The UK’s live music sector celebrated a milestone year in 2023, with the industry’s economic contribution reaching a record £6.1 billion. This figure marked a 17% growth from the previous year and an impressive 35% surge compared to pre-pandemic levels in 2019. A driving force behind this success was the return of iconic global acts, such as Beyoncé, Coldplay, and Elton John, whose sold-out tours helped fuel the sector’s recovery from the prolonged pandemic shutdown.

Rebounding After the Pandemic

As fans flooded back to concerts, festivals, and live performances, the industry saw its most substantial growth since 2022. The pent-up demand for live experiences, combined with major artists embarking on long-awaited tours, propelled the sector to new heights. Live music also proved to be an economic powerhouse, creating nearly 230,000 jobs—a significant increase of 9.4% since 2019. Concerts, which generated 73.5% of the total revenue, were particularly instrumental in this economic boom. The tours of Beyoncé and Coldplay alone contributed significantly to this growth, illustrating the dominance of large-scale events in shaping the sector.

Jon Collins, CEO of LIVE, the UK’s live music industry representative body, emphasized the sector's growing impact on the economy. "2023 delivered significant growth for many sections of the live music ecosystem. We had some of the biggest names in music sell out tours and festivals across the UK. However, we cannot ignore the rising pressure on the grassroots sector, where venues and festivals are closing at an alarming rate.”

The Geography of Live Music: London Leads, But Regions Also Thrive
London maintained its position as the hub of the UK’s live music scene, accounting for 30.6% of the industry’s total revenue. Concerts held in the capital were central to the overall economic impact, and high-profile events at venues such as the O2 Arena showcased the city's pull for global talent and fans alike. Manchester and Glasgow followed with 7.4% and 5.5% of the revenue, respectively, while other cities like Birmingham, Edinburgh, Cardiff, and Belfast also played vital roles in the UK’s live music landscape.

Emma Bownes, Vice President of Venue Programming at AEG Europe, which owns the O2 Arena, reflected on the growing popularity of live events. “2023 was our busiest year for ticket sales and the number of shows. There is a clear appetite for shared experiences, and we saw fans come out in droves to catch their favorite acts, many of whom had been waiting years to perform live.”

However, despite the financial success seen in urban areas and large venues, there is an increasingly worrying divide between high-profile, arena-level performances and the more intimate, grassroots music scene.

Grassroots Venues in Crisis
While the live music sector's overall performance was exceptional, many smaller venues and festivals struggled to stay afloat. In 2023, 125 grassroots venues permanently closed their doors, and 36 festivals were canceled. These closures have a devastating ripple effect across the industry, as grassroots venues are the breeding ground for emerging talent. Artists rely on these smaller platforms to develop their careers, gain visibility, and build an audience before progressing to larger stages.

The Music Venue Trust (MVT), which advocates for grassroots music spaces, raised alarms earlier this year, reporting that, on average, two small venues were closing each week. This is a severe concern for the future of the UK's music ecosystem, as fewer platforms for emerging talent could stifle the industry's long-term growth.

According to Mark Davyd, CEO of the MVT, the financial struggles of small venues are being exacerbated by soaring energy bills, high rent, and rising operational costs. “There are more people going to live music concerts than ever before, but the cost of putting on new and emerging talent is increasingly unaffordable. These grassroots venues are essential for nurturing the artists of tomorrow, and if they continue to close at this rate, it will severely impact the diversity and vibrancy of the live music scene.”

Festivals Also Feeling the Strain
Alongside venue closures, festivals are grappling with similar challenges. Although major festivals such as Glastonbury and Reading continue to draw massive crowds, smaller, independent festivals are struggling. With inflation, labor shortages, and rising costs of production, many smaller festivals found it increasingly difficult to break even, let alone turn a profit.

The cancellation of 36 festivals in 2023 paints a bleak picture for the future of independent festival culture. Michael Kill, CEO of the Night Time Industries Association, warned of the dangers of the growing divide between large, profitable events and smaller, financially vulnerable ones. “While it's encouraging to see large-scale concerts thriving, we must address the widening gap to ensure the entire live music ecosystem remains vibrant and diverse. The loss of independent festivals and venues is a critical issue that threatens the cultural fabric of our industry.”

The VAT Debate: Industry Calls for Government Support
A significant challenge facing both large and small players in the industry is the current 20% VAT rate on tickets. Compared to other European markets, where VAT on live music tickets is often considerably lower, the UK's rate is seen as uncompetitive. The live music industry is now calling on the UK government to reduce VAT, particularly for grassroots venues and smaller events, to ease the financial strain and stimulate growth across the sector.

The Culture, Media, and Sport Committee's report on grassroots music venues, published in May 2024, made a similar recommendation. It called for a temporary reduction in VAT to support smaller venues and festivals, allowing them to recover and remain viable. Jon Collins of LIVE echoed these sentiments, stressing the need for government intervention. “Reintroducing a lower rate of VAT on tickets would bring the UK into line with international competitors. With a lower rate of VAT, we could see the sector grow further, supporting more jobs, generating more investment, and putting on more gigs, festivals, and tours for people to enjoy.”

A Bright Future for Arena Shows, but What About the Grassroots?
While the future of arena-level concerts appears promising, with major tours such as Taylor Swift’s Eras Tour and the anticipated Oasis reunion set to boost 2024 revenues, the grassroots sector remains in peril. The current divide between large-scale success and grassroots struggles has never been more stark.

The Night Time Industries Association has emphasized that large-scale events are not sustainable without a healthy grassroots foundation. If there are no smaller venues for up-and-coming artists to perform in, the pipeline of talent to fill future arena tours could dry up, threatening the long-term viability of the entire live music sector.

Conclusion: A Critical Juncture for UK Live Music
The UK's live music sector stands at a pivotal moment. On the one hand, the industry is celebrating unprecedented growth and record economic contributions. On the other hand, small venues and festivals, which are essential to the industry’s future, are fighting for survival. The calls for government intervention, particularly a reduction in VAT on live music tickets, are growing louder, and the future of grassroots music may well depend on whether such measures are implemented.

The success of iconic artists like Beyoncé and Coldplay is certainly something to celebrate, but if the UK wants to remain a global leader in live music, it must ensure that the smaller players in the industry are not left behind. For the live music ecosystem to continue thriving, all levels of the sector—from grassroots venues to stadium tours—must be supported and allowed to grow together.

The UK’s live music industry hit a record-breaking £6.1 billion in 2023, driven by iconic acts like Beyoncé and Coldplay. However, grassroots venues and festivals, the bedrock of the sector, are in crisis, with urgent calls for government intervention to ensure the industry's long-term vibrancy.