Brave New Funding World

Paul Nichols headshot
  • By Paul Nichols
  • 12 Jul 2011
  • min read
Charlotte Otter explores how the music industry has been hit by arts funding cuts, and asks the people at the heart of the support sector about the new opportunities that could see music organisations and songwriters through the lean times

Sponsorship has always had a symbiotic relationship with the music industry, helping to support and develop talent, organisations and events. Like all areas of the economy, the sector has suffered from the recession, and some established funding opportunities have waned. However, some innovative funding frameworks are emerging that could help foster a new generation of talent.

According to the Department for Culture, Media and Sport, music contributes over £3b annually to the economy. And, while many despair at the general lack of funding this important industry receives, new online services are promising to help plug the gap.

In fact, some sponsorship areas are actually benefiting from the government cuts – not least fan funded websites and peer to peer services, whereby fans invest in artists in exchange for a return in album sales.

Many of these services, such as Kickstarter, work by matching aspiring creatives with would be patrons who are willing to pledge money to support new projects. Patrons are granted significant access to the projects they finance, including reports on the creative process and momentos such as albums and gig invites.

music contributes over £3b annually to the economy

Although there are many start ups offering a similar service both locally and globally, US based Kickstarter is the largest in the world. Its co-founder Perry Chen explained that it is not an investment organisation, lender or charity, but ‘something in the middle; a sustainable marketplace where people exchange goods for services or some other benefit and receive some value’, he told the New York Times.

Experimental indie bands Yeasayer, The Polyphonic Spree and Swedish chanteuse Lykke Li used Kickstarter to raise funds to travel to Gulu, Uganda to perform last year. The tour was organised by the Invisible Children charity and filmed by French music website La Blogotheque. Those who donated received incentives, from downloads and documentary DVDs to autographed albums and garments.

Closer to home, Welsh rock band Funeral for a Friend released the album The Young And Defenceless earlier this year  through the direct to fan website PledgeMusic, while competitor service Slicethepie announced Bradford band Scars On 45 had signed a multi album deal with Atlantic Records after raising £15,000 through its site.

Slicethepie chief executive David Courtier-Dutton says fans who invested in the band made a profit of 800%, and notes that the company doesn’t have many artists that try for funding and don’t succeed.

‘It’s not always the ones that have got the most fans, or who are popular singer songwriters, or the bands which are the most successful at getting finance either. It is more about being proactive and having a strong fan base,’ he explains.

According to PledgeMusic managing director Malcolm Dunbar there are two types of fan-funding available; ‘ice breakers’ who act like banks, offering investments for high returns and often the loss of songwriting rights. And then there are websites that act as feeder labels, discovering and nurturing talent before signing them on to more established companies.

And, says Dunbar, as the number of indie labels continues to decrease, along with the amount of signings to each company, fan-funding like this will only continue to rise. ‘What is clear is that there are still lots of artists making music and a lot of different ways of entering the market, and we are a viable option to what’s available.’

Penny King, senior strategy officer at Arts Council England (ACE), agrees that there are still a lot of opportunities available to organisations and songwriters, but it is important to know where to look. ‘Yes, times are different, but there are still a lot of opportunities out there for good work to be funded,’ she notes.   ‘We are very much open to talking to people and advising them. We have a central enquiries line which can be reached at any time.’

Shift in traditional funding

Earlier this year, the government cut ACE grants by around £100m (26.6%), as part of its wider spending review. Although ACE absorbed the majority of the losses, it still passed on 15% to the arts sector, and sixteen music organisations had their grants cut altogether.

But, while ACE saw large national organisations, including the Royal Opera House and the country’s symphony orchestras, receive cuts of 11%, the body also opened up its application portfolio to new organisations, resulting in groups such as the Academy of Ancient Music and Tête à Tête becoming part of its portfolio for the first time.

King says that the move has brought more balance to its funding scheme and, with the creation of a single assessment centre, the judging process for applications has become a lot fairer.

‘Innovation, imagination and excellent management have always been very important to us. However, now that funds are tighter it means the whole context of an application needs to be assessed to see where it will sit within the grand scheme of things,’ she explains.

Although King says the amount of applications to ACE has only risen slightly, PRS for Music Foundation received 1,034 applications for funding last year – a 38% rise from 2009 and an 80% rise from 2006, making it the largest funder of new music in the UK.

Lost Arts, a three year project which aims to catalogue all the initiatives, events, performances and organisations that will be axed due to the funding cuts, estimates that more than £20.5m has been lost from the total UK arts budget since the end of March 2011.

Meanwhile, children’s charity Youth Music has seen a 110% increase in the number of applications in the year 2010-11, compared to 2009-10, as alternative funding options dry up. Of these, only 42% passed through the organisation’s basic eligibility specifications and 12% were accepted.

Youth Music director of programmes Nick Howdle says that the charity is looking at how it can improve its application process for candidates in the future, minimising the amount of time it takes to notify unsuccessful bidders, as competition for grants rises.

‘We have always had a rigorous funding process that people have to deal with in the first place, but the pressure on applications has got a lot fiercer. We are increasingly looking to fund organisations which will clearly offer the best support possible for children and young people, and those that can contribute towards the bigger picture,’ he says.

As well experiencing a significant rise in the number of grant submissions, Howdle has also seen a shift in the way organisations are approaching their applications. Although some funding sources have dried up, other opportunities may have risen up in their place, so it is important for organisations to think outside the box and look to align their ‘offer’ to the needs of local authority commissioners, he says.

‘In some ways people need to be more entrepreneurial and forward thinking. Organisations need to look carefully at where they position themselves. It’s about thinking about funding in a different ways and being able to define exactly what their contribution will be to that region, and the industry as a whole, rather than just selling themselves.’

PRS for Music Foundation director Vanessa Reed points to both the positives and the negatives of the changing funding landscape, noting that the rise of direct to fan websites is a positive new step in the evolution of traditional financial models.

She adds that it is too early to judge how private funding organisations, such as the foundation, will be affected by the cuts, but notes that reduced finances across the sector as a whole could make it tougher for every interdependent aspect of the industry to flourish.

Reed explains that while other funding bodies are changing their application process, the Foundation would not necessarily take the same line. ‘If an organisation was 80% dependent on public funding and then received none, for example, the organisation would need strong evidence of how it could survive and deliver the activities it has asked them to support with its much smaller grant,’ she says.

However, she notes that the foundation also keeps in close contact with other private bodies and Arts Councils, to share experience of how to support organisations in transition. ‘We have also initiated a number of partnership programmes which identify specific needs or target groups who would benefit from specialist support, networks and training, and we will continue to do this as the impact of the current financial climate increases.’

Changes to hardship funding

Another area experiencing the knock on effects of funding cuts is the musicians’ benefits and hardship funding network.

In the last two years the PRS for Music Members Benevolent Fund has awarded grants totalling £738,375 to improve the quality of life for PRS for Music members or help those in financial crisis.

John Logan, general secretary of the fund, confirms that the number of first-time applicants has increased and predicts that, as the government amplifies its scrutiny of incapacity benefit claimants, the charity will experience a huge rise in applications.

‘Going forward, we will see an increase in applications for more long term help and support,’ he says. ‘Incapacity benefit will be removed and that will have a huge impact on individuals, and I foresee a number of problems on the horizon.’

Musicians Benevolent Funds senior musician support officer Joe Hastings echoes Logan’s views. ‘There is a lot of concern at the moment, as the revaluation of the benefit system has had a huge impact on our beneficiaries. Already we have noticed a difference to the organisation, particularly in the impact of straight provision to our beneficiaries,’ he says, noting that the age of applicants ranges from 18 to 104 years old.

‘The last 18 months has seen a lot more requests for assistance from people struggling to find work and who have health issues. This will only increase as venues continue to close and other avenues which they may have traditionally found support from stop operating.’

Both Hastings and Logan stress however, that despite the increase in applications, there is still hope for musicians in the future.

‘We are a safety net for difficult times and have been for the last 25 years,’ says Logan. ‘The PRS for Music Members Benevolent Fund will do its best to provide advice, grants, loans and other imaginative forms of support for older PRS for Music members and those who are unable to continue working due to ill health, disability or accident. We will meet the needs of PRS for Music members now and in the future.’

Funding deadlines

The female songwriting fund Women Make Music, set up by PRS for Music Foundation and The Bird’s Eye View Film Festival, will close for applications on 8 August at 6pm.

The project, which launched on 8 March, is offering grants of up to £5,000 to women who create and perform new music. Funding will also be offered to commissioners working with women composers for the first time. See for more information.

Submissions to the foundation’s Performance Groups, New Works, Promoters, Organisations and Festivals grant fund should also be received by 8 August.

Contact details: