Let me start with some figures. In 2013, the revenue generated by the music industry collectively totalled just shy of £10 billion pounds. The UK industry accounted for 13% of that total. 88.5% of that revenue is attributed to just three global powerhouses: Universal Music Group (39.5%), Sony Music Group (30%) and Warner Music Group (19%). The rest belongs to the continually shrinking domain of the independent labels. If the HMRC’s (Her Majesty’s Revenue & Customs) note of caution regarding the non-payment of interns becomes reality, these three behemoths (and a fair few indies for that matter) won’t feel a thing. But there will be a consequence.
Delegation is the name of the game for most labels. They will simply farm out various intern duties to those standing just above, the interns, on the next rung of their company employment ladder. Interns will still be hired and they will of course get paid as per any legal obligation. But there will be an awful lot less of them and those that are lucky enough (or unlucky enough in some instances) to, be hired will have a lot more errands to run than their predecessors. So as well as taking on even less future Simon Cowell’s, many of the ones that are taken on will become far too disenfranchised to want to continue on up that aforementioned ladder.
As with any change of this nature however, it’s the little guys that are hit hardest and the very small, tightly knit indies are no different. Much of what they are able to take on in terms of talent, is down to how they can utilise their limited man hours. Which means that their interns are an essential part of their operation. Having to pay their interns may be the difference between staying afloat, or sinking without trace. Which in turn, makes it that little bit harder for undiscovered talent to get that big break.
And of course, there is the fact that many interns are very happy to work for free in an extremely aggressive industry. With the vast amount of applications that are sent to those with the final say, applicants must sell their talents just to get their foot in the door. To some the experience gained and contacts made during a successful stint far outweigh, any basic remuneration and is the main reason for the ultra competitive application process in the first place.
There is however, an upside. The playing field may shrink but for those who get the chance it will be an extremely level one. Those that don’t have the cushion of family funding or are not able to extend themselves fully due to commitments to paid work, will no longer be at an immediate disadvantage. The modern world houses many people who had to let the opportunity pass them by simply because they didn’t have the means to make things happen. That will no longer be the case.
What is now a warning from the HMRC will eventually become an ultimatum and changes will have to be made. I think that they are giving the labels time to get themselves ship shape before the inevitable finally happens. At that point everything I have just written will become irrelevant. I suspect one or two indie labels may struggle not to do the same.