How to Transform Ireland’s Music Business
Time to get ready for a jolt. Once life gets back to normal, Ireland is about to be confronted with the scale of transformation. Its rock stars, trad masters, presenters and impresarios – all the influential figureheads who’ve loomed so large over Ireland’s skyline for the last 40 years – will be looking and sounding a whole lot older. The same applies to the so-called mainstream media. The national newspapers, FM stations and TV channels, all the old arbiters of stardom and public opinion are sinking faster into golden-ager niches. In five years, when Bono is eligible for a free bus pass, how many of the old Irish antennae and mastheads will still be standing?
For the children and grandchildren of today, the last century is already dead. All the star-maker machinery has migrated to smartphones and social media, now its own trillion-dollar marketplace charging ahead to its own sleepless pulses. For their world, there’s actually no reason to be overly pessimistic. The biggest music boom in history is now in formation, and without putting too fine a point on it, all the middle-aged whining about streaming isn’t just ungracious to the young, it’s factually ignorant, and lacking terribly in self-awareness. Study this extraordinary new economy in detail, and it’s a no brainer: A musical, tech-savvy island like Ireland should be embracing the future with wide open arms. This is an opportunity to become a truly independent, copyright-owning, job-creating music culture.
To get there, this essay attempts to identify what we have been doing wrong, and initiate a long overdue national conversation about music entrepreneurialism. As well as taking a look at Ireland’s existing structures and backstage habits, I identify an overseas model worth studying. But above all, this essay attempts to seize a moment that will define the success or failures of the coming decade. With Covid-19 now reaching endgame, we approach an intergenerational milestone. In just a few months, we’re about to enter a whole new situation of reopening, rebuilding and readapting to a global marketplace that’s grown a whole lot younger and more technological. Time now for Ireland to get working on an ambitious new music plan.
Our lopsided industry
So, what’s the immediate state of affairs? The short term is definitely looking dicey for Ireland’s live industry. With a second summer of lockdowns now virtually certain, the risk of bankruptcies intensifies. It’s a cashflow issue. Most people who bought tickets for 2020 shows held onto them, hoping that the rescheduled dates for 2021 would happen. But as dates get pushed further back, the risk of cash-strapped ticket holders demanding reimbursements puts concert promoters in a situation similar to banks in the 2009 financial crisis. If everyone asks for their money back, Ireland’s live sector will enter a whole new level of pain and destruction.
We would, however, be foolish to over-dramatise the dangers. Not everybody will ask for their money back. As lockdown drags on and vaccination accelerates, public demand for the first gigs will probably intensify. Some tickets may actually gain in value. The biggest danger is for smaller festivals and venues that were losing money before Covid. Evaluating what gets bailed out and what gets left to die will be a grim chore for culture minister Catherine Martin. But again, she, like the rest of us, would be wise to focus on the bigger picture.
Generally speaking, Ireland’s €150 million concert industry is the sturdiest fixture of an otherwise fragile music economy. Pre-Covid, it was selling over two million tickets a year, higher per-capita spending than in the UK. Market leaders MCD and Aiken Promotions are solid companies with assets, securities and popular festivals.
What we all need to understand about Ireland’s music business, however, is the lopsided importance of the live sector. Take the planetary average: The global live industry in 2019 was about the same size as the global recordings industry. Both were generating approximately $20 billion a year each. The split between ticket and record sales varies from country to country, but no market is anywhere near as lopsided as Ireland’s. The Irish live industry actually is an industry, employing thousands and attracting the world’s biggest artists and corporate sponsors. In comparison, the native record industry is more of a farmer’s market of mini indies, sole traders and home-studio hobbyists. And that’s just the pound for pound comparison. Factor in all the spin-off business and the chasm gets even wider.
In Ireland, for every euro spent at the box office, artists take home around 20 cents, the remaining 80 cents going to promoters, production crews, security guards, policemen and overheads. By far the biggest benefactor of gigs and festivals is actually the hospitality industry. For every box-office euro, concert-goers spend an additional six euros on food, drink, travel and accommodation. In a hard-partying culture like Ireland’s, live music is a very effective crowd magnet at the heart of a billion-euro organism involving merchandisers, hotels, pubs, restaurants, taxis and airlines.
Fear not for Ireland’s live industry. It will roll with the punches and bounce back. The country’s true infrastructural problem is hidden elsewhere. If you’re looking for elephants in the room, or in Ireland’s case, missing elephants, there’s definitely a jumbo-sized mammoth in the proverbial museum. It’s called copyright drain, a term we need to be calling out far more often. It works like this: Van Morrison, U2, Enya, Thin Lizzy, Gary Moore, The Boomtown Rats, Chris de Burgh, The Pogues, Sinéad O’Connor, The Cranberries, The Corrs, Boyzone, Westlife, The Script, Rory Gallagher, Planxty, The Gloaming: all the world-conquering music we think is Irish, is actually foreign-owned copyright being sold back to Ireland from the UK and America – the artist getting around 20% of wholesale price.
Good for them. Especially those who were selling millions of CDs in the 1980s and 1990s, when retail prices were historically high and artists were tax exempt. The problem for Ireland of course is that its wider talent pool has not been benefitting from the gargantuan profits. The other 80% of revenues on ‘Irish’ blockbusters – a sum definitely in the hundreds of millions, possibly billions – never reached the Irish music industry in any kind of knock-on or trickle-down form. It was re-invested in the copyright-owning UK and US music industries, their jobs, and young English and American artists. Call it what you like, market forces or post-colonial underdevelopment, but it’s why Ireland’s music society is still such a medieval model of rock lords and buskers – with nothing in between.
Building a musical middle class
Without native copyright streams recycling international success back into the island’s own talent pools, Ireland can’t build a musical middle class. Without its own marketplace of exporter labels, young Irish producers, publicists, talent hunters and music entrepreneurs also have to emigrate. And it’s this giant brain drain – of both content and people – that’s left Ireland’s strange music business a windswept gigs market benefitting pubs and hamburger stands. Sure, along the edges of this fairground model, there is a relatively small, state-funded cultural sector. But beyond a few hundred people employed full-time by various arts institutions and gig promoters, Ireland has piss-poor career opportunities in music.
It’s easy to understand how it happened. For generations, the only road to fame and fortune was via London, New York or Los Angeles. In the old days, when payola ruled the airwaves and record distribution involved heavyweight finance and logistics (see chapters 19, 24, 27 and 28 in Cowboys and Indies: The Epic History of the Record Industry), Ireland didn’t have the big boy machinery to break ambitious young talent into the planetary mainstream. To give you an idea of the barriers and secret clubs that used to exist: in the 1980s and 1990s, getting a song rotated on American top-40 radio cost up to $400,000 in bribes. Making the accompanying video for MTV rotation cost another $100,000. Tour support cost hundreds of thousands more. Studios and producer fees, CD pressing, warehouse stockage and the high-risk models of 90-day consignment brought the costs of blockbuster albums to over a million dollars. Hence all the buyouts and mergers into what we have today: three super-sized majors, Universal, Sony and Warner, collectively owning a staggering 68% of the entire music market.
But Ireland’s problem was always more than just the absence of labels. It’s also been a perceptions problem of seeing so many rock stars on the streets and naïvely believing that because of their success, the whole island tribe was a master race of intergalactic rock conquerors. Artist tax exemption probably accentuated this cosy delusion. For a while, the coastlines of south Dublin were teeming with English pop stars. In reality, their money was never actually in Ireland, and even Irish stars were spending lots of time and money abroad. Indeed, the most baffling aspect of copyright drain is how Irish society seems to actively ignore it, like it’s some kind of embarrassing family secret best glossed over.
Going forward, cultural policy needs to be far more lucid about how all this affects the Irish youth in profoundly negative ways. Just as importantly, it needs to better understand just how much the old business models have changed. Since the early 2000s, the beleaguered recordings industry has witnessed seismic shifts in the very cost/risk equations of production, delivery and marketing. With the advent of streaming and social media, music has been greatly democratised. Although the majors still have an enormous advantage, thanks to the market share royalty system that streaming platforms had to give them, the indie record label model has become viable again. In today’s market, anyone can now score a planetary hit.
Same as it ever was
And yet, for Ireland, it’s like nothing has changed. Today’s bright young talents continue to take the same old road to London and New York where they sign away their copyrights to the world’s best brands. Same as it ever was for Fontaines D.C., Lankum, Kodaline, Soak, Ye Vagabonds, Pillow Queens, Rosie Carney, Maria Somerville and probably the next batch of hopefuls. And who can blame them? Without native support structures capable of giving them the same breaks, the pattern of copyright drain and music class poverty will keep repeating.
But this can change. In the age of streaming and social media, Ireland doesn’t have to rival London head on, it just has to improve access, opportunity and entrepreneurial infrastructure so that Irish copyrights are being leased to overseas partners rather than being signed away completely. This would mean higher percentages, more territorial partners, closer artistic control for artists, and better reinvestment opportunities for labels.
There’s plenty of promising Irish indie labels already out there; the problem is that they’re running on empty, understaffed, isolated, priced out of city centres, and insufficiently geared towards export. To break Irish music into the world, a label needs to be able to pay for advances, producers, studios, videos, artwork, and, most expensive of all, a full-time staff of coordinators and pluggers able to jump on planes and make things happen. For young indie labels, it’s a catch-22 situation: Creating world-standard copyright requires levels of cashflow that Ireland’s tiny market cannot generate. Without backing, it’s near impossible to make and manage exportable product. As a 2018 IMRO report concluded, ‘Access to finance and funding is perhaps the single greatest obstacle faced by entrepreneurs in the cultural and creative industries. The assets of many cultural entrepreneurs are intangible (creativity, copyright, etc.) and difficult to assess, meaning that banks do not always recognise their full economic value.’
The diagnosis is broadly correct, but it’s pointless to blame banks. The music industry has never been able to count on banks for much more than overdraft facilities – which are a mixed blessing anyway. Even in America and the UK, where there’s a century-deep culture of major-league record production, it was typically hardware manufacturers, radio corporations, film studios and media conglomerates that invested in history’s biggest and best record companies: Victor, RCA, CBS, EMI, Philips, Warner, United Artists, Sony, BMG, Universal. In their own ways, independent labels have always learned how to survive without bank loans. A great many started out as either shop chains or warehouse distributors: King, Island, Virgin, Beggars Banquet, Rough Trade, PIAS, Secretly Canadian and others. Motown was intentionally designed as a ring of separate businesses, each one based in its own houses along the same road – the studio, the touring agency, the publisher, the management company, the label. Today, as always, most hit factories last the distance by being part of larger organisms that move money from pocket to pocket to ease cashflow difficulties.
This is actually why Ireland remains such a cruelly barren rock for music producers: What’s actually missing isn’t friendly bankers, it’s the support of big business and neighbouring sectors. Ireland has an organisational problem of artists cut off from commercial markets, and labels cut off from big business. There’s been two brilliant exceptions over the years that illustrate the point. In 1975, Diane Guggenheim, an American mining heiress living in Ireland, invested in Mulligan, the Bothy Band’s label that went on to release brilliant albums from Andy Irvine and Paul Brady, The Boomtown Rats and others. In recent years, Caroline Downey and Denis Desmond, owners of gig giant MCD, invested in Rubyworks, the Dún Laoghaire indie behind Hozier, David Keenan and Rodrigo y Gabriela. Alas, these are the rare exceptions that prove the rule. To the detriment of Irish music, big Irish money does not invest in labels. In fact, nobody in Ireland seems to even understand their vital importance.
A society of farmers
That could soon change. This century, there are small countries out there skillfully overcoming all the same financial, geographical and psychological barriers. Scandinavia is the glaring case in point. On a number of levels, Ireland has fundamental similarities with its Swedish, Norwegian, Danish and Icelandic cousins. Under-populated, bilingual, well-travelled, tech-friendly, they also grew up watching Top of the Pops every Thursday evening. And yet, like Ireland, they’ve always remained, in their own particular ways, proudly different. They’ve also long produced their fair share of trailblazers – ABBA, Björk, super producer Max Martin, Röyksopp, The Raveonettes, Sigur Rós, Agnes Obel, Trentemøller, Jóhann Jóhannsson and others – most of them signed to UK labels. But it’s really in the hi-tech 2000s that Scandinavia has risen into a world-class producer and exporter of interesting music, proving that in the age of Spotify, you don’t need to be based in London, New York or Los Angeles to reach large international audiences. Nor indeed do you have to peddle throwaway pop.
To understand this phenomenon, I quizzed one of its key eye-witnesses, Jonas Sjöström, founder and CEO of Playground Music, Scandinavia’s biggest indie. Distributor, publisher, management agency and label group, Playground began in Stockholm in 1999 at the tail end of the CD boom. It’s now a multi-armed regional leader with branch offices in Copenhagen, Oslo and Helsinki. So, what’s the secret behind Scandinavia’s steady rise into a mini music superpower?
‘Forget all the clichés about Vikings,’ explains the soft-spoken Sjöström. ‘We’re really a society of farmers. A certain kind of land-owning farmer who had to survive hard winters in sparsely populated environments. It’s our belief in self-sufficiency. It’s the absence of feudal systems. It’s the way we interact with each other. It’s all our big references – ABBA, Björn Borg, Volvo, IKEA, Lego, Spotify. It’s how we learn English from the age of six and watch the BBC without subtitles. It’s the way our music business is more open, the way we produce producers. It’s how we travel a lot and study export markets. It’s our education. It’s a multitude of factors that created today’s entrepreneurial culture without much government help.’
The one area where the Scandinavian music business does believe in big government is music education. Scandinavia is top of the world when it comes to providing children with instruments, sound equipment, rehearsal rooms and tailor-made tuition. The state is also very generous with student grants. Undeniably, their labels, nightclubs, festivals, studios and gear shops all benefit from such high levels of youth spending and musical literacy. The combined synergy gives their home markets a huge grassroots advantage. But the secret to their success always comes back to those core Nordic ideals of access and inclusion.
‘When I see how things work in other European countries,’ says Sjöström, ‘it’s all about who you know. It’s all about connections. You see a lot of vertical systems that create very inward behaviour. In almost every way, Scandinavia is the exact opposite. Our markets are much smaller so exporting is the only way for us. We don’t like the idea of relying on government or inside connections. We’re ambitious in our work but we’re more modest in how we interact with each other. We post our email addresses on our websites. Young artists can talk to us directly. And we talk back to them as equals. In every way, we’re friendlier, more open, simpler, more on the same level.’
Take Spotify, Sweden’s biggest number one since ABBA. What nobody gives the Swedish giant due credit for is the way in which it’s made music more accessible to low earners, students and developing countries. In comparison, Apple’s iPods and iTunes Store was a much messier jumble of prohibitively expensive gadgetry unapologetically aimed at yuppies. Then came Spotify, a bit like IKEA or H&M, opening up a much wider market with an unbeatably simpler, cheaper formula. Everything on tap for €9.99 a month, no snazzy gizmos required. Just as importantly for music producers, streaming has modified the whole DNA structure of copyright commerce. Music is no longer a business of one-shot sales. It’s now a long-term rental system of plays and market shares. We’re only beginning to understand the subtle effects on producer cashflow and how today’s labels are being perceived by big finance. If the number of market reports and publishing buy-outs are anything to go by, we’re starting to see that capital investors are taking a far keener interest in music catalogues. Costless to run, the same songs can now earn every month like drug patents.
Trends in Scandinavia illustrate just how much music is becoming enmeshed into the hi-tech landscape. As Sjöström puts it, ‘You’ve got to place music in the bigger environment. All over Scandinavia, but particularly in Sweden, we’ve now hundreds of successful start-ups exporting all over the world. In this way, opportunities for finance have definitely improved.’ Spotify, Tidal, Linux, Klarna, Minecraft, Candy Crush – Scandinavia is Europe’s answer to Silicon Valley. Scandinavian music labels, although dwarfed by these billion-dollar brands, are rising with the tide and just as significantly, adopting certain hi-tech character traits. If you visit any Scandinavian capital and study their youth industries, you’ll see lots of old factories and red-brick mills converted into stylish multi-floor office spaces, shared by games and apps developers, music labels, recording studios, graphic designers and other creative start-ups.
How to boost label culture
All of this should be music to Irish ears. Ireland already has its own hi-tech hubs and capital investment networks. If knitting music production along the cutting edges of Ireland’s hi-tech landscape is the smart way forward, there are simple, doable solutions that require little more than a reorganisation of existing methods and building blocks. So how exactly do we do it? Here are my five suggestions to boost label culture and transform Ireland into a more independent exporter island:
1. Public investment. Either through the Arts Council, Enterprise Ireland or a new structure, we need an investment system for music labels, distributing grants on a credit-rating basis so that commercial success is rewarded. It’s as simple as this: if you really want to help Irish artists, help Irish labels. As any artist manager, studio producer or touring agent will tell you in a flash, what a musician needs most isn’t actually money, it’s a support structure. That’s why showering grants on lone musicians, however noble, is like prescribing anti-depressants and expecting miraculous happy endings. Far smarter to invest in the beehives that cultivate groupthink, commercial ambition and self-sufficiency. There’s a thousand reasons why record labels have survived the internet revolution. In fact, they’ve thrived, disproving all the predictions that artists would sell their stuff directly to fans because technology made it theoretically possible. Music is inherently organisational. Nobody can do it alone. Labels are the heart pumps of the whole commercial ecosystem. They’re the best at spotting talent and convincing the media that something new is worth showcasing. They’re also the best at coordinating producers, video directors, graphic designers, publishers, agents, publicists and distributors around the building of careers. They don’t even have to be big. They just have to be effective.
2. Creative hubs. The single biggest killer of young indie labels is rent. Help them spend their grants wisely by providing rent-free workspaces. In fact, there’s no point handing out grants without also providing workspaces. Start-up labels, not having back catalogues, need to invest all their precious money in recordings, videos, team wages and artist royalties. Hubs also create synergy and healthy competition. Socially and professionally, young guns will benefit hugely from operating in busy places alongside neighbouring businesses, notably graphic designers, video games developers and other digital creators. Mini beehives seem to thrive better when placed within or beside bigger beehives. It’s always been thus. The Brill Building on Broadway, Bleecker Street in Greenwich Village, Music Row in Nashville, Denmark Street in the West End – the history of music is a map of swarm points which seem to intensify behaviour, cross-fertilize skills, foster entrepreneurialism and draw in crowds.
3. Music business education. With the help of the Arts Council, Enterprise Ireland, First Music Contact, IMRO, and other existing organisations, there are a wide number of skills that aspiring producers and music entrepreneurs will need to master: How artist contracts work, how royalty accounting works, how music publishing works, how global streaming works, how to promote music on social media, how studios work, and how hit sounds are made. These are complex, labyrinthine subjects that can and should be taught by experienced professionals via seminars and other community events.
4. Private investment. If building a vibrant marketplace of exporters is the bigger objective, government policy should be firmly focused on fostering an entrepreneurial environment that attracts and facilitates private investment. As previously stated, the most supportive backers of record labels have always been hi-tech corporations and other interested neighbours. As current trends in both America and Scandinavia illustrate, this pattern is repeating in the streaming age. In America today, video games are providing more business for record labels than Hollywood and TV combined. The likes of Apple, Google and Amazon are investing billions in music services. The vast multi-trillion-dollar digital ecosystem needs music and has the cash to invest in production. In Ireland, trade and culture policy should explore novel ways to encourage convergence between recorded music, digital entertainment and live music. Tax breaks are one obvious avenue, but there could be cuter techniques to explore. For example, the way the French film industry recycles box office VAT directly back into production via credit-rated grants.
Whatever the method or routing, here’s the principle: The Irish state is already generating considerable tax from music. List off all the industries that turn over tens of millions every year on the back of music: gigs, IMRO, pubs, advertising, TV, cinema, video games, on-site merchandisers, and bars; even the tannoys in supermarkets, restaurants and hotels generate taxed revenues. Then consider the hugely positive effects of bringing music-dependent sectors closer together. Time now to better imagine how these diverse tax streams could be rerouted to help talent pools and support structures work together and create and export Irish-owned copyrights.
5. Broadcasting. It’s no coincidence that the world’s two biggest producers and exporters of music – America and the UK – also have the most influential media. Export cultures don’t just produce, they stand up and speak out to the world, proud to show off their stuff. It’s like a two-way electrical circuit: production helps broadcasting and broadcasting helps production. If modern Ireland is serious about becoming a digital island of world-class producers and exporters, RTÉ has got to invest much more in music programmes and its global digital reach. To break out of Ireland, a rebrand might be necessary. Needless to say, labels promoting Irish music abroad would not rely on RTÉ; they’d be plugging their product in as many places as possible. But a global Irish platform would greatly help Irish exporters reach and identify audiences in America and elsewhere. The island’s whole cultural economy needs to plug into its vast genealogical diaspora and beyond. This is where we have a natural advantage over Scandinavia.
Mix all this up – hubs, credit-rated investment, label culture, digital convergence, export focus, a global voice to showcase Irish music and culture – and this is how to steer the island into a bigger, brighter future of creativity, employment and influence. Financially, sociologically, artistically, all parts of Irish life stand to gain. For if the right environment is created for copyright streams to rise, not only will jobs, hits and careers grow, gig promoters, the hospitality industry and digital entertainment will in turn benefit from larger numbers of Irish artists pulling in bigger and bigger audiences around the world. Bottom line: The future will charge ahead with or without Ireland. Time now to roll with the changes and get much better at what Ireland does best.
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Published on 17 March 2021
Gareth Murphy is author of Cowboys and Indies – The Epic History of the Record Industry. For his music business articles in the UK press, he won Writer of the Year at the 2017 PPA Independent Publisher Awards. He ghostwrote Siren Song, Sire Records founder Seymour Stein’s official autobiography, and lives in Paris.