EY study: Covid-19 will cost French music sector €4.5bn in lost revenues in 2020

By Emmanuel Legrand

The French music sector has estimated that the Covid-19 crisis will result in €4.5 billion in lost revenues in 2020, down 43% on the €10.2bn it was planning to generate during the year, according to a study commissioned by cross-industry organisation TPLM to EY.

  The study found that core music businesses will lose some €3bn, while associated businesses such as retail and digital distribution, instrument manufacturing and sale of audio material will suffer a €1.5bn loss in 2020.

  The breakdown for the main core sub-sectors is the following: 
  • €2.3bn for the pop live music sector, down 83% on projected turnover in 2020; 
  • €384m for the classical live music sector; 
  • €250m in music copyright shortfall, down 23% on forecast revenue; 
  • €239m in revenue losses for the recorded music sector; 
  • €134m in losses from export revenues; 
  • €46.8m in losses for performers from royalties, private copying and equitable remuneration.

Music pays a heavy price

  "We can confirm that, unfortunately, the music sector as a whole will pay a very heavy economic price, from authors to the live sector, including publishers, producers, instrument manufacturers, broadcasters, distributors," explained EY's Marc Lhermitte and Hugo Alvarez, the authors of the study.

  To respond to the urgent needs of the music sector, TPLM has unveiled a list of 10 proposals that it hopes will be implemented by the government and policy-makers in order to "protect creators, support the structures and businesses that accompany them, and save the 257,000 jobs that keep music alive."

10 measure to keep the sector alive

They include: 
  • Live sector: Bring more clarity and timing in the ways concert venues and festivals will be able to resume operations and develop "specific public aid" to compensate for the additional costs and loss of income "linked to the sanitary measures that will be imposed on concert venues and events.” 
  • Implement social and fiscal support adapted to the scale of the crisis. 
  • Ensure that all the support schemes and subsidies are “examined, voted, validated and paid as quickly as possible.” 
  • Renew in 2021 the measure allowing collective management organisations to devote part of the 25% from the revenues from private copying to emergency measures. 
  • Open discussions between representatives of venue owners and operators of venues on rents relating to the time during which concerts were not possible. 
  • Organise a conference with all stakeholders, in particular the government, to agree on a multi-year policy plan for reviving the sector, “endowed with resources corresponding to the scale of the destruction of value at work since mid-March.” 
  • Ensure that the National Music Centre (CNM) benefits from new, significant and long-lasting fiscal resources. 
  • Transpose “as soon as possible the three European directives adopted in Brussels in 2019 (copyright,cable-satellite and audiovisual media services). 
  • Urge radios stations, television channels, digital platforms and businesses using music to broadcast and programme as much French production as possible. 
  • Adopt measures to support the demand for cultural goods produced in France.

Create conditions for the recovery

  “Our 10 proposals aim to respond to the urgency of a greatly weakened sector, on the one hand, and, on the other hand, to create the conditions for recovery,” explained TPLM President Jean-Christophe Bourgeois (pictured, below). “This is essential to support the sector over time. The urgency is, first of all, to put in place specific aid measures for the performing arts which are fighting for their survival, and to extend the systems put in place at the heart of the pandemic, the removal of which could be the final blow for already weakened companies."

  Bourgeois continued: "We need also to preserve the company's cashflow, in particular by strengthening the existing tax credits and by creating the tax credit that music publishers have been asking for for years. Finally, we need to ensure that unemployment benefits for intermittent workers in the creative sector plays its full role so that creators can be protected."