for a single arena show in a big city [Harris, J. (2013].
There are potential issues to be considered with this school of thought though. For example, the artist may not have had enough time to grow the fan base required to sell out these huge venues, which could result in a poor atmosphere and bad performance. If the act has enjoyed huge hype and does manage to sell out the stadium they are playing, they may not have had the time to create the bulk of work required to entertain the crowd sufficiently. The performer may be able to compensate for this by having the best sound in the world thanks to the state of the art facilities, along with the most amazing pyrotechnics and light show. However, if they have not honed their craft, they may not have the charisma or star quality to wow their paying customers. The possible result of any of these potential problems is that the artist may not have the demand for a further run of shows, resulting in their popularity level dropping significantly, and the average music fan moving onto the next act to be given the same treatment [Goldsmith, H. 2013].
A tour by a genuine superstar artist that has been building a fan-base over a number of years usually avoids these hurdles, generating such a huge demand that tickets sell out within minutes [Guardian 2014]. Circumstances like this and the internet have allowed the growth of a huge secondary ticketing market worth an estimated £1 billion per year, but is one of the most controversial issues within the industry today [All-parliamentary Group 2014] .
On one hand, the secondary market allows fans to buy and sell tickets for sold out shows. Usually the tickets are sold above face value, which allows tickets to set their own market price. Live Nations chief exec Michael Rapino supports this theory, as he believes the music industry deliberately undervalues shows as part of its core marketing strategy. Some tickets actual market value may be thousands of pounds, but an artist coming out and selling their tickets at that price would be a PR disaster [Ingham, T. 2014]. This is understandable, as it would come across as artists doing nothing to stop fans who are unable to spend hundreds of pounds on tickets, being priced out of their shows.
Because of this, there has been an outcry for governmental legislation to help stop the secondary ticketing markets prices spiralling out of control. Otherwise it becomes a place where event holders can allocate tickets directly to resellers and take a cut of the profits on the inflated sales figures, as uncovered by channel 4s dispatches investigation into ViaGoGo [JustMeSTKK 2012].
However, it is believed that too much time has elapsed to legislate the secondary ticketing market, and that one potential solution could be to be for the event hosts to be stricter in their allocations. Limiting the amount of tickets individual users can buy and requiring photo ID at event entry could massively dent the resale market. On the other hand, it could harm initial sales as tickets would be non transferable, so could not be bought as gifts. These restrictions would also be very expensive to implement on small-scale shows and so may not be practical to implement [All-parliamentary Group 2014].
Centuries ago, music and culture was only for the aristocracy and royalty, as they were the only people able to afford to indulge in these activities [Klein, S. 2014]. If the cultural industries do not take steps to address the secondary ticketing market, it is feared by some that the general public may be priced out of concerts and other cultural events, resulting in a return to such times.
Secondary ticketing, the closure of small music venues, cultural changes, sector economics, and diminishing record sales, have changed the way the live industry operates, yet has increased it’s importance to the whole UK music industry. Live Nation, AEG, MAMA group and DHP, among others, have provided high quality live music performances spaces of all sizes, and many “toilet venues” have closed their doors. The general public now expect this level of quality at every show they see, wether it be at the 20,000 capacity O2 arena, or the 200 capacity Borderline. This, along with poor economic times, has led to gigs becoming more a part of the broader entertainment palette, with people choosing between going to a live music show, football match or spa day. A gig at the O2 arena, with it’s cinema and many restaurants, has become a day out rather than just an evening event [O2, 2012]. Customers now expect high quality food, drink, and comfortable seating whilst watching globally renowned acts, something that small “toilet venues” can not offer.
Perhaps this is why the Live Music act of 2012 may not provide the huge boost to the UK’s small music venues it hopes to. Instead of new acts relying on constant touring and releasing album after album, slowly climbing up the venue ladder before they have enough fans to fill arenas, the process happens in a different way. The internet means artists can release a YouTube video that goes viral and leads to them gaining 100,000s of fans overnight, significant major label interest, and a headline gig in front of thousands [Beaumont, M. 2013]. If this is to be the future of the industry, perhaps the time of the “toilet circuit” is over and the arena is now king. Maybe the importance of the overall entertainment package now outweighs the importance of the intimacy, blood, sweat and tears offered by a tiny basement club, with sticky floors and paint peeling from the walls.
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