What Brexit Means For The U.K. Music Business

What Brexit Means For The U.K. Music Business

Following the result, the pound fell to its lowest level against the dollar since 1985. The implications for the music industry are similarly grave with the decision to leave the economic stability of the EU anticipated to impact heavily on the live sector.

The British music industry and wider touring business faces a turbulent future after the United Kingdom voted to leave the European Union (EU).

Thursday’s historic referendum saw 52 percent of the electorate vote to exit the EU – dubbed Brexit – with more than 30 million people voting, the country’s highest turnout at an election in over 20 years.

Following the result, the pound fell to its lowest level against the dollar since 1985. And David Cameron subsequently announced that he is to resign as prime minister of the U.K., with a new PM taking his place by the start of October.

The implications for the music industry are similarly grave with the decision to leave the economic stability of the EU anticipated to impact heavily on the live sector. A members’ survey conducted before the vote by the labels trade group BPI found that a two-thirds majority opposed Brexit on the grounds that going alone would carry grace consequences for the U.K. music biz.

“We’re stunned and saddened at the UK’s decision to leave the EU family,” Beggars Group founder and chairman Martin Mills said of the news in an email to his staff provided to Billboard. “While we digest the consequences, we’d just like to re-assure you all that the Beggars family is, always has been, and always will be, international, with no frontiers.”

As one of the EU’s 28 member states, alongside France, Germany, the Netherlands, Spain and Sweden, British touring artists could freely travel and perform throughout the major markets in Europe at will. Now the U.K. has voted to leave, there is the distinct possibility that acts will require separate working visas for each EU country they wish to visit.

The extra red tape and administrative costs involved will have big implications for European tours, with smaller bands and tightly budgeted treks likely to be among those hardest hit.

John Reid, the president of concerts for Live Nation in the U.K. and Europe, says Brexit “won’t affect overall business” for the leading promoter, producer and venue operator in the territory. “We just have to pay continual and close attention to currency swings, both long and short term,” Reid tells Billboard.”The bigger picture is: I hope it doesn’t tip the EU Into deeper economic recession.”

Ongoing currency fluctuations will also leave a hole in budgets for already planned and costed European and British live runs, while increased costs to chartering flights in and out of the U.K. and tighter border controls will impede crew and freight travel for touring acts. The reintroduction of carnets – a document listing a full breakdown of equipment – is also a possibility for British acts wanting to tour Europe.

“Clearly, this was not a decision that anyone took lightly — in London alone, we spotted close to a hundred events on our platform where the EU referendum was being discussed in the run up to the vote,” Joel Crouch, GM of Eventbrite in the UK and Ireland, tells Billboard. “Like any other business, we cannot predict the precise impact of this outcome both on our company and the wider events industry in Britain. For the time being, that means business as usual for us.”

Richard Davies, founder of online fan-to-fan ticket exchange Twickets, which operates solely in the UK, is concerned that the referendum “may make expanding our business to Europe more difficult.”

Longtime digital consultant Sammy Andrews, a director of Entertainment Intelligence and former head of digital for Cooking Vinyl, says, “We wait to see how the dice fall on the U.K.’s gamble, but we do know it’s possible we’ll be hit with potential visa requirements, additional administration burdens, new trade agreements, potentially complex tax implications and levies. As someone working predominantly in the digital landscape I have concerns over both licensing and investment implications for music tech start-ups. There are also very important questions to be asked about the impact this will have on the ongoing copyright reforms for the digital ecosystem. The EU are very close to reforming some critical copyright issues and the U.K. is now standing on our own in these arguments.”

Indeed, Brexit also carries serious implications for how copyright is protected and enforced throughout Europe. At present, the European Commission is reviewing copyright legislation, including safe harbor provisions, as part of its Digital Single Market strategy. The U.K. stood to benefit from those regulations and, just as importantly, have a voice in how they are devised. That’s no longer the case, although the country’s newfound independence does raise the possibility of the British government formulating its own copyright regulations, free from Brussels’ restrictions.

There’s also concerns, however unlikely, that EU members states could introduce cultural quotas that will restrict radio play of British artists, while Brexit will almost certainly have a huge impact on migrant labor numbers in the U.K directly impacting on staffing at British music companies, which often have high numbers of employees from across Europe. Drew Hill, managing director of the U.K.’s largest independent distributor Proper Music, told Billboard earlier this week that at least one-third of the workers in the company’s 120 warehouses are European immigrants, due to a shortage of British applicants. “We would not be in the position that we’re in today in terms of having a very buoyant business were it not for those migrant workers.”

The leave camp, led by former London mayor Boris Johnson, had indicated that they would prefer to wait until 2020 for the U.K.’s exit to be completed. The U.K. is the first country to leave the EU since its formation in 1993. Reflecting on today’s news, Germany’s foreign minister Frank Walter called the result a “sad day for Europe and Great Britain.”

Speaking to Sky News, former Prime Minister Tony Blair has called it a “very sad for our country, for Europe, for the world.”

Artists have been taking to Twitter to express their surprise and disappointment inresponse to the Brexit news. Lily Allen called it a “sad sad day” and tweeted “Well millennials. We’re really really fucked.”

Referring to the expectation that the U.K. electorate would vote to remain, Alison Moyet tweeted “assumption is the mother of all fuck ups,” while Ellie Goulding said she was “heartbroken to hear the news.” Chris ‘Woody’ Wood, the drummer of British indie band Bastille, echoed that sentiment and said he was “heartbroken.”

Stuart Braithwaite of alt-rock act Mogwai referenced 2014’s Scottish independence referendum (which voted to remain part of Europe) and said the “worst case scenarios” of that vote “never looked this bad.”

“A victory for Brexit would be economically, politically, socially and culturally disastrous — for all of us,” claimed a joint letter signed by Beggars Group founder Martin Mills and Universal Music U.K. chairman and Chief Executive David Joseph that was circulated in the days prior to the national vote.

Drew Hill of Proper Music tells Billboard he would “be surprised if anyone knows exactly how this is going to play out. With the majority of British music actually manufactured in Europe, many UK labels will need to pay more to have their stock manufactured, and US labels will make less back from their UK sales.”

Under Article 50 of the Lisbon Treaty, the U.K. has two years to negotiate its withdrawal from the EU, although that process only begins once Article 50 has been triggered. The outgoing Prime Minister David Cameron had previously said that in the event of a Brexit result he would look to begin proceedings as soon as possible.

The full extent of just how serious Brexit will be for the music biz remains to be seen.

Additional reporting by Jem Aswad and Ray Waddell. BILLBOARD

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What Brexit Means For The U.K. Music Business