To Brexit, or Not to Brexit: For the British Music Industry, There's Little Question

Brexit London 2016
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A leave supporter is seen as fishing boats campaigning for Brexit sail down the Thames through central London on June 15, 2016.

The industry shares its worries over visas, copyright, trade agreements and "neo-liberal market fundamentalism."

Two days from now, on June 23, the United Kingdom will hold a national referendum to decide whether or not it should remain part of the European Union. "Remain" campaigners, led by Prime Minister David Cameron, argue that staying part of the E.U. will strengthen and help grow the country's economy. The "exit" camp, led by former London mayor Boris Johnson, say that leaving will enable Britain to gain full control of its borders and reduce the number of migrants coming to the U.K.

For the music industry, the outcome of the national vote -- which polls suggest remains tightly split between those for and against a British exit, dubbed Brexit -- carries huge consequences and has the potential to impact on everything from touring to record sales to copyright legislation.

"A victory for Brexit would be economically, politically, socially and culturally disastrous -- for all of us," reads a joint letter from Beggars Group founder Martin Mills and Universal Music U.K. chairman and Chief Executive David Joseph, urging staff and colleagues to vote for staying in the E.U..

Their joint show of unity is echoed throughout the industry with a high number of British artists and executives pledging their support to the remain camp, including Johnny Marr, Bob Geldof, Paloma Faith, Jessie Ware, Jarvis Cocker, Alex Kapranos, Alt-J and Rough Trade founder Geoff Travis.

"I have a lot of misgivings about the way the E.U. is run, but they don't make me want to ditch the whole idea," said Brian Eno in a Facebook post earlier this week. "I feel the E.U. is one of the only restraints on the kind of neo-liberal market fundamentalism that has seen inequality rising throughout the world," he added.

A members' survey conducted by labels trade body BPI found that a two-thirds majority opposed Brexit on the grounds that going alone would carry grave consequences for the U.K. music biz. Trade bodies AIM, the British Academy of Songwriters, Composers and Authors (BASCA), Featured Artists Coalition (FAC), Music Managers Forum (MMF) and Musicians Union have also voiced their support for the U.K. remaining one of the E.U.'s 28 member states, alongside France, Germany, Sweden, Spain and the Netherlands.

"Like every other industry, we need a macro-economic environment with growth and with confidence, and the uncertainty around Brexit is not helpful to that," BPI chief executive Geoff Taylor tells Billboard. He says that one of the key concerns for British labels is that if Britain left the E.U., it would no longer benefit from the protection of the E.U.'s advanced copyright legislation, nor have a voice in the European Commission's review of copyright regulations, including safe harbour provision, as part of its ongoing plans to create a Digital Single Market throughout Europe.

"Those copyright rules have a huge impact on our business, and there is a very strong feeling among our members that the U.K. needs to be at the table to make sure that those rules are working in the interests of U.K. companies," explains Taylor.

In 2015, British artists accounted for more than a quarter (25.9 percent) or one in four of all the albums purchased across Europe, according to BPI data, and Taylor says that maintaining "fair and unimpeded access" to the continent is vital if the U.K. is to protect its share of the European market.

That view is shared by Drew Hill, managing director of the U.K's largest independent distributor Proper Music, who warns that Brexit would result in costly and time intensive "extra layers of administrative burden" for British labels, distributors and manufacturers looking to trade with European partners

"I don't think it would necessarily be a doomsday scenario, but it's definitely not going to make things easier," notes Hill, who says that the knock-on effects of more bureaucratic red tape would be "tighter margins for us and probably increased costs for our suppliers and for the record labels."

Hill also points to the impact that leaving the E.U. will have on Proper's staffing needs. Of its 120 warehouse workforce, he estimates that at least one third are European migrants due to a shortage of British applicants. "We would not be in the position that we're in today in terms of having a very buoyant business were it not for those migrant workers," states Hill.

"Adopting an isolationist position is a huge mistake," states Colin Lester, CEO of London-based management company JEM artists, which counts Craig David among its roster. "No system is ever perfect, but as the son of an immigrant whose father was taken in by this country and given opportunities to succeed, I instinctively feel we should vote to remain in," says Lester, who believes that leaving the E.U. will reduce Britain's standing on the world stage.

It's an opinion shared by numerous executives that Billboard spoke to. Don Jenkins, commercial director at London-based Raw Power calls support for Brexit "a vote for the most right wing conservative government in the history of this country."

He believes that if the U.K. quits the E.U., it will take up to 10 years for the country to negotiate comparable trade deals with key European markets and even longer with the U.S. "That means we have to pay extra tariffs on imports and exports, wrecking our trade for a decade," says Jenkins, who stresses that his personal views do not necessarily reflect those of Raw Power, which represents Bring Me The Horizon, Of Mice & Men, At The Drive-In and Funeral For A Friend.

Another area where Brexit carries potentially huge implications is the touring business. At present, British artists can freely travel and perform among E.U. member states. If the country votes to leave the European Union that will no longer be the case, raising the possibility of touring acts requiring separate working visas for each and every European country that they wished to visit.

"That's highly time-prohibitive and cost-prohibitive, and for new artists trying to break those territories, it might be the difference between being able to afford to tour or not," says Colin Schaverien of London-based Prolifica Management, which reps Two Door Cinema Club and Jamie N Commons. "Live is going to be hit hard, and there will definitely be an impact on smaller touring bands through extra red tape, which will be prohibitive on them actually going out obtaining tour support from labels." He draws parallels with the labyrinthine and costly procedure that British artists currently have to go through in order to get a U.S visa.

Also of concern for touring artists is the prospect of currency fluctuations. Economists disagree on whether Brexit might weaken the euro, but there is a risk that sterling could drop by as much as 20 per cent, according to estimates by investment bank Goldman Sachs.

"If you've already contracted the majority of your touring costs in sterling that's going to leave a massive hole," says Schaverien.

Any restrictions on European touring would additionally impact on major label budgets, notes BPI's Taylor. "It may be more difficult to make the case within a large multinational for a large A&R budget to be given to the U.K. if we face barriers in taking our artists overseas," he says.

Other possible ramifications of Brexit could be increased costs to chartering flights in and out of the U.K. and tighter border controls that would slow down crew and freight travel for international tours already working to tight schedules. There is also the unlikely, but not impossible, chance of cultural quotas being introduced; restricting retail shelf space and radio play for British artists in E.U. member states.

Despite these fears, not everyone in the music biz favours staying in the E.U., with nearly 20 percent of U.K. label staff surveyed by BPI responding they are pro-Brexit. A strong argument for leaving is that, like the U.S., an independent U.K. would be able to set its own laws regarding the movement of people, goods and services, as well as implement its own laws governing copyright. Supporters of the leave campaign reason that, free from E.U. red tape and Brussels' slow-moving bureaucracy, the British government would be able to act more quickly and decisively than it is currently able.

The fact that the U.K. music business has long enjoyed healthy trade with non-E.U. countries like the U.S., Japan and Australia, with British artists claiming one in every six albums sold worldwide in 2015, adds credence to Brexit claims that leaving the E.U. would not irrevocably damage the country's economy or the U.K. music business.

"The British music industry will survive either way, and it has a great record of adapting to whatever environment it finds itself in," says Taylor, who disagrees with that view. "We believe our future looks brighter remaining within the European Union, rather than outside it."