UK Music, the main music industry body in Britain, recently  published its annual ‘This is Music’ report, breaking down the industry’s performance in 2022. Right off the bat, the report announces that a total of £6.7 billion was contributed by the music business to the country’s overall economy in gross value added (GVA). Employment has recovered since the COVID-19 pandemic, reaching 210.000 job positions last year. 

The most striking figure is the £4 billion generated in music exports, which is roughly equivalent to $4.93 billion at today’s exchange rates. A significant increase when compared to the £2.5 billion export value in 2021. However, direct comparisons should not be drawn as this year’s report used a different methodology to collect data. 

UK Music goes on to explain that in collaboration with Oxford Economics, their economic consultants, reviews to the methodology needed to be made given industry’s structural changes. For example, in 2013, when the first ‘This is Music’ report was published, physical sales were much more relevant for estimating the industry’s generated value, whereas today streaming and music festivals are two of the main drivers of revenue. 

Live music not only carries more weight in current value estimations – likely due to changes in consumer preferences – but it is also experiencing a comeback since its full shutdown during the pandemic. 2022 hosted many rescheduled concerts from 2020 and 2021, which, in turn, ‘fuelled music merchandise sales, and public performance revenues’, the report says.

Overall, even though comparisons shouldn’t be made in the three key metrics – Valued added, Employment, Export value – UK Music states with certainty that ‘in 2022 the UK music industry outperformed 2019 by a significant margin’. This means that the industry not only recovered but thrived. To reach this conclusion they assessed year-on-year revenue figures that were unaffected by methodology changes. 

When it comes to the revenue generated in musical composition – one of the ‘Four Commercial Assets’ used to calculate music’s economic value alongside recorded music, live performance, and brand and image – the report states the former can be reflected in the performance of PRS for Music, the largest British collective management organisation (CMO). In 2022, PRS for Music’s revenues peaked at £964 million, a 22.9% growth relative to the previous year. Additionally, PRS for Music also accomplished its lowest-ever cost-to-income ratio, distributing £836 million to writers and publishers. 

Regarding the physical sales market, given that the decline in CD sales was more prominent than the 3.1% growth in vinyl sales, a 10.5% loss was still experienced, confirming the long-standing physical sales downward trend. On the contrary, all revenues related to streaming grew. Subscription for premium services rose by 4.8%, and video streaming on platforms like YouTube and TikTok grew by 11.2% in 2022.

One of the major variables affecting the performance of the live music sector was the return of Glastonbury since its last edition in 2019, and the resumption of touring by artists like Ed Sheeran and Coldplay. For example, Wembley Stadium hosted 16 concerts in 2022, which is 2 more than the 14 concerts it hosted in 2019. However, even though this reflects a positive trend in live music consumption, the report also highlights the challenges faced by promoters and artists due to inflation and increases in energy prices.

Lastly, one revenue stream that is still relatively small compared to streaming and physical sales but grew by 70% in 2021 and about 96% in 2022 is related to the monetisation and engagement of artists’ fan bases. This can be achieved through artists x brand partnerships, merch and digital asset sales, documentary distributions, among other means.

In the ‘This is Music’ report’s latest pages a spotlight is shed over a number of current and potentially future challenges the industry may face. The biggest one is the potential loss of British music hegemony worldwide to countries like Australia, Canada and South Korea, which the report emphasises ‘are increasingly more proactive and ambitious in promoting and supporting their music sectors’. 

To ensure this scenario doesn’t come to reality, UK Music set up ‘A Manifesto for Music’ with ten objectives the next government should try to achieve in the music industry:

• Encourage Responsible AI;
• Safeguard Copyright and Intellectual Property; 
• Boost Music Exports; 
• Supercharge Sector Growth; 
• Protect Music Spaces; 
• Improve Music Education; 
• Progress Diversity and Inclusion; 
• Enhance Freelancer Protections; 
• Support Public Service Broadcasting; 
• Utilise Music to Benefit Society. 

UK Music urges the Government to impose a national music strategy to stimulate economic growth, innovation, and quality of life for all those working in the industry. The manifesto also establishes five demands to the next government:

• Ensure AI supports human artistry through strong copyright standards, clear labelling and record keeping requirements, and protections for the personality rights of music makers. 
• Fix the European touring crisis by securing a Cultural Touring Agreement with the EU.
• Introduce a tax credit to encourage new UK music production.
• Invest millions more in music education and recruit 1000 more music teachers. 
• Secure a fair deal for music lovers by ending rip-off secondary ticketing practices.

The growth witnessed in the UK’s music industry is also being experienced worldwide. Earlier this month, Will Page, Former Chief Economist at Spotify, and author of ‘Tarzan Economics’, reported that in 2022 the global value of music copyright reached $41.5 billion, 14% more than in 2021. 

Labels were the entities that collected most out of this value – $26 billion, to be exact. Nevertheless, CMOs’ performance exceeded expectations with collections reaching $11.4 billion, one third bigger than their 2020’s collections. 

In conclusion, UK Music’s ‘This is Music’ report for 2022 reveals a thriving industry and celebrates past successes while outlining a strategic vision for sustained growth and influence.