Funding of Music Business in the UK - Essay Example

Finding funds to run a music business funding is daunting. As is the case for other businesses, one would expect the immediate source of finance to be credit from financial institutions. However, in his research, Wilson (2001) found that the overall share of bank finance used by music businesses was significantly lower than the average for other small businesses in general. Within the same study Wilson (2001) found evidence that the classical music genre had a higher share of the bank finance in comparison to non-classical music. In this report our primary concern shall be to unearth other sources of funding for music businesses other than that which is offered by financial institutions. Funding for music comes in various shades and forms. It could be in the form of grants, education scholarships, competitions, free music promotion, recording contracts, and instrument and equipment funding. We could categorise the different types of music business funding based on by source of funds, geographical region where fund can be used and so on. In this paper we shall restrict the discussion to the different sources of funding for music businesses available to persons living within the UK. Towards the end of the paper we shall place an emphasis on funding for pop and rock music. Starting with sources of public funding, there are three main government funded bodies that offer funding for music in England. These are the Arts Council England, the British Council and UK Trade and Investment (UKTI). Local counties also offer funding in form of small grants to artists who reside within those counties. With internationalism and globalisation being the drivers of modern economy the three bodies have also taken steps to strengthen the British music brand internationally. Arts Council England provides grants to a diverse genre of music therefore competition is definitely high and success is generally determined by the artistic quality of the applicant’s work (Artistic Assessment n.d.). The Arts Council’s Grants for the Arts is open to any UK citizen or EU citizen so long as the majority of the funded activity takes place within England. However, up to 15% of any grant given could be spent on activities outside England (Artistic Assessment n.d.). The Arts Council also has an investment portfolio for music that includes more than 134 regularly funded organisations. The total financial support given to these organisations in 2008/09 was £98 million, an amount that was to rise to £104 million by 2010/11. This portfolio comprises of: ensemble-based organizations, British Underground and Jazz Services, performance and education-focused organisations, e.g. the Asian Music Circuit, and sponsoring major music venues such as Aldeburgh and The Sage (Artistic Assessment n.d.). The majority of these regularly funded organisations are geared towards aiding emerging artists and labels access the international music industry. The British Council is an independent charitable body which develops and delivers educational and cultural programmes that respond to British government’s priorities as well as the need and demands of the overseas communities in which it operates. It is not a funding body per se. As stated above, the British Council offers support to art that is likely to contribute to the development of cultural relations between the UK and the rest of the world (Music Support and Funding n.d.). Private organisations have also seen the need to invest in music businesses by providing grants, scholarships and running music talent competitions that offers substantial cash prizes and often with recording contracts as well. The EMI Music Sound Foundation was set up by EMI Records a world leader in music companies to increase access to music by awarding bursaries and grants to individuals or schools for the acquisition of instruments and music making equipment, studies into the history of music and research in sound reproduction (EMI Music Sound Foundation n.d.). Another major private organisation that is a big player in the UK is the Performing Rights Society Foundation (PRSF) which to date boasts the status of being the UKs leading organisation that funds new music regardless of genre. The PRSF has been known to support everything from unsigned band showcases, to residencies for music creators, to live concerts. PRSF provides essential core support for producers, performers and creators of new music. The organisation runs this through a variety of funds. PRSF offers composer bursaries aimed at composers, financing of emerging UK artists that have been selected for important overseas showcasing opportunities, funding for performance groups, assisting with financing of festivals and supporting UK based music creators to encourage innovation (PRSF funding schemes 2010). PRSF also runs a New Music Award which is open to all genres of music and performed by anyone. The award encourages creators to push the boundaries of their artistic abilities so as to extend the possibilities of music regardless of the genre. The New Music Award also seeks to expose the UK’s most innovative music creators in the media which is important in securing for the artists the necessary public profile they deserve alongside the UK’s better known creators working in visual arts and/or media (PRSF funding schemes 2010). BBC is a public corporation that also regularly offers funding through many schemes throughout the year under its Performing Arts Fund. Anytime a scheme is launched it is announced online and on the fund’s social networking addresses. The schemes that BBC’s Performing Arts Fund runs fall under the following major categories: education bursaries, grants for instruments and equipment, urban music talent, training in musical theatre and choral ambition (BBC Performing Arts Fund n.d.). Within continental Europe the focus is not geared toward funding per se rather it is towards promoting cultural diversity through encouraging of musical cooperation projects, artists’ mobility and music diversity (The European Music Office (EMO) n.d.). Other regional bodies such as the European network of National Cultural Agencies (EUNIC) have also aligned their missions and visions on using the entire realm of art as a means to promote intercultural dialogue and cultural diplomacy. It is therefore difficult to obtain funding especially for individuals from these international organizations. The key to finding music funding, however, is not totally dependent on the availability of funding organizations. The first step that an artist must undertake before seeking funding is to figure out how much of funding is required. By understanding one’s costs the artist is better able to utilize the funds when he/she receives them. Good accountability attracts even more funding at a later date. Secondly, the artist needs to ensure that he/she approaches the funding organization with a workable business plan. This shows that thought and action have been put into the music business. Finally, a thorough research into the available sources of funding would be required e.g. is it instruments and music making equipments that you need or is it music of your promotion that you seek? As we have seen above different organization offer different forms of funding. For an artist who composes records and performs rock and /or pop music, the following sources of funding are available. The BBC Performing Arts Fund Urban Music Talent scheme is for emerging urban music artists, managers, producers and so on aged between 18 – 30 years. The scheme provides the artist with advice, contacts, a business mentor, training and working capital (BBC Performing Arts Fund n.d.). Individuals receive up to £10,000. Another possible option is the Musicians Benevolent Fund which assists musicians, of all ages and genres, who create, play or teach music. Membership to the organization is not mandatory for qualification for assistance. Musicians Benevolent Fund’s strength are with regards to helping young artists search for relevant award schemes for their music, they offer their own awards and provide opportunities for networking e.g. performing at events organized by Making Music members (Young Artists n.d.). Unions are a viable way of building networks among peers through membership. This implies that joining the Musicians Union is also viewed as means for obtaining funding for the music business. Funding need not necessarily be in cash it could be in the form of provision of contract advisory services, provision of instrument protection kits and opportunities for lifelong learning e.g. the Musician’s Union has its own industry specific training modules etc. A newer method of seeking funding that is gaining popularity especially for popular genres of music such as pop and rock is through fan-funding and/or donation sites. A growing number of musicians seek the support of their fans by asking them to contribute towards the costs of an upcoming album. This is easily done in cyberspace by developing a widget in your website probably near the button that activates free downloads. Proponents for fan-finding state that it has greater benefits because it ensures that the music you produce I paid for in advance by your fans and investors. The shifting of the cost of production to the fans eliminates the risk of financing music whose sales may flop upon release. Secondly, fan-funding also prevents file-sharing and copyright infringement because fans that have spent their money for the production of an album are unlikely to go searching for it on file-sharing networks. In conclusion, we do admit that finding funds especially to finance a music business is a daunting challenge. Most of the non-credit based funding available is in the form of Music Awards that are highly competitive. The new business model of fan-funding is by far the most attractive option for upcoming artists because it not only aids with production costs but also it gauges the popularity and likelihood of success of an emerging artist’s music. References Artistic Assessment n.d., Arts Council England, viewed 14 June 2010 BBC Performing Arts Fund n.d., BBC, viewed 14 June 2010 EMI Music Sound Foundation n.d., EMI Music Sound Foundation, viewed 14 June 2010 Music Support and Funding n.d., British Council, viewed 14 June 2010 PRSF funding schemes 2010, PRS for Music Foundation, viewed 14 June 2010 The European Music Office (EMO) n.d., The European Music Office (EMO), viewed 14 June 2010 Wilson, N 2001, ‘Financing small music businesses in the UK’, Cultural Trends, vol. 11, no. 41, pp. 93 – 122.   Young Artists n.d., Musicians Benevolent Fund, viewed 14 June 2010 Read More