COVID-19 AND THE MUSIC INDUSTRY: ANDY COOK, YELLOW ARCH STUDIOS
Andy Cook is a director of Yellow Arch Studios, based in a regenerated area of Sheffield. The studios normally employ around 20 people; this group were furloughed at the time we spoke to Andy, but the business is likely to adopt a new employment model as it emerges from lockdown. We interviewed Andy on 8 July 2020, just after the Government announced its rescue package for the arts and its “five steps” road map plan for the industry.
How did Covid-19 affect your income and/or earnings in the weeks immediately following lockdown?
The impact of Covid-19 on income was significant and immediate – the business normally turns over around £150,000 in the spring quarter (April to June), and this dropped to zero as a result of Covid-19.
Did you apply for any Covid-19 loans or grants and were you successful?
The business applied for, and was awarded, a government “bounce back” loan of £50,000. The application process was almost too easy – I’ve had to deal with government departments all my working life and usually you’re drowning in the paperwork and want to do a Reggie Perrin by the time you’ve finished. With the bounce back loan, it was a case of pressing a couple of buttons to submit your application online and the money arrived in your bank account a couple of hours later.
Have you developed new ways of working, or diversified what you do, in response to the impact of Covid-19?
The impact of Covid-19 on the studios was immediate. We started an album in January 2020 for an international artist living in Spain. The artist flew over with their team and started in the studio, with a time line, world tour and hundreds of thousands of sales in the bag. The whole thing ground to a halt on 20/3/20, but we managed to piece it back together via technology and people basically working from their bedrooms. We got the music onto tape and, instead of getting together to listen, did feedback via streaming and Skype calls. The album is good, but I don’t think we did the body of work justice due to Covid-19 – there was just too much digital intervention.
We are diversifying and developing new ways of working post-lockdown, but they all ultimately involve diluting the creativeness of what we do – it’s all about moving online. We’re talking to the BBC and Performing Rights Society about live streaming performances from the studios – we have basically shut down the rehearsal spaces and turned them into music production spaces.
We’re also taking on more film music work – we’re looking for any income streams that don’t involve putting people in a room, and instead employing more gadgets and devices. We have lots of contacts in the film industry so just put our hands up and said we’d do some film work, it’s all about opening up to do more. Film music is way easier as it doesn’t require hordes of musicians to be in a room at the same time; we invite them in one at a time, or they perform at home/other locations and send in electronic files of their performances.
What about alternative sources of income other than that earned in the music industry? And what have you done about employees of your business?
I am an employee and director of the studios, so take a salary and dividend from the business when there is income coming in. In addition to my work with the studios, I have also always done consultancy work developing creative spaces and start-ups, so will look to ramp up this side of my work in the coming months as a way of managing the impact of Covid-19.
All of our employees (around 20) have been furloughed. The main income stream for the business is from live performances in the music venue: this income dictates how many staff we can employ. I have recently handed this part of the business to a new management team and will get a commission from sales. We’re looking to TUPE half of the staff back into the building once furlough ends – the other half have mostly already moved towards self-employment/working for the studio on a freelance basis.
This decision to cut the PAYE strings is a conscious one and was taken due to the risks of operating in the creative sector; the only people to survive in the industry will switch to self-employment. This is the next phase of the gig economy – Covid-19 has just speeded up the process in our industry. We just can’t afford the risk of keeping people on the payroll as it takes £54,000 turnover to pay one minimum wage salary.
How do you see yourself emerging from lockdown in the medium and longer term?
We are having to restructure the business, based on the model of a pub with a lovely big backroom for small-scale events with no tickets/pre-sales or marketing, for example, running small comedy events and quizzes.
When the restrictions start to ease and the industry can see a possible breakeven point, we will begin event management again. I predict this will move forward with great momentum due to pent up demand, but by then, many event managers may be in so much debt they might not dare to take any more risks. All we can do at present is pay the rent and the wages earned on the day by our new-style, no PAYE gigging workers.
Looking to the future, the “new normal” looks diluted. In hospitality, you need to be working at 75% of capacity to break even. If we’re forced to operate at 50% capacity (due to social distancing measures), we’re nowhere near breakeven. Pubs and venues were shutting before Covid-19, so we will need to come back even stronger if and when we are able to open for live performances. Our viability depends on the last few ticket sales and the last hour at the bar – this is where the profit is made.
What about support for the arts from national and local government and agencies? What do you think needs to be done to help artists and venues access information and sources of financial support?
The government roadmap for the arts was written by someone who doesn’t understand the sector – it treats the music industry as if it operates under the same business model as car manufacturing. A car parts manufacturer can scale back production and dividends in a poor year and build them back up again once business recovers. It is impossible to do this in the creative industries as we are already on our knees.
The roadmap doesn’t work for our business, and the absence of a timescale is particularly poor. We are in a comparatively lucky position as our rent is low, so we can afford to open with just a couple of people working in the bar and breakeven across our activities. So long as we do this, we’re happy as directors to work for free and build on our other creative interests. The studios will only survive due to our historically low rent.
As for the national support package for the arts – as venue owners, we’re taking it with a pinch of salt. Eighty percent of Arts Council revenue is spent on 8% of the demographic and I worry that it’ll be the same with this package – the focus will be on venues like the South Bank and Covent Garden as these venues have to be kept going at all cost.
What about local help to access information and sources of financial support? I tend to go to a couple of national websites for information on sources of funding/grants for the industry: the main gov.uk site and the music venues trust site, which is like our trade union, a massive family of creative, communicative people.
The most helpful thing for me would be if the city council were able to provide more information about how to access national funding. Dealing with the Council is a bit like operating in the 1960s – for example, you can’t pay the licensing department online, you have to physically go to the office with a cheque. Also, if you email the Council you get an automated reply saying that they will respond in 28 days, by which point you’ve lost the momentum. It turns you cold.
What support would you like to see for the arts in the SCR economic recovery plan? Capital grants – obviously. And they need to be available without having to jump through inordinate hoops, and be means-tested so that they are linked to turnover. The SCR approach is characterised by meetings and no action – I read so much about what they’re going to do, what they’ve identified etc…but what we need is an actual plan with a timeline and means-tested capital grants.
Jobs in the music industry will change as new ways of working are established – how should training opportunities develop to meet the needs of the “new normal”?
The sector needs to develop a renewal scheme to mentor creative people in how to run a business, from sole trader upwards. This needs to cover everything from how to submit an invoice to understanding a balance sheet.
A major issue is that young people wanting to work in the music industry have to be both incredibly tech savvy but also have very good soft skills, such as communication skills, and many struggle with the latter. Also, they need to develop “doing” skills and be more motivated.
Existing staff need to up-skill quickly in the digital field and adapt their thinking – for example, the role of a lighting engineer lighting a stage with an audience is very different to lighting a live streamed concert. Colleges need to quickly respond to the rapid switch to digital in our industry and modify their courses.
Live music is vital for the wellbeing of people, but how can we get this message across to politicians and funders?
This is a difficult question – music is important for humanity’s wellbeing and, if humanity is not well, mental ill health will become the new virus and be passed on like a virus. The rewards we give ourselves tend to be creative ones, for example, we go to the cinema or a gig after a hard week at work, but the creative industries that are responsible for delivering these rewards are not valued.
I feel sad, and even gutted, about what I’m having to do with the business. We’re diluting the creativity as all the organic and human processes are stripped out as AI and a binary world takes over. The feeling is going out of the creative process, it’s painting by numbers. This may come across as “glass half empty” on my part, but I’ve been here/done it – and it doesn’t matter what government says it’s going to do, or how much it values the arts, because it’s so disconnected from reality.