Live music in the UK: what’s the state of the industry?

The British music industry is a cultural and economic powerhouse. Accounting for 12% of the global market, the UK is home to the third largest domestic music market in the world (behind only the United States in first place and Japan second).

Almost 20 million people went to a gig or concert in 2023, with seven million people visiting London for music tourism alone. There are currently 46,500 professional musicians living in the UK, and nearly a quarter of a million people working in music-related jobs.

But live music in the UK is extremely varied. At one end of the spectrum, there are massive sold-out stadium tours from artists like Harry Styles, Oasis and Taylor Swift. These make millions of pounds for promoters, venues and booking agents, and they cause a sizeable economic – and even seismic – footprint.

At the other end, hundreds of small grassroots venues across the country are on their knees. According to the Music Venue Trust (MVT), a charity, an average of two independent music venues closed down each week in 2023. This was mostly due to rising running costs, shrinking audience numbers and licensing threats. The industry is a tale of rags as well as riches.

The winner takes it all

Thanks, in part, to the huge tours, Live Nation – a multinational entertainment company, which owns the sales platform Ticketmaster – saw revenues of $22.7 billion in 2023 (although many fans were unhappy with the platform’s ‘dynamic pricing’ system used for both the Oasis and Taylor Swift tours). For some, there really is no business like show business.

In aggregate, consumers spent £6.1 billion going to gigs, festivals and club nights in the UK last year – a 35% increase from pre-pandemic levels. This figure includes ticket sales and spending in and around the event. According to the National Arenas Association, a forum for managers of large venues, for every 10,000 people who attend a live music show, £1 million is spent in the area around the venue (on food and drink, transport, accommodation and so on).

Analysis by the House of Commons Culture, Media and Sport Committee indicates that the live music sector contributed £5.2 billion in gross value added (GVA, a measure of economic activity) in 2023.

Shutting up shop

At the same time, lower-capacity spaces are facing ‘a crisis of soaring costs and closures’ (House of Commons, 2024). According to research by LIVE (Live music Industry Venues and Entertainment), a federation of 15 industry associations, 125 grassroots venues shut their doors forever last year – a net decrease of 13% year-on-year. Of these, about half closed permanently as trading businesses, with the remainder ceasing to host live music. This represents a loss of 30,000 performances and 4,000 jobs.

These closures may seem a world away from sold-out arenas, but the two sides of this story are intrinsically linked. Without small venues, there would be no stadium tours.

For example, the band Coldplay’s first gig was at a poky Camden pub called the Laurel Tree in January 1998. Liam and Noel Gallagher of Oasis once played to a couple of hundred people at the Joiners in Southampton, with tickets costing just £3 on the door. And even international superstars like Taylor Swift had to build their UK fan base somewhere: her first show in England was in the students’ union bar at King’s College London back in 2009.

Humble roots can be found across the charts. As a result, protecting these smaller venue spaces is vital. Promoters working on arena shows should be deeply concerned about the current state of the grassroots scene. Policy-makers too should act urgently to support vulnerable parts of the industry.

These unassuming venues provide a vital setting for the ‘stars of tomorrow’ to cut their teeth. Without space to hone their craft, new artists will not emerge as easily or as frequently. And without a pipeline of exciting new performers, singers and bands, the future of the UK’s live music industry looks gloomy. This would be a devastating cultural as well as economic loss.

Music festivals are also struggling – last year, 36 events were cancelled. It’s a similar story for nightclubs: between 2021 and 2023, 184 clubs closed their doors for good.

This is part of a long-term downward trend. Since 2005, 70% of Britain’s late-night venues have shut up shop. Not only does this hurt electronic/dance music artists, but it also weakens the UK’s night-time economy – another cultural and economic asset that policy-makers should not allow to sink.

Why are venues struggling?

Inflation is squeezing smaller businesses hard, with energy, staffing and other business costs having ‘spiralled’ in recent months (House of Commons, 2024). Rent alone has increased by nearly 40% for some grassroots venues.

For example, the nightclub Heaven in Charing Cross is currently at risk of closing having seen its annual rent increase by £320,000. Similarly, the Moles club in Bath – which has hosted artists like Radiohead, Ed Sheeran and the Smiths – closed down just before Christmas last year, having been open since 1978.

Venues are also battling with shrinking demand, as concert-goers’ behaviour continues to change. Fans are increasingly choosing to go to a smaller number of large arena shows, rather than attending regular gigs at their local small or mid-capacity venue. Today, on average, punters are attending fewer musical performances compared with 2019.

This is partly a hangover from the Covid-19 pandemic. Audience survey data from May 2024 indicate that around one in ten 18-24-year-olds are finding reasons not to go out, with nearly 20% saying ‘they do not have enough energy’ (see Figure 1).

Many within this group would have been young teenagers during lockdown. The lack of social engagement during such a formative period of their lives may have helped to solidify these ‘post-lockdown habits’, dampening the overall appetite for live events such as gigs (LIVE, 2024).

Figure 1: Survey responses on attitudes towards attending live music (by age group)

Source: Live, 2024

Inflation has also shaped audience preferences. Over a quarter of survey respondents claim that ‘everything feels expensive’, with 20% saying they currently have less disposable income and need to cut back on luxuries. When the purse strings need tightening, a mid-week trip to see a new band play at the local pub could be one of the first things to go.

Many venues are also grappling with other economic and legal challenges. Hundreds of bars, clubs and pubs are embroiled in licensing battles with local authorities and residential developers. For example, the MOTH Club in East London is currently up against ‘a serious threat from a proposed block of flats’ across the road.

The typical story is as follows: a developer wins the rights to build a new housing project within earshot of a grassroots music venue; residents move in and quickly start complaining to the local authority about noise; the venue then loses its license or is forced to downscale its operations (by imposing an early curfew, for example); the music venue eventually closes down.

Increased running costs, smaller audiences and wider licensing threats represent a perfect storm for the grassroots music scene. To get an idea of the scale of the challenge, consider this: just 11 out of 34 of the venues Oasis played on their first UK tour in 1994 still exist today – 23 are gone forever.

The cost of touring crisis

Artists also face a difficult set of economic conditions. Three recent shocks have combined to create a ‘cost of touring crisis’: Brexit, Covid-19 and high inflation.

According to a report by UK Music, an umbrella organisation for the industry, artists’ costs have increased by an average of 35% due to higher energy prices and rising supply chain costs, many of which can be linked back to both Brexit and the pandemic.

Artists are feeling the effects of higher transport costs (such as fuel and train tickets), as well as surging energy costs. As a result, 57% of respondents to the UK Music survey report that it was not possible to take up the few European bookings they do get, due to increased touring expenses. One in three artists say it is now unprofitable even to sell merchandise (such as vinyls or t-shirts) at shows in the European Union (EU).

The pandemic exacerbated many costs due to surging energy costs. Thousands of gigs and concerts were postponed during 2020/21 and re-scheduled for 2022/23, but the price of these tickets had already been set when the concerts were first booked (pre-pandemic). Fast forward two years and running costs had increased dramatically, ‘squeezing margins’ for promoters and artists (UK Music, 2023).

Higher costs mean that touring may not be possible for many artists. Crucially, 43% of those hit by Brexit said it was no longer viable for them to tour EU countries. This has contributed to a 22% decline in aggregate EU earnings for British artists. This effect is particularly pronounced among up-and-coming artists – those earning £25,000 and under have lost almost half of their EU revenue.

Artists also face difficulties with securing visas and work permits. Almost 60% of respondents to the UK Music survey consider this a major barrier to playing in Europe. Other factors include the painful and time-consuming process of filling out ‘carnets’ – a post-Brexit customs requirement where artists must provide a detailed inventory of all their equipment (down to individual guitar cables, microphones and cymbal stands) when crossing into Europe to play a show.

These new administrative (and cost) burdens also reduce demand for British artists within the EU. Of the music creators affected by Brexit, 65% said they had received fewer invitations to perform in Europe since 2021.

In fact, the total number of British artists touring across the UK and abroad has fallen by 74% compared with pre-pandemic numbers. This is a staggering decline.

On both the demand (audiences) and supply (venues and artists) side, the grassroots live music industry is wheezing. While larger artists, promoters and venues can absorb the higher supply chain costs through increased ticket prices (including VIP offers) and lucrative sponsorship deals (Barclays bank sponsored Taylor Swift’s Eras tour), smaller-scale bands and venues do not have this luxury. Given that the grassroots scene provides the pipeline of talent for future arena tours, the lowest ebb of downturn could be yet to come.

What next for live music in the UK?

There are several policies that could help to improve the state of the UK live music industry.

First, an ‘arena levy’ could be introduced on live events over a certain capacity. A small fee would be added to the ticket price, which would be ringfenced to provide grants for smaller-scale venues (much like the redistribution of TV licensing revenue from the Premier League to grassroots football clubs).

Given that some fans paid £350 for unreserved standing tickets to see Oasis next summer, it seems unlikely that a relatively small additional charge on similar events would affect sales too adversely (this is what economists call inelastic demand).

In fact, a version of this model has already been tried and tested. Enter Shikari, an alternative rock band from St Albans, donated £1 from every ticket sold for their Wembley Arena show in February 2024 to the MVT’s pipeline investment fund (a pool of money available for capital spending and staff training for grassroots venues). The singer-songwriter Sam Fender announced last month that he is following suit, with another £1 levy scheme in support of the trust.

Similarly, Coldplay recently announced that they will donate 10% of the ticket revenues from their forthcoming London and Hull shows to the MVT. It seems that the Laurel Tree gig in 1998 hasn’t been forgotten.

Second, small venues could be given direct support via tax relief. The House of Commons Culture, Media and Sport Committee has called for ‘a targeted, temporary cut to VAT to stimulate grassroots music activity’. It argues that this will help the sector through the current ‘closure crisis’ and prevent further losses. The committee has also argued that the UK government should provide ‘certainty on the future of business rates relief’, to help grassroots venues to plan ahead.

Such a system is already in place in Europe, with VAT on gig tickets at 10% or below in countries like France, Germany and Italy (compared with 20% in Britain).

Third, venues need protecting from the threat of licensing battles. The UK government has already made some progress here, applying the ‘agent of change principle’ in the National Planning Policy Framework.

This means that developers are now responsible for protecting their future tenants from noise, rather than the burden being placed solely on the incumbent music venue. The Culture, Media and Sport Committee has called for this principle to be put on a statutory footing ‘at the earliest opportunity’.

Finally, urgent policy action is needed to address the erosion of ‘cultural exchange’ between the EU and the UK. Since Brexit, nearly half of UK musicians and music industry workers have had less work in the Europe. More than a quarter have had none at all.

Although the Labour government has pledged to improve relations with the EU to help Britain’s touring artists, as it stands, Brussels will not loosen post-Brexit curbs on travelling musicians from the UK. Negotiations should be re-opened to break this deadlock.

The UK’s live music industry is in urgent need of tailored support. Policy-makers should focus on redistribution from the ‘musical haves’ to the ‘musical have-nots’, and work to create better business conditions for emerging artists and grassroots venues through targeted tax relief, regulatory support and improved UK-EU relations.

Not only will this represent an investment in one of Britain’s most prominent cultural exports, but it will also provide a shot in the arm for many local economies. The new government has promised a ‘pro-growth agenda’: keeping the stage lights on should be part of this.

Where can I find out more?

• Grassroots music venues: Report from the House of Commons Culture, Media and Sport Committee, published May 2024.
• This is music 2023: Report by UK Music.
• LIVE Insights deep dive into audience trends: Results of a survey conducted by LIVE (Live music Industry, Venues and Entertainment).

Who are experts on this question?

• Peter Tschmuck
• Adam Sacks
• Hasan Bakshi
• Michael Waterson
• Ruth Towse

Author: Charlie Meyrick

Image: guruXOOX on iStock