Tony Wadsworth, BPI Chairman
Speech to BPI AGM, 9th July 2008
Music Affects
It’s a good thing now and again to review the way you work, the way you spend your time on certain things as opposed to others, and it was with this in mind that I started thinking the other day about what I am doing at the BPI.
I have been on the Council now for over ten years, and most recently I have held the post of chairman - so it started me thinking - why do I do this?
Why do any of the Council members, and the many others in the industry who sit on the various BPI committees - PR, finance, government relations, anti-piracy, BRITs and the Independents Committee etc devote a substantial portion of their time, attending the meetings, making the calls, reading the often copious briefing papers; they all have their own busy jobs to do in their own companies big and small - they can barely afford the time; but they give it readily and enthusiastically.
Is it why any of us got into this business? I started working in the music industry straight out of university - why? Because music was and still is my passion - my earliest childhood memories all seem to come with the soundtrack of a Beatles song or a Motown classic.
As soon as I had developed sufficient persuasive powers, I cajoled my parents into buying me a guitar.
As I got older I attended gigs at the local polytechnic (cider 10 pence a pint), and later still, my time at University was probably best remembered through seeing gigs by Ian Dury, Elvis Costello ,the Ramones and The Clash, rather than through the finer points of macro economics.
What I'm trying to say is that I got into this industry because of music and the profound effect it has, not just on me, but on almost everyone in the world at one time or another. Music can be a force for good (as we have heard today from Nick Williams), a force for change, (such as the environmental leadership of Julies Bicycle), a source of joy, or a source of comfort at times of sadness - it can be enjoyed actively or passively, alone or in groups; what other industry can say all those things about their so called product?
In the UK it happens to be something we are good at - the UK is the second biggest exporter of music in the world - some of the most legendary names in music are British; and still today the impact of UK music around the world is significant.
The year 2007 was the 3rd consecutive year of growth for market share of UK music in America, the world biggest music market, thanks to the performance of albums by legends such as the Beatles, the Stones, Elton John, and Pink Floyd, etc - but the most encouraging thing is that the two BEST selling UK albums in the US in 2007 were by new young artists Amy Winehouse and Corinne Bailey Rae.
So UK music doesn't rest on its laurels, and 2008 is shaping up for another bumper year in the US with amazing performances of albums by Leona Lewis, Radiohead and of course Coldplay.
In my opinion, our music is in rude health - the sheer variety of music on offer to UK consumers currently is mind boggling – 32,000 new album releases were made available in the UK last year - almost twice the number of a decade earlier; the number of festivals featuring acts of wide ranging music styles that fill every weekend of the British summer, are testament to that.
And despite our current issues with optimising the value derived from that music, UK consumers are still spending more per head on music than in any other major market in the world. The importance of international income from sales of UK music in the states and elsewhere cannot be overstated - the UK music business economy is as important as it is because we can sell our music overseas in large quantities, attracting significant license income.
Which enables the record labels to invest in new music. Without that international presence, there is no way that we could invest at the level that we do. The industry ploughs 17% of its top line income into new music - a research and development ratio on a par with the pharmaceutical industry.
But international income isn't the only source of license income generated by today's record labels. In my speech last year at this event, I talked about how our business model was shifting from a retail sales transaction model, to a usage model, which attracts increased amounts of licensing income from business partners who want to use music to help drive their own businesses - TV, movies, computer games, etc.
And as Geoff said earlier, the BPI published numbers which indicated that those income streams had increased by 14 % year on year, at a time when other revenue streams are under threat. This statistic alone indicates how labels are transforming themselves and their businesses. All of this business is driven by the music - the quality of UK music is the reason we have such a vibrant and successful industry.
Great music is the single most important factor to the success of our business. BUT - great music doesn't flourish as well as it could if the legal and business environment isn't conducive - and that's where the BPI has a role to play.
The BPI's role is to help provide the right environment for creativity to flourish - to protect the rights of anyone involved in the production and sale of music. And sometimes that means getting tough; sometimes it means making yourself unpopular - but if it’s a fight you believe in then none of that matters.
One of the biggest issues that the BPI is currently in the midst of dealing with is that of our relationship with internet service providers or ISPs. ISP profits have grown due to their customers being able to share valuable creative content for free on their networks, without them having to share a penny of their subscription with anybody - neither the artists or the producers.
This is an issue that isn't unique to music - it affects other industries such as TV, movies, news services and games. The creative industries, particularly music have been criticised for being slow off the mark in developing new businesses online.
But the internet is awash with unauthorised free content. How in all honesty, can you successfully monetise online music businesses when illegal file sharing is still allowed to flourish?
Governments around the World, including the UK are now starting to address this problem in a variety of ways, as they realise it is crippling their creative industries.
And it’s right that a government should intervene to protect its cultural assets.
Some of the so called liberals of the online world - sometimes referred to as 'freetards' - see the intervention of governments and the introduction in some countries, of legislation as an assault on our freedoms - but I say it’s nothing of the sort... It is nothing less than a fight for creativity - a market place for music which generates no income will not continue to produce cultural excellence.
Why should people who work in the creative industries be expected to be able to produce their best work, purely for the love of it?
It doesn't apply to other industries, and it shouldn't apply to ours. I got into this business for the love of music - I didn't expect to be spending my time lobbying government, tackling copyright infringers, fighting huge telecommunication companies, or persuading the public that musicians, producers and record companies would like to be paid for our work - just like everybody else in society; that wasn't why I came into the business, but I am of the clear opinion that this work has to be done to sustain a business environment in the UK where we continue to produce some of the most creative and successful music in the world.
The BPI, and many other organisations in the music sector are there to fight on behalf of our industry, and I feel proud to be part of that fight, because I believe we are an industry that is worth fighting for - and I hope very much that you do too.
Thank you for attending the BPI AGM and I hope to see you all again next year.