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MMF and FAC suggest recoupment holidays to support artists hit hard by the COVID-19 shutdown

By | Published on Monday 30 March 2020


Representatives for artists and managers in the UK last week called on larger companies and organisations in the music business to do more to help those most severely impacted by the COVID-19 shutdown. Such support is essential, they said, to ensure the “longer-term viability of artists and music-makers”.

The demands came as the Music Managers Forum and Featured Artists Coalition were the latest music industry organisations to publish data on the impact of the live music shutdown caused by measures to restrict and delay the spread of COVID-19.

A survey of 150+ artists and managers reported on the impact of more than 2100 cancelled shows, which have resulted in lost gross income of £49.3 million, with managers losing £3.1 million in commission. If the live industry shutdown was to extend for six months, £61.4 million in expected income would be lost.

A number of emergency relief funds for artists and songwriters have already been launched in the UK by the likes of PRS, Help Musicians and the Musicians’ Union, with the country’s arts councils also announcing emergency schemes for the wider creative sector.

Meanwhile, the UK government last week finally announced measures to support the self-employed as well as businesses and those in formal employment. Such support is vital for the music industry, where more than 70% of people work on a freelance basis.

However, MMF and FAC argue, more is needed. For starters, there are still gaps in government support. The grants for the self-employed only apply to those who are registered as sole traders with the tax authorities. Those who are self-employed but run their business affairs through limited companies, via which they pay themselves a salary and dividends, do not qualify. Concerns have been expressed that these people fall in a gap between the business support measures and the self-employed support measures.

Although welcoming industry and government led support schemes, the MMF and FAC noted on Friday that “we are already seeing far more comprehensive support packages in other countries. For instance, GEMA, the German music licensing society has launched a 40 million euro crisis fund for its songwriter members. The Swedish government has announced a cultural response fund of 45 million euro, while the Norwegian government has also earmarked significant new funding of 25 million euro for their cultural sector”.

Referencing the results of their survey, the two trade groups said: “Aside from an immediate-term cashflow crisis, the findings raise grave concerns for the commercial music sector’s longer-term sustainability. They signal the need for greater assistance from the UK’s largest music businesses and organisations – especially as government support measures for the self-employed will not pay out until June, and many will not qualify at all”.

The MMF and FAC propose four ways those larger music businesses and organisations could help, including the major players making donations to the various emergency relief funds that have been set up, and collecting societies making advances available to members.

The two groups also back the proposal made by the Ivors Academy last week that unallocated streaming royalties on the songs side – usually distributed around the industry based on market share – be set aside for a special fund for those most in need.

Though the most original proposal to come from the MMF and FAC is that the major and larger record companies and music publishers offer the artists and songwriters they work with a ‘recoupment holiday’ for a defined shot-term period.

This would mean that artists and songwriters whose monthly streaming royalties are still paying off cash advances previously received or other recoupable costs a label incurred would – for a time – receive those royalties in cash. Labels and publishers would then be able to carry on recouping all other monies once the current COVID-19 crisis is over.

Commenting on the survey and recommendations, MMF CEO Annabella Coldrick says: “Artists and music-makers are faced with a short-term crisis and a longer-term catastrophe. This MMF and FAC survey is only a snapshot, but it highlights that millions of pounds have already been lost through cancelled shows and campaigns. With government support for freelancers not kicking in until June we need the biggest record labels, music publishers and licensing organisations to act. We need them to do more, and we need them to do so now”.

Meanwhile, FAC GM David Martin says: “It is evident that the artist and creator community is suffering enormously as a result of the COVID-19 pandemic. While our survey only demonstrates a proportion of the actual losses, the numbers highlight the acute challenge facing artists and the existential threat that this presents to our wider industry. We need all parts of the global music community to do their bit to support those that are most in need, and those with the greatest resource must do their fair share to provide this support”.

Also calling for more support for artists from music industry organisations this morning was IAFAR, which represents companies working in the so called neighbouring rights sector. These are agencies that manage and administer performing right royalties on the recordings side, working for frontline artists, session musicians and independent labels.

Those royalties are usually collected first by the record industry’s collecting societies. IAFAR notes that, while on the songs side, a number of societies around the world have already announced significant schemes to financially support those members most in need, the record industry’s societies have been slower to respond.

The trade group states: “IAFAR encourages all artist performance rights [societies] to use their black box funds and reserves to mirror the PRS relief efforts and to reassure their members that they are open for business, working on interim solutions for the short-term survival of their members and the timely payment of royalties already due”.

The UK record industry’s collecting society PPL – which administers royalties for both labels and artists – said on Friday that it was looking into implementing measures that would speed up the payment of royalties in the months ahead, and would also support some of the emergency relief funds already established by UK industry organisations.