The music industry does the math and gets worse. At least, that is the content of the report that they have sent to the Minister of Culture, José Manuel Rodríguez Uribes, given the current situation of alert for the Coronavirus. The sector watches with concern as the high season of live music approaches as the health crisis does not ease. To the cascade of cancellations of concerts have been added some postponements of festivals due to the short-term uncertainty, but the worst, as in the epidemic issue, could be yet to come. According to the aforementioned report, the music sector plans event cancellations until September, which would take the most important dates of the calendar ahead. Millionaire macro events and cycles that last for several weeks are at risk, in addition to the suffocation that could occur in concert halls throughout Spain. Direct losses, as transmitted by the live music sector to the Government, would amount to 622 million euros.
According to the report in the hands of Rodríguez Uribes, the forecast for the billing of live music between the months of March to September 2020 amounted to 471 million euros. Of this amount, most of it comes from the box office (65% of the total), and the rest of those derived from sponsorships, public aid, hospitality sales and merchandising. In the case of concert halls, the expected losses in the period March-September 2020 are 103.2 million euros. Lastly, they account for the suspension of events promoted by public entities, such as patron saint festivals, and other small-format events with an impact amounting to 88 million euros.
However, the effects would be greater than those 622 million, because the stoppage of an industry always generates a chain reaction. The live music sector employs 300,000 people in Spain and the impact of its activity amounted to 5,600 million in 2018 after growing 14 percent over the previous year. For this exercise, more propitious for the improvement of the economy (it was so until Covid-19), a growth of 20 percent was expected, with which its influence on Spanish activity would amount to 7,660 million. According to data from the sector, the months of March to September represent 58 percent of average income. Therefore, the Spanish economy would stop moving more than 4,443 million. According to data from the Asociación de Promotores Musicales (APM), which is trying to prepare a census of music festivals that has not yet ended, in Spain more than 1,000 events of this type are held.
Also authors and producers
For its part, the Music Federation in Spain reminds that there are many groups affected by this situation. Authors, artists, performers, promoters, organizers, managers, concert halls, record labels, publishers, rights entities, and specialized technicians from the music sector dedicated to production, logistics services, “marketing”, “ticketing”, transportation , technical means, are only some of the disadvantaged. Along these lines, the current crisis will also have an effect on recorded music, publishers and rights management entities. The closure not only of concerts, but of stores and public establishments that program recorded music will have an impact on the income of authors, artists, producers and publishers. The stoppage of new record releases will result in this bad trend.
Around this industry there is also a huge temporary job bank, which is sometimes only activated for a few days, but which forms a fabric in locations outside the big cities that host events during the summer, such as the province of Castellón. , that of Burgos and towns such as Benidorm that receives several festivals in summer. While multinational companies will be able to better overcome this crisis, local or national companies will be the most affected. “This is going to question the very survival of the sector,” said the Spanish Music Federation at the beginning of the viral crisis.
At the moment, big millionaire budget events such as Primavera Sound, BBK Live, Mad Cool or the Benicàssim Festival prefer to keep the event on schedule. They launch messages appealing to the responsibility to contain the epidemic and “save the summer.” The first on the calendar, the Barcelona festival, has revealed that it “explores” possibilities to postpone its start for a few weeks, but the enormous logistical complexity of putting together a poster with more than 200 artists is evident. Cruïlla, also in the Catalan capital, said yesterday that “it does not contemplate a postponement.” Others, such as the WarmUp in Murcia, the San San de Benicàssim or the Viña Rock in Villarobledo (Albacete) have already sought new dates in October, the month in which it could occur an oversupply of events. Also long and diverse cycles, such as the Botanical Gardens, Cap Roig or the Jardins de Pedralbes, are a machinery of employment and economic activity for several weeks that are threatened.
Consequences and measures
“Given the strong impact it is having on demand, we see that it will not recover until the second part of next year 2021 as long as the effects of the Coronavirus on our economy and on our society are mitigated,” assure sources in the sector. “We estimate that, based on the support measures that the Government of Spain formulates, the recovery of the music industry in our country will begin at the end of 2022 and may be consolidated throughout 2023.”
Among the urgent measures that the sector is demanding from the Government is the implementation of ICO credit lines to help finance companies in trouble and the postponement of VAT, Personal Income Tax and IRNR (Non-Resident Income). Likewise, they demand a reduction in VAT from 10 to 4% of tickets to all musical events and a reduction of 21 to 10% in VAT on all services related to live music. They also ask for the reduction of corporate tax for two years and that some alternative consumer compensation mechanism be enabled to return tickets for the cancellation of events affected by the Coronavirus crisis. In this regard, it also requests that the possibility of an official declaration of force majeure to facilitate the postponement of concerts and music festivals that need it due to the special characteristics of these events be studied.
As for the measures for the future after the health care, as ways of “reviving the industry”, they propose several ways of state subsidies. On the one hand, one direct to the entry amounts, so that the organizer could reduce the box office price, and the other to the production of recorded music. Finally, they demand an increase in contracting by Public Entities, with advance payment or immediately after the celebration. The duration of this emergency will depend on whether or not the summer can be saved.