The Stage

Government pledges support to smaller music enterprises

Published Tuesday 11 October 2005 at 14:55 by Nuala Calvi

Small and medium-sized music businesses will be given more support from the government towards start up and development costs, music minister James Purnell has promised.

Independent record labels, music publishers, concert promoters and PR agencies with 250 employees or less will be invited to take part in a month-long study to discover what barriers they face getting finance. The results will then be used to develop new initiatives to help the 90% of companies in the industry classed as small or medium-sized.

Purnell said: “Every company starts small before it gets big. We need to help them make that journey. Many small and medium-sized enterprises in the music industry face difficulties getting finance to start up or to grow - we know the symptoms, now we must find the cause. The study will, for the first time, give us real, robust data which will help inform our future policies.

“The music industry contributes £5 billion each year to the UK’s economy and employs 130,000 people. And without the independent record labels and publishers, who discover much of our new and successful talent, we would be starved of great British acts.”

The announcement follows research by the Department for Culture, Media and Sport suggesting that the majority of smaller music businesses experience difficulties in accessing finance to fund start-up or second stage growth.

Musicians’ Union business official Nigel McCune told The Stage: “We are delighted this research is taking place and it looks like it will be the biggest survey that’s been done in this area. There are so many barriers to SMEs in the music industry. Most of their assets are based on intellectual property and securing finance against that as opposed to against tangible property is very difficult. There is the perception among regional development agencies that this is a high-risk industry which they do not understand. We need the government to remove those barriers and we need them to tailor support to this particular industry, in the same way that the film industry now enjoys tax breaks and better recognition of how it operates.”