Posted: 09 July 2007 11:14

Strengths and Weaknesses

I’d like to start with a prediction. I predict that there will always be great music made and played in the West Midlands. As for the West Midlands music industry… What music industry? With some notable exceptions in terms of organisational potential and best practice it would appear to me that the West Midlands does not currently have the core elements of a ’music industry’.

In order to explain this shortfall – if that’s what it is, after all we do significantly contribute to what is in relative terms a small yet musically unparalleled country - and try to identify the necessary steps in establishing a regional music industry, I’d first like to ask what it is we mean by ’industry’, what qualifies a region to ownership of such a thing… Ozzy, Slade, Duran Duran, Joan Armatrading, Dexys Midnight Runners? Do they really deliver local value, are they strengths or do they expose a regional weakness in capitalising upon and retaining ownership of the very cultural identity that made them great?

Whilst these icons of rock and pop hail from our beloved county it is worth noting where the revenue from their multi-platinum selling records is generated from, and perhaps more interestingly where it goes and how it gets there:

Sales – global consumer retail enabled through London based distributors. Unsurprisingly the aforementioned acts all sold well in the West Midlands. So there is a regional injection of revenue into the industry.

Distribution – typically, even in the online domain, over 30% of a musical products retail value is taken by distribution companies based outside the West Midlands.

Royalties – collected by international collection societies and paid to publishers, again typically based outside the region. Mechanical royalties, paid on sales as opposed to airplay, are usually paid by the record label (which may be Midlands based), on manufacture of product in the case of smaller labels, and on net sales in the case of larger, usually London based labels. Performance royalties, paid by broadcasters and venues are also collected and paid to the publishers. The publishers recoup their costs, take their cut and then account to the contributing artists involved… who, sadly, rarely remain in the West Midlands.

I hope you can see a pattern emerging here. As a region we are spending significantly more on music than we recoup.

There is some small hope for regional labels in the form of Phonographic Performance Ltd, who pay the labels for the use of their recordings from broadcasting revenue. This money is gathered from license fees levied by PPL on the broadcasters in accordance with their member labels collective instruction. The money is distributed to the labels pro-rata by most played title. The most played titles are of course owned by major records companies who, coincidently, often own distribution and publishing subsidiaries! So why, as a region, can the West Midlands not establish this music industry infrastructure?

If we consider manufacturing, motoring or many other traditional production based sectors, we, the great West Midlands could perhaps lay claim to a set of unique social and economic circumstances that have embossed a profound and sustained accent on those industries’ economic history. ’Made in Birmingham’ may have been an enduring moniker added at the end of production lines, and of course bottles of the staple ingredient to any true English mans diet, HP Brown Sauce, boasted its origins with an image of the Aston based factory on its labels. At one time we capitalised on our market position. We became the engine room of the industrial revolution. Simply being central to the country made the West Midlands a booming stronghold for the production of products that were needed in both the North and South, domestically and beyond our shores. Of course the modern music industry recognises no such regional benefits in terms of its supply chain. It is entrenched in a new revolution, a digital revolution. As such we in the West Midlands have little to capitalise upon but our wits, in an open and globalized marketplace where intellectual property is the product and access to it the currency.

Best Practice

Of course there are exceptions that set admirable standards of commercial success combining regional empowerment. UB40’s DEP International headquarters added a cultural icon to the cities east side in the form of its studio and management building. The band formed DEP to retain control of their records. In so doing they did of course inevitably sign on several dotted lines in contracts from non Brummie organisations. None the less UB40 embraced the music industries value chain engaging in publishing and distribution activity that earned additional revenue enabling a degree of sustained investment in the region and its creative economy.

The seemingly fortuitous success of Lemington Spa’s acoustic folk combo, Nizlopi, is perhaps another testament to the value of participation in the regional music market beyond simply being based here. The band, their home based label come management and production company, FDM Records, their friends… and their friends… all combined to orchestrate a viral marketing campaign that would rival that of any London based music PR company or major labels marketing department. The release of the quirky animated video to the ’JCB Song’ set a precedent in how open file sharing across the Internet could raise awareness of a talent, not only to chart breaking point but famously (at least in these parts) to No. 1.

Perhaps if Nizlopi had signed to the likes of DEP International we would have the somewhat generically disjointed roots of a regional music economic infrastructure, or even, dare we even imagine… an industry!

Regional Development

So then, we return to the crystal ball. What is the future for music in the West Midlands? What must we put in place to engage with the many and varied revenue streams of creativity and its exploitation? What must we do to channel the money home? Is an egomaniac entrepreneur needed? Should the state sponsor endless creative initiatives to get our talent "out there"? How do we redeem ourselves and win through as a true music industry hub?

In my opinion to address these questions comprehensively requires the formulation of a regional business model, including input from our entrepreneurs and the experience, considerable marketing power and political reach of our regional development agencies. We are in deed, as once before, well placed to capitalise on our market position as circumstance has granted us both these breeds in abundance. If we take the initiative, combined with one of the worlds most diverse and worldly wise cultural communities we surley could not fail to become recognised as a market leading force. The time is now and the establishment of a regional commercially focused music industry infra structure is due.

Traditional manufacturing should not be our focus. It is a labour intensive low margin business that involves little actual creativity. Our international neighbours are far more economically suited to supply the slowly decreasing yet still predominant demand for physical musical products.

Distribution is key... Routes to global retail through international brands, from the high street to iTunes and increasingly direct to consumer, from the canals through which the revenue flows. Regional distributors however are few and far between and regional market expertise is limited. A programme specifically to establish, support and accelerate a regional cluster of music distributors would tick one of the core boxes in addressing the regions music revenue deficit.

In order to further penetrate the music value chain I believe is it essential that the West Midlands create a regional collection society or regionally focused music publishing entity. The management of our rights and associated revenues depends upon blossoming relationships with those to whom we license them… Why should artists hang around if their money is tied up elsewhere? As we distribute and drive export of music internationally it is necessary to claim both mechanical and performance royalties from the established collection agencies not just in the UK, but in the rest of the world. We need to foster these relationships locally in order to channel revenue locally. Publishing is an area where UK Trade and Industry development agencies and the Chamber of Commerce could potentially be of exceptional value through the facilitation of international relationships. I am a firm advocate of trade not aid but believe a public private venture in this area may prove cost effective in delivering regional long term economic growth.

On a concluding note marketing Birmingham and its potential as a creative hub can only reach so far when all the activity is in and focused on the physical Birmingham. The city’s creative assets far exceed the sum of its physical parts. Providing we build the necessary infra structure, content from the West Midlands can be represented, championed globally and revenue returned through the extension of our collective brand in the commercial hubs of the worlds sub continents. Though we have had regional representation at the Midem world music industry trade fair, in form the of ’British Midlands at Midem’, this is not enough. Permanent representation in the major international music markets to drive promotion and content licensing, again possibly publicly funded, might be a feasible direct initiative that would increase our regional turnover.

Additionally the inclusion of international creative output at our regional showcase events is sadly lacking. It sometimes feels as though we are scared of engaging with or, god forbid, profiting from anything that is not home grown. With the establishment of core industry competencies based in the region we could offer not only a world stage but an inclusive and unparalleled entertainment retail, marketing and rights management opportunity attracting outward investment, much as our international competitors, major record companies and most recently global technology providers are striving to achieve and maintain. Having been instrumental in the establishment a market leading Birmingham based music service provider business, I firmly believe that economic growth driven by music in the West Midlands depends on the establishment and sustained development of regional music businesses that are not introverted, but engage with the industry and proudly capitalise its many and varied creative accents.

The Author

Starting as writer/producer for dance outfit Hardcore Uproar, Chris Thompson, originally from Blackburn, Lancashire, moved to Birmingham in 1997 after graduating from the University of Westminster, BA(hons.) in Commercial Music. Chris worked in corporate communications sales for Cable & Wireless and United Utilities before returning to music in 2004 to set up D A Recordings Ltd with partner Ann-Marie Taggart.

Posted by: Christoph    

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