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CMS calls for ticket levy for grassroots venues

The Culture, Media and Sport (CMS) Committee has backed calls for a new arena and stadium ticket levy, plus tax relief, to safeguard UK’s grassroots music venues (GMVs).

The recommendations feature in a new report from the cross-party committee, which launched the inquiry at the Music Venue Trust’s (MVT) Venues Day in October 2023 and heard about the “cost of touring crisis” facing the sector, against a backdrop of small venues closing at a rate of two per week.

It says that a voluntary levy on arena and stadium concert tickets – as lobbied for by the MVT – would be the most feasible way to have an immediate impact on the business, creating a support fund for venues, artists and promoters, administered by a trust led by a sector umbrella body, and is appealing for the industry to ensure the levy cost is not passed on to music fans. In addition, it is calling for a temporary VAT cut based on venue capacity.

The conclusions have been warmly welcomed by bodies including the MVT, along with trade bodies LIVE (Live music Industry Venues & Entertainment), UK Music, the Music Managers Forum (MMF) and Featured Artists Coalition (FAC).

“These recommendations provide a clear pathway forward to a positive future for the UK’s grassroots music venues, a set of actions that are deliverable, affordable, and will genuinely have a positive impact on live music in communities right across the country,” says MVT CEO Mark Davyd. “We look forward to working with the music industry and with the government to deliver on these recommendations as swiftly as possible.”

Davyd owns Tunbridge Wells Forum in Kent, which recently pledged to become the first venue in the UK to introduce a grassroots ticket levy. Throughout this month, £1 from every ticket sold will be donated to the Music Venue Trust’s (MVT) Pipeline Fund at no additional expense to customers.

The MVT has described 2023 as the most challenging year for the sector since the trust was founded in 2014, as the number of GMVs falling from 960 to 835.

“It’s clear that the committee has recognised the many challenges faced by venues, promoters, events and artists at the grassroots level, and the steps required to address them”

“We would like to thank all the thousands of music fans that have supported our work across the last 10 years,” adds Davyd. “It has taken much longer than any of us would have liked to get the positive change we all wanted to see, but we could not have achieved this fantastic outcome without your continued support for your local live music venue.”

If there is no agreement by September, or if it fails to collect enough income to support the sector, the report says the government should step in an introduce a statutory levy.

“It’s clear that the committee has recognised the many challenges faced by venues, promoters, events and artists at the grassroots level, and the steps required to address them,” says LIVE CEO Jon Collins. “LIVE set out to the committee the actions we believe that the government needs to take to help unleash the economic potential of the sector, such as a reduction in the damaging and uncompetitive rate of VAT on tickets, as well as the actions that sit with us as an industry, notably the creation of a charitable arm, the LIVE Trust.

“We are pleased that the committee’s report addresses both of these matters positively and has entrusted our sector to implement the industry-led solution of a voluntary levy on arena and stadium tickets, gathering and distributing funding that will benefit the whole grassroots music ecosystem. We look forward to working with government on the review of VAT and regularly updating on our progress on the LIVE Trust.”

“Grassroots music venues are a crucial part of the music industry’s ecosystem and have been faced with a series of unprecedented threats for a number of years,” adds UK Music interim chief executive Tom Kiehl. “We welcome the House of Commons CMS Committee taking the opportunity to consider the challenges these venues and the artists that tour in them face.”

Artists and managers previously spoke out in favour of the MVT’s calls for a compulsory £1 levy on tickets sold for UK live music events above 5,000-cap during evidence sessions held in March.

“As the organisations representing artists and managers, we wholeheartedly endorse all the committee’s recommendations,” says a joint statement by FAC CEO David Martin and MMF chief executive Annabella Coldrick. “Most important is their recognition of the ‘cost of touring crisis’, and that the benefits of a ticket levy must flow down to artists, managers, and independent promoters – as well as to grassroots music venues. The entire ecosystem needs support. While we still believe this mechanism should be mandatory, the clock is now ticking to get a process in place before September 2024.”

“The ongoing wave of closures is not just a disaster for music, performers and supporters in local communities up and down the country, but also puts at risk the entire live music ecosystem”

Among the report’s other recommendations are for the government and Arts Council to make it easier for the live music sector to apply for public funding and for stakeholders across the industry to continue to support the FAC’s campaign to end punitive fees on artists’ merchandise.

“We are also delighted to see the committee endorse the 100% Venues campaign, and hope this will trigger action from the UK’s largest live music venues to overhaul outdated practices on merchandise commissions,” continue Martin and Coldrick. “The sale of T-shirts, vinyl and other physical products represent a crucial income stream for artists. It is only fair that they should retain the bulk of that revenue.”

In closing, the report also calls for a comprehensive fan-led review to be set be set up this summer to examine the long-term challenges to the wider live music ecosystem.

“We are grateful to the many dedicated local venues who gave up their time to take part in our inquiry,” says Dame Caroline Dinenage MP, chair of the CMS Committee. “They delivered the message loud and clear that grassroots music venues are in crisis. The ongoing wave of closures is not just a disaster for music, performers and supporters in local communities up and down the country, but also puts at risk the entire live music ecosystem.

“If the grassroots, where musicians, technicians, tour managers and promoters hone their craft, are allowed to wither and die, the UK’s position as a music powerhouse faces a bleak future. To stem the overwhelming ongoing tide of closures, we urgently need a levy on arena and stadium concert tickets to fund financial support for the sector, alongside a VAT cut to help get more shows into venues.

“While the current focus is on the many grassroots music venues falling silent, those working in the live music sector across the board are also under extraordinary strain. It is time that the government brought together everyone with a stake in the industry’s success, including music fans, to address the long-term challenges and ensure live music can thrive into the future.”

 


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Artists and managers back calls for UK ticket levy

Artists and managers have backed the Music Venue Trust’s (MVT) calls for a compulsory £1 levy on tickets sold for UK live music events above 5,000-cap.

Music Managers Forum vice-chair Kwame Kwaten and Featured Artists Coalition (FAC) CEO David Martin both expressed their support for the proposal during evidence sessions held in parliament today by the Culture, Media and Sport Committee to explore the ongoing crisis in the grassroots music sector.

Back in January, the MVT revealed in its annual report that 2023 was the worst year for UK venue closures since its launch a decade ago, with 125 venues closing their doors – a rate of two per week – and 38% of members reporting a loss.

“The first impact we need to recognise is that is 125 communities that have lost access to live music on their doorstep, and the impact on those communities… is very traumatic,” said Davyd. “In terms of the short term economic impact, those 125 venues will have provided 16% of all the performance opportunities in the UK. About 4,000 jobs have come under threat or have been lost.

“Our proposal in the UK is £1 per ticket for arena and stadium shows that would create a sustainable fund that could be administered by ourselves, by other people concerned for promoters, for artists, and create a fund where everybody can go so they can take risks with their programming and really give artists the first step on the ladder they need.”

A proposed levy could take three forms. A statutory levy imposed by government, an industry-mandated levy on all qualifying shows (which LIVE CEO Jon Collins pointed out might fall afoul of competition law) or a voluntary levy adopted by different artists, venues or promoters.

Industry umbrella trade body LIVE is in the process of establishing a LIVE Trust as a mechanism to distribute funds to the grassroots sector, and while the concept has been lobbied for – and brought to the attention of government – by Music Venue Trust, today’s hearing saw promoters, artists and managers also stake a claim to any potential funds filtering back to the grassroots sector.

“All of my members will tell you one of their biggest concerns, frankly, is the artists cannot afford to tour,” Davyd said. “It’s not just the venues aren’t there to play in, it’s also the venues are standing empty when they could be putting on bands, because bands cannot afford to put on the show.”

“You don’t get to Ed Sheeran playing two shows last year at The O2, unless he played The Bedford in Balham”

Ferocious Management MD Kwame hailed the ticket levy proposal as a “great initiative”.

“We do support that,” he said. “This whole thing about supporting the level of one person in a show up to 1,000 is absolutely crucial, because you don’t get to Ed Sheeran playing two shows last year at The O2, unless he played The Bedford in Balham, unless he played the Queen of Hoxton with iluvlive promoting. Unless artists and managers are supported from zero to 1,000-people venues, you won’t reach that level.”

Martin said he was open-minded about the idea, which he described as a “relatively complex topic”.

“It would need to be on top of the ticket fee,” he argued. “It can’t be a downward pressure on artists or a voluntary thing, where you have some artists – potentially British artists – saying, ‘Yes, we’re very happy with the levy.’ And then you’ve got foreign artists coming to the UK saying, ‘We’re not prepared to do this.’ It creates an uneven playing field.

“With the right will, government could really help the industry coalesce about how a levy would be collected and distributed.”

But while the FAC was in favour of government intervention in a levy, John Drury, National Arenas Association chair and VP and general manager of OVO Arena Wembley, was less enthusiastic.

“The reality of £1 a ticket for us – given many of our venues are managed on behalf of private landlords, city councils charitable trusts – would be something like a 20% cut in our EBITDA, so it’s not a few grains of sand, it is quite significant,” he pointed out. “Or angle is more that this is a problem for the industry as a whole and it goes right through the live level to artists, managers, agents, promoters, venues and anybody else associated with that system. We’re all very interdependent.”

“The reality of £1 a ticket for us… would be something like a 20% cut in our EBITDA, so it’s not a few grains of sand, it’s quite significant”

Kilimanjaro Live boss and Concert Promoters Association vice chair Stuart Galbraith also spoke in favour of a voluntary levy and cited Enter Shikari’s efforts to donate £1 from their 2024 UK tour to grassroots music venues via the MVT’s Pipeline Investment Fund.

“I think it’s realistic to expect that within the larger music industry, any sort of charge is not going to be absorbed by the industry it will get passed on to the customer,” he said. “If you place it outside the ticket, and if the charitable trust had charitable status, there would be no VAT deduction, there would be no PRS deduction, there would be no venue share and 100% of that money would reach the actual targets.”

The hearings were marked by clear divisions across the various sectors of the business, although all participants agreed that UK government should reduce VAT on concert tickets to something in line with many other European markets, such as the 5.5% rate paid in France. An idea which committee MPs said HM Treasury was highly unlikely to adopt.

On a proposed VAT cut, the position of industry umbrella trade body LIVE was at odds with its members: A blanket 5% VAT rate on tickets has been a principle manifesto point of LIVE for several years, while Drury told MPs that arenas “didn’t need” the rate cut, and Galbraith said a reduction should only be in venues up to 1,000-capacity. Davyd, meanwhile, said that a VAT cut for small venues “still wouldn’t make grassroots venues sustainable”.

“The single biggest change the committee could recommend to make grassroots venues and the ecosystem viable would be that of VAT”

“The VAT cut during a pandemic literally made the difference between us being able to promote shows or not promote shows,” said Galbraith. “The 20% tax burden versus 5% literally meant that we could do 100 more shows that year as we came out of pandemic and we now look at those shows, and they are just not viable. They never reach past the spreadsheet.”

Anna Moulson of the Association of Independent Promoters (AIP) agreed: “Five percent [VAT rate] over lockdown was so welcome with our members because it meant that we could break even which meant we could cover costs and actually make money, which is very surprising on the grassroots level. Some of our members are now turning down grassroots shows in order that they can be below the threshold of having to be VAT registered, so that means less artists will be taken on by promoters and developed by them.”

“We are overrun with people who’ve had a hit on TikTok, desperately now trying to build the grassroots audience that gives them a sustainable career”

In response to a comment that some artists were breaking online and performing at arenas without having toured through grassroots venues, Davyd said there had been a “remarkable turnaround” over the past two to three years.

“We are overrun with people who’ve had a hit on TikTok, desperately now trying to build the grassroots audience that gives them a sustainable career,” he said. “It’s a big thing in our sector for people to now be going out on tour, having jumped forward and then realised, ‘Wait a minute, I don’t have the deep connection with my fans that I get from being in a room with 250 other people.'”

Other topics discussed during the hearing included PRS fees in small venues, with both Moulson and Davyd arguing that much of the fees collected go into a “black box” of unattributed income which is then passed to artists with the most airplay annually. “It’s a reverse Robin Hood effect where income from small venues is going back to the biggest artists”, said Davyd.

PRS for Music’s Gavin Larkins also outlined that a Tariff LP review was due to begin after the summer with a target date of being concluded by Q2 2025.

While there was consensus that the UK grassroots scene was in dire need of intervention, the precise mechanism for that support remains a divisive topic. With artists and managers also now backing the call for a levy, the findings of today’s hearings – due to be published in April – will likely see a strong recommendation for more support for the grassroots sector from the larger venues and operators in the UK. The recommendation is even more likely given that it would reduce or remove the need for the UK Government to act itself in supporting the grassroots sector.

 


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UK parliament announces new live music biz inquiry

The British parliament’s Digital, Culture, Media and Sport (DCMS) Committee, is to launch a fresh inquiry into the UK live music business, focusing particularly on secondary ticketing and the declining number of small music venues.

The new investigation replaces the committee’s previous inquiry into ‘ticket abuse’, which was cut short by the snap general election of June 2017, and will once again invite secondary ticketing companies – including previous prominent no-show Viagogo – to contribute evidence.

“This inquiry will be an opportunity for the committee to revisit the important issue of secondary ticket selling,” explains DCMS Committee chair Damian Collins MP (pictured). “We want to hear from the public about their direct experiences with this issue and what they think can be done to tackle it.

“We’ll also investigate what problems many small music venues face, as they struggle to keep their doors open despite the unwavering enthusiasm from the British public for live music.

“The committee also welcomes the government’s announcement [on 18 January] that the agent-of-change principle will form part of the National Planning Policy Framework for housing. As part of this new inquiry, we’ll be exploring other ways in which the government can support upcoming artists and grassroots venues that form such a crucial part of the music scene in the UK.”

“We want to hear from the public about their direct experiences”

Per DCMS, written evidence is invited in the following areas:

Evidence can be submitted via this link on the committee’s website until 17.00 on 28 February 2018.

 


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CMS Committee: Ban bots now

Members of the UK’s Culture, Media and Sport Committee – who earlier this month heard from music and ticketing industry figures in a heated evidence session on ticket abuse – has recommended “immediate measures” to ban the use of ticket bots.

In a letter to culture secretary Karen Bradley (pictured), dated 22 November, which can be read in full here, committee chairman Damian Collins says there is unanimous agreement in the need for “immediate measures to be taken to make it an offence to use digital ticket purchasing software to buy up an excessive number of tickets for events, as has happened in other jurisdictions”.

Despite digital culture minister Matt Hancock saying previously that in his view the use of bots is prohibited by the Computer Misuse Act 1990, Collins concludes the act “does not seem to allow sufficient provision or clarity in this area, and as such there is a strong case for new legislation here to prevent individuals manipulating online ticketing systems”.

The best course of action, suggests the committee, is to amend the Digital Economy Bill, as suggested by Nigel Adams MP, ahead of the House of Commons’ consideration of the bill next Monday.

“There seems to be a lot of consensus on amending the Digital Economy Bill to ban technology that harvests tickets on a large scale before genuine fans ever get a look-in”

“The answers we got from witnesses representing the ticket sellers and resellers went from complacent to evasive, and their failure to provide the most basic assurances about what they’re doing to tackle known large scale touts and fraudsters operating on their own sites – we had an example on screen in front of a member [of Parliament] in the session – have led us to believe there may be much bigger problems in this market than we originally thought,” reads a statement from Collins.

“We are writing to the secretary of state [Bradley] to ask her to begin to look more closely at this issue, but also as a first step that there seems to be a lot of consensus on amending the Digital Economy Bill to ban technology that harvests tickets on a large scale before genuine fans ever get a look-in.”

The banning of bots will apparently be a prelude to a much larger inquiry into ticketing in general, as reported by IQ last week.

 


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UK parliament recommends fresh ticketing inquiry

The British parliament’s Culture Media and Sport (CMS) Committee, which yesterday heard evidence from managers, artists and ticketing companies in a session on ‘ticket abuse’, has recommended a fresh investigation into “the whole area of ticketing” in response to “far-ranging and disturbing factors in the market”.

In a statement, issued this morning, the committee says it was “aware of the distortion of the ticketing markets caused by the use of technology (bots and software) to ‘harvest’ large numbers of tickets as soon as they went on general sale”, but that evidence from those opposed to the current resale market – and unsatisfactory responses from the ticketing companies represented – “led us to conclude that a fuller investigation of the whole area of ticketing is needed”.

The session brought to light “clear indications of too-close relationships between those selling tickets on the primary market and sellers on the secondary market,” reads the statement, which also criticises’ “witnesses’ failure to give satisfactory answers to the committee’s questions about where companies’ main profits are made, the possibility of even Chinese walls between parts of the same company and the willingness of the ticket selling companies to even try to identify, let alone bar, large-scale ticket touts and fraudulent sellers”.

A roundtable discussion, headed by secretary of state for culture, media and sport Karen Bradley and previously only announced as taking place “before Christmas”, will be held at the end of November.

“We will decide how best to take the issues forward once we know the outcome of this,” says the committee, “and in light of the conclusion of a Competition and Marketing Authority [sic] investigation, expected shortly, into whether ticket companies are complying with the law.

“This is fantastic news for all UK music fans and those who have campaigned so long for action …Yesterday, the dysfunctional market and bad practices of the big four secondary ticketing websites were laid bare”

“In the meantime, we will be writing to the secretary of state urging her to study the evidence given to us about the under-reporting of income by known touts and to raise this with HMRC [Her Majesty’s Revenue and Customs] as an area which warrants their investigation.”

Despite the committee being unimpressed by the ticketing company witnesses – StubHub was, said MPs, “not doing anything to check who [the people selling tickets on your site] are”, while Ticketmaster UK’s Chris Edmonds was told “you are not helping yourselves”, in response to his admission that tickets for Phil Collins’ upcoming UK tour, for which resale is prohibited, are listed on Ticketmaster/Live Nation-owned Get Me In! – all present agreed on the need to ban the use of ticket bots. “We intend to table an amendment on the report stage of the Digital Economy Bill later this month to effect this,” says the committee.

A spokesman for the FanFair Alliance welcomed the news. “This is fantastic news for all UK music fans and those who have campaigned so long for action,” he says in a statement.

“Yesterday, the dysfunctional market and bad practices of the Big Four secondary ticketing websites were laid bare before members of the Culture Media and Sport Committee. We anticipate that a fuller investigation of this market will lead to much-needed reform. The FanFair Alliance fully supports further actions into the fraudulent activities of online ticket touts and the industrial abuse of this market, as well as an amendment to the Digital Economy Bill to ban the misuse of bots.”

 


Nigel Adams, the MP for Selby and Ainsty, who sits on the Culture Media and Sport Committee, tells IQ today he doesn’t expect the government to respond to the Waterson report until after the roundtable discussion later this month.

When asked if he shares Ian McAndrew’s view that primary ticketing companies passing to the secondary market are violating existing consumer legislation, Adams says that “may well be the case” and will be discussed with Bradley.

He also calls more transparency from promoters and ticketers into how many tickets are actually available to the general public.

 

 


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UK MPs warm to ticket resale regulation

Days after culture minister Dario Franceschini declared he would seek to make online ticket touting illegal in Italy, members of the British parliament (MPs) this morning signalled their willingness to further regulate the UK’s secondary ticketing market, with one stating: “The time has come when we have to do something.”

In three sessions, the Culture, Media and Sport Committee heard from MMF’s Annabella Coldrick, Wildlife Entertainment’s Ian McAndrew and You Me at Six frontman Josh Franceschi; Ticketmaster UK chairman Chris Edmonds, eBay/StubHub’s Alasdair McGowan and Paul Peak and the Society of Ticket Agents and Retailers’ Jonathan Brown; and Professor Michael Waterson and Iridium Consultancy’s Reg Walker, respectively, with MPs backing calls for action from those hostile to online ticket resale.

“I’m on your side on this one,” Nigel Huddleston, MP for Mid-Worcestershire, told Coldrick. “The British public are more than happy to applaud entrepreneurs, but there’s a fundamental difference between that and price gouging.

“Being ripped off – that’s what the British public won’t tolerate.”

High Peak MP Andrew Bingham said: “I sat on the all-party group with Sharon [Hodgson MP] in the last parliament, and I took the view then that this market is working and we should leave well alone, but I have to say things have evolved […] and the time has come when we have to do something.”

“Things have evolved and the time has come when we have to do something”

Bingham, however, warned against acting hastily and appeared to suggest the issue still needs to be looked at in more detail. “What we don’t want to do, if we’re going to legislate, is send the industry back to blokes hanging around outside venues shouting, ‘Tickets, tickets, who wants tickets’,” he said. “As legislators, we want to get this right.”

Colne Valley MP Jason McCartney suggested “naming and shaming” promoters and venues complicit in the transfer of inventory from the primary to the secondary market, calling them “the villains in this”.

While declining to name names, Coldrick said there is a “if you can’t beat them, join them” attitude among some artists, while McAndrew revealed he had been “approached often by the ‘big four’ resale sites”. “That’s a proposal I’ve refused on a number of occasions, but I can understand how that might be a temptation for [those] who want to maximise revenue,” he said, “and that’s why I think we need to look at transfer of tickets from the primary to the secondary market.”

Nigel Adams MP, a longtime campaigner against ticket bots and professional touts, asked Coldrick, McAndrew and Franceschi: “What is the solution? Not everybody can do what Josh does, sitting in a shop and selling tickets to fans… What do we need to do?”

“For a start, the law needs to be enforced,” said Coldrick. “The Consumer Rights Act [2015] says seat numbers and rows must be shown on tickets, that if promoters make a clear statement tickets can’t be resold they can cancel them…

“The experience was very positive, and a distinct progression from previous governments’ narrative around the issue of ticket abuse”

“There needs to be a wholesale inquiry into how these tickets are being sold and how they’re being acquired.”

McAndrew added: “We need to see criminalisation of bots, and we need to look at transfer of tickets from primary to secondary. I’d like to think that’s already an offence under existing consumer law.”

Reflecting on the session, McAndrew told IQ this afternoon: “I think the experience was very positive, and a distinct progression from previous governments’ narrative around the issue of ticket abuse, particularly with relation to ticket resale.

“The committee clearly understands the issues around ticket resale and the harm that is caused to consumers. They also understand the opaque nature and scale of the ticket resale business and how the lack of transparency impacts negatively on music fans, and recognise the vast profits and excessive fees generated by the £1 billion-a year-resale business and how virtually none of that goes back into the live music economy.

“I hope today’s session will provoke a more in-depth investigation to the issues around ticketing in the UK.”

 


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