Official Report (Hansard)

Session: 2007/2008

Date: Thursday, 10 January 2008

Northern Ireland Music Industry

10 January 2008

Members present for all or part of the proceedings:

Mr Barry McElduff (Chairperson)
Mr David McNarry (Deputy Chairperson)
Mr Dominic Bradley
Mr Francie Brolly
Lord Browne
Mr Kieran McCarthy
Mr Pat Ramsey
Mr Ken Robinson
Mr Jim Shannon

Witnesses:

Mr John Edmund ) Northern Ireland Music Industry Commission
Mr Ross Graham )
Mr Dale Aiken )
Mr Lesley Hume ) Northern Ireland Recording Studio Association
Mr William Walker )

The Chairperson (Mr McElduff):

We will now have a presentation from the Northern Ireland Music Industry Commission (NIMIC) and the Northern Ireland Recording Studio Association (NIRSA).

Mr P Ramsey:

May I make a pertinent point before we receive the presentations?

The Chairperson:

Yes, you may.

Mr P Ramsey:

The Committee is going to listen to two organisations that have some concerns about the Oh Yeah project. However, representatives from Oh Yeah are not here to make a presentation or to rebut —

The Chairperson:

There is a copy of Oh Yeah’s correspondence in the members’ pack.

Mr P Ramsey:

Oh Yeah is not present in order to give consideration to any genuine or other concerns that those organisations have. Therefore, points will be raised today that the Committee and Committee staff will be unable to resolve.

I do not want to curtail the debate, but I propose that representatives of Oh Yeah are invited to attend a Committee meeting so that they have an opportunity to rebut any arguments or cases being made against them. We should also provide them with the Hansard transcript of the presentations made by both organisations today.

Mr McCausland:

In a sense, NIMIC and NIRSA are similar to trade organisations that cover all providers. I have no detailed knowledge of the music industry in Northern Ireland, how many recording studios there are or the scale, scope and nature of their work. I hope that the presentations will give the Committee a sense of the overall picture. I do not view this meeting as anything more than that. It is important that the organisations give us a sense of the music industry in Northern Ireland.

The Chairperson:

Pat has made his point. We can park it for now and revisit it later today.

The members’ pack contains correspondence on the Oh Yeah project from the Minister of Culture, Arts and Leisure. We also have correspondence from the Northern Ireland Music Industry Commission setting out its views on the Oh Yeah project. NIMIC has also provided us with a copy of its presentation.

The witnesses are: Mr John Edmund, chairperson of NIMIC; Mr Ross Graham, chief executive of NIMIC; Mr Dale Aiken, chairperson of NIRSA; Mr Lesley Hume from EMS Studios; and Mr William Walker. Those are the names that I have been given, I hope that they are correct. If so, the system works. Someone has said that a patriot is a person who celebrates receiving a parking ticket because the system works.

Mr John Edmund ( Northern Ireland Music Industry Commission):

We appreciate the opportunity to make a presentation to the Committee. I chair the Northern Ireland Music Industry Commission, Ross Graham is my chief executive, Dale Aiken, Lesley Hume and William Walker are representatives of the Northern Ireland Recording Studio Association.

We thought that it might be helpful, and, I hope, not too boring, if we try to establish the context of the Oh Yeah project, at least as we see it. By doing so, when we get down to the specifics of giving our opinions about the positives and negatives of the project, the Committee will at least be aware of our perspective. We will be happy to answer questions.

The Chairperson:

Will you and Dale make a 10-minute presentation each?

Mr Edmund:

We will broadly do that. NIMIC will establish the context and express some views on Oh Yeah, and Dale will take a recording-studio-based perspective on the project.

Our intention is to approach the proposal from a specifically economic and creative industries perspective, not from a cultural perspective. However, we recognise that significant cultural impacts arise from the project, which is another issue that you may want to discuss and which we will be happy to address.

It is important to start by recognising the fact that the UK music industry does not receive much credit for the £5 billion that it contributes to the economy every year, the 120,000 people it employs and the £1·3 billion it exports. Therefore, it is not a small industry. We must also recognise that the music industry promotes inward investment to the UK in a significant international context and encourages further creativity in other sectors.

You will be aware that the digital content strategy for Northern Ireland has been launched, and music is a fundamental part of that and, therefore, a fundamental part of the knowledge economy that we are seeking to create in this country.

Our strategy has been to consider the industry’s current position, and work from there rather than where we would like to be. The industry is at an embryonic stage, albeit a positive embryonic stage; over the past three years, we have seen significant levels of growth. I will give some detail as we go along, and you can ask questions.

Relative to what we might be contributing economically is the potential that we can contribute over time. The industry will not exist, develop, grow and deliver economic benefits unless it has the infrastructure to do so. There is a large talent base that is more interested in writing and arranging songs and music and presenting it on stage than it is, necessarily, in making money from it. An industry is only an industry if it has an economic dimension, and those talented musicians and singer–songwriters who are part of the industry need support from a commercial perspective if they are going to make that economic opportunity work for them.

Essentially, that means that we need to develop three issues. There is no economic opportunity if there is no intellectual property — songs, tunes or arrangements — and if there is no physical product to take those arrangements to the audience. If creative development is not supported, there will be no music industry. However, once a way has been found to support that creative development, there must be business skills that will take the industry forward. Those business skills cover a wide range of activities — everything from marketing and publicity at the front end to the provision of artist management services, recording facilities, and so forth, at the infrastructural end. It is our intention to try to find ways to ensure that those services are delivered.

The arrival of the Internet fundamentally changed the basis on which music is delivered to the marketplace. Previously in the UK, if people wanted to make money out of music, they went to London to find an artist manager and a record label, because all the major players were based there. Only occasionally has that situation changed. At one point in the 1970s and early 1980s, Manchester took over from London on the back of the bankroll and interest of one individual who set up Factory Records and the Haçienda and made the most of opportunities in the Manchester area. However, that disappeared over time.

We are trying to stop the drift to London. We believe, along with the regional music sector across the UK, that regional opportunities can be delivered that help to develop an industry. However, that cannot be done if the infrastructural services are not there to provide that opportunity. Even with the arrival of the Internet, there must be a mechanism and an understanding that helps artists make the Internet work for them.

The do-it-yourself approach to the development of the music industry has arrived, but it will have a role only if there is an infrastructure to support it. When the business and creative-development infrastructures are working, the artists must be taken to the marketplace.

The third aspect of the development of the music industry that must be tackled is the marketing of Northern Ireland’s artists at various international trade fairs. Brought together in a central strategy, those three elements are required to deliver the development of the music industry.

We are proud to say that the UK Music Sector Forum, which is the representative body for all the regional organisations that are involved in the development of the music industry, having studied all other strategies, selected ours to be used collectively by all organisations. At least we have that endorsement that we seem to be getting things right.

Against that background, we are anxious, ready, willing and able to support the various elements in the industry. It would have been inappropriate for us not to comment on the arrival of the Oh Yeah project. When the news broke, and at the behest of the industry, we took it on ourselves to sit down internally and examine the impact on all the existing businesses and on the potential for development.

It must be recognised that Oh Yeah poses a genuine threat, specifically that of job displacement. The music industry is relatively small, and all the companies have been created on the back of individuals’ personal investment. If the market were to be distorted through the provision of grant aid that, in turn, was used to subsidise prices that other people were charged for services that they were offered, their investment would be put at risk

We are still responding to the first version of the Oh Yeah business plan and have not seen any subsequent versions. We know that they exist and that some commercial aspects have been removed. Perhaps, therefore, we are discussing an issue that has gone away. However, the principle holds true that when this, or any other project, comes along, we must support the guys who made the investment until, we hope, their investment pays off and the support that we need from the industry has increased.

Subsequent to our comments, we understand that the recording sector rightly decided to comment itself. More recently, some individuals who work in rehearsal studios made the same comments. From start to finish, we have said the same thing. There must be development, but it must not impact negatively on existing businesses and, therefore, must not be allowed to distort the market.

Oh Yeah is not entirely negative, and we recognise and support its positives. It would be pretty silly for NIMIC, supposedly the sectoral lead body for music, to stand up and say that music should not be funded and that musical projects that support the growth of the industry should not be helped. That is not our position. We are asking you to note issues that could get in the way of the industry’s development by impacting negatively on existing businesses.

Equally, we ask you to note the positives. We firmly believe that the development of a focus on music through the creation of such a music centre is a powerful statement and coheres with the Programme for Government’s focus on 50% growth in the sector and the development strategy that is set out for digital content.

Those aspects of the centre that relate to musical heritage and music’s fundamental contribution to the culture of Northern Ireland must also be noted. The opportunity to develop cultural tourism, to which music is fundamental, is rapidly increasing. We want people to see where music here comes from, what direction it is taking and to engage with it. We fully support Oh Yeah’s proposal to be involved in that.

The aspects of the proposal that relate to the development of all-age access to music performance are positive. It is a fact of life in the area of contemporary music that most opportunities are provided in bars. Kids under 18 years of age cannot access that music. That is not fair to them or to the artists. NIMIC wants to see more support for all-age gigs. Some promoters specialise in all-age gigs, and we would not like to see their commercial opportunity taken away through competitive distortion.

We wholeheartedly endorse the social, community and youth arts practice opportunities of the project. Music makes a significant contribution, and we want that to go further. Oh Yeah is not the only project that is impacting on the development of a music industry in Northern Ireland, and, alas, it is not the only negative. I am sure that you have recognised that I said that there are lots of positives to the Oh Yeah project. We are concerned about the further education sector’s output; it churns out lots of well-qualified students. However, it is churning out those students into a marketplace that does not exist. Opportunities must be developed so that there will be jobs for the young people when they leave college, and we want more balance and integration with the development of the sector in that work.

We have the same issue with Creative and Cultural Skills. We want to develop a strategy that has the potential to run far ahead of local industry’s development to make use of the council. We are positive about the further education sector and Creative and Cultural Skills, but we must ensure that their work is balanced. In that regard, we want to flag the developments on dormant bank accounts legislation in the United Kingdom. The Live Music Forum has been working with the Department for Culture, Media and Sport to ensure that the development of music regionally across the United Kingdom receives investment if the legislation goes through. It is hoped that we will receive any available support and that that support is spread across all of Northern Ireland.

We want Northern Ireland to access everything that is positive about music industry development, and there is much to be extracted from the existing initiatives. The Department of Culture, Arts and Leisure should be allowed, encouraged and cajoled to take the lead in negotiations with the Department for Employment and Learning, the Department of Education and the Department for Culture, Media and Sport to ensure that any new initiatives will be placed in the context of the industry’s current level of development and its long-term potential.

Northern Ireland can benefit significantly from the creative industries. Music takes the lead for most people, and we are content that music’s hard-won status as a creative opportunity that will deliver economic benefit to this country can be moved forward if the correct strategy is used and if a cohesive, collective approach and collaboration is employed. We support the positive elements of the Oh Yeah project and those that contribute to youth, community and social development. We look forward to a time when support is given to the development of the industry to help the recording- and rehearsal-studio sectors and other commercial elements to deliver positive responses and economic growth.

Mr Dale Aiken ( Northern Ireland Recording Studio Association):

The Northern Ireland Recording Studio Association represents about 75% of the commercial recording and rehearsal studios in Northern Ireland. We recently introduced to the fold some rehearsal studios and, thus, we represent them now. Recording studios supply a variety of music and non-music-related services to their clients. We provide traditional recording services, where bands come to the studio and are recorded, and, subsequently, their music is released. We also provide audio enhancement for businesses for use in legal cases, industrial disputes, verification of recording integrity, advertisements and jingles.

There is more to recording studios than recording artists. We do music production, including Irish traditional, rock, country, metal, Ulster Scots and through the whole range of genres — we produce music that is released and listened to by everyone here.

We are also involved in CD and DVD manufacture, to include DVD authoring and enhanced CD generation, music-related printed products, T-shirt printing, merchandising for the music business, system hire and installation, co-ordinating session musicians and music video production. Recording studios do a lot in addition to working with and recording bands and artists.

We are also involved in the business arena. Intellectual property policing is a growth area in the music business, which involves chasing the copyright for the ownership of music and video productions. Members will probably have heard of You Tube, and other similar sites around the world, where videos and music are accessed and copyright is infringed. For example, on one of the torrent sites that we police, there were 35,000 free downloads in one day of a movie that had recently been shown in cinemas. Therefore, copyright was infringed 35,000 times, which equates to 35,000 potential cinema tickets or DVD rentals that were lost. The people who downloaded that will want free access to the next big movie or best-selling album that is released, because it becomes public knowledge that they can be accessed for free so there is no point in paying for it. Why should production companies produce those films and music-related products if they are going to be given away for free? Policing that is a huge growth area in the music business.

NIRSA members have worked with artists and creative industries around the world. Countries that we have exported our work to in the past six months include Austria, the USA, France, Italy, Hong Kong, Germany, Australia, Cyprus, Canada, South Africa, Singapore, Poland, Switzerland, Spain, Norway, Belgium and even Kenya. In the USA, we have worked with business and creative industries in every state, and, at different times, in Canada and Australia on different projects. A recent order was placed to a NIRSA studio from Chile, paid for by the United Nations in New York, and the project was delivered to Portugal. Why would anyone in their right mind approach a recording studio in Northern Ireland for a project like that? Somewhere along the line some of the studios in Northern Ireland are doing a good job. Recording studios in Northern Ireland are guilty of one thing and that is not blowing their own trumpet and shouting loudly about how well they are doing in the international market. We tend to put our heads down, do business and not shout loudly about it, which has been to our detriment in Government funding policy. NIRSA members also work daily with creative industries throughout the UK and Ireland.

That is the good news on what we do. Working outside Northern Ireland is the easy part; we have a wealth of local talent and compete effectively on the world stage. The local music scene is a completely different environment. The recording sector in Northern Ireland believes that Government funding decisions are the biggest threat to sustainable growth of the local recording and rehearsal industry. We do not believe that another large publicly funded music charity is the best way forward for the music sector in Northern Ireland; we already have many publicly funded centres that are dedicated to letting people use their facilities.

Oh Yeah, and all similar centres, are self-promoting by nature; the centre will promote its own facilities above all others, because it is in its best interests. If a centre has a studio in its building, it will promote that studio because it either belongs to the centre or it is receiving rent for it. Therefore, there is no need for them to promote any other studio in Northern Ireland. Public funding is going to those centres, and they are promoting their own facilities — such as rehearsal space or a coffee shop — as it is in their best interests to do so. All badly thought-out funded projects have damaged the commercial sector’s ability to trade and reinvest in the facilities because of the lost revenue that has gone to those publicly subsidised projects.

Basically, we are paying rent, rates and tax to Government, and Government are then giving that money back to publicly funded studios that are competing directly with us. There are many examples of studios that are publicly funded that compete directly with us.

The Oh Yeah project has driven a further wedge through the music industry in Northern Ireland. The commercial music sector and the subsidised sector in Northern Ireland are at loggerheads, and bridges need to be built to encourage both sectors to strive to complement and enhance each other’s efforts. The commercial recording and rehearsal sector feels that it is under attack from Government, and steps must be taken to reassure this vital creative sector.

I will give some examples of funding decisions and their impact on local businesses. Why would any entrepreneur open a new recording studio in Armagh, for example? Local government has opened one already. The AmmA Centre is staffed and paid for with public funds. It not only provides recording facilities but CD and DVD duplication and printing services. If public funding were withdrawn from the AmmA Centre, it would collapse, just as all previously publicly subsidised recording facilities have done. It might be suggested that the AmmA Centre is educational, but that is not true. It is a publicly run facility that competes directly with local studios.

Another publicly funded studio is Madd House Studios in Antrim, which is run from council premises. The services that it provides place it in direct competition with Einstein Studios in Antrim, which is a private commercial studio. The proprietor of Einstein Studios was approached before Madd House Studios were opened and advised that the facility would be educational and would not impact on his business. Einstein Studios helped in, and advised on, the development of that project, in the belief that the services at Madd House Studios would be purely educational. Sadly, that turned out not to be the case. The proprietor of Einstein Studios commented:

“When this facility eventually drives me out of business no one will care much. My studio will be another statistic on a Government report. I feel pretty angry about this.”

Further evidence of the health of the music sector in Northern Ireland was demonstrated at the recent Music Ireland trade show at the RDS Arena in Dublin. Only one company from Northern Ireland was there — the Novatech AV digital recording studio in Newtownabbey. The studio said:

“It was a pretty depressing situation for us to realise that we were the only facility from the North doing business at this premier trade show. But doing business in the North is a deeply depressing activity. Everybody is looking for the Government to pay for their projects. 90% of our turnover is generated outside Northern Ireland and that’s the only reason we are still in business.”

NIRSA members believe that Northern Ireland Screen, formerly the Northern Ireland Film and Television Commission, may be a more suitable funding and organisational model for the promotion and development of the music sector in Northern Ireland. That organisation works with, and through, the existing industry and has proved successful. Northern Ireland Screen does not compete directly with the industry. It is there to support and encourage it. It promotes the use of the commercial facilities that are already established. It also funds and encourages public-sector projects that complement the industry.

NIRSA members believe that the new Administration in Stormont is now in a position to reverse the old tired policies of funding public projects that destabilise and discourage private enterprise in the music sector. The old policies have led to a grant mentality. Large areas of the music sector feel under siege from the public funding policies. NIRSA seeks to work with the new Administration in reversing that trend and promoting private enterprise and sustainable job creation. The public and private sectors would both benefit from a thriving music scene in Northern Ireland. The continuing alienation of the commercial sector must be halted, and policies must be put in place that encourage established businesses to expand and develop to an international standard.

We have consistently asked the Department of Culture, Arts and Leisure for a meeting to be set up between NIRSA, NIMIC and Oh Yeah, and to include other industry sectors if possible, so that we can come to an agreement on the best way forward for the sector. We put that to the Minister, Edwin Poots, at a recent meeting, and he indicated that he would help to facilitate that. We ask the Committee for Culture, Arts and Leisure to help to bring that meeting about as a matter of urgency.

NIRSA is in broad agreement with NIMIC on the best way forward for the music industry in Northern Ireland. We welcome the opportunity to answer any questions that the Committee might have.

The Chairperson:

Thank you, Dale.

Mr P Ramsey:

As someone who has had no contact with Oh Yeah or the organisations represented here, it is reassuring to hear a presentation from them. As I said earlier, I hope that Oh Yeah will be given an opportunity to make a similar presentation.

I agree with what has been said; it is important that the private sector takes the lead in the creative industry field. One only has to look at the successes enjoyed by small businesses in Galway, which were triggered by public-sector investment. Without public-sector involvement in my constituency, we would not have had the Nerve Centre, the Verbal Arts Centre or City of Derry Airport. The private sector would not spend the money. However, those ventures have created a range of job opportunities for displaced young people. Young people need more opportunities to develop skills. I say that because you are pushing all the right buttons for me.

However, having listened to both presentations, I am confused. John was very positive; he could have been an ambassador for Oh Yeah as he outlined the positive advantages of the project, particularly in relation to the social and community involvement of young people in the creative industries who can produce the social capital that we all want to pursue. He also said that his concerns about the Oh Yeah project might already have gone away. I accept that, because I do not know much about Oh Yeah, but if it encourages greater involvement of young people who have not been through mainstream education and gives them greater employment opportunities, it is doing a good job, and I would support it. I am uncertain about the overall concerns that have been expressed. If the recording studios are saying that 90% of their work comes from outside Northern Ireland, what impact could Oh Yeah have?

I have some other questions. The unfortunate thing is that we do not know what the people from Oh Yeah will say. I am not sure if they are even here today; I have never met them or talked to them on the phone or otherwise. I want to go back to the original proposal that I made and reinforce it. Both organisations represented here are doing tremendous good work, but, having listened to the presentations objectively, I think that the young people with new insights and ideas are, perhaps, giving these organisations a kick up the ass and challenging them. It might be good for NIMIC and NIRSA, because there are younger people coming through.

I do not know whether Oh Yeah is a good idea or not, because I have not heard from that project, but I want to. There is good work going on, and, as part of an inquiry into the underfunding of the arts, for example, it is important that, at some stage, the Committee should visit private-sector ventures across Northern Ireland. They are doing business in every state of the USA and promoting this area, which is fantastic. However, we are faced with conflicting reports. Dale is adamant that Oh Yeah is having a serious impact. I do not know whether that is the case, because he has not explained it. On the other hand, John says that Oh Yeah is fantastic. I am going to sit back, but I want to hear what the people from Oh Yeah have to say.

It makes sense that, if people are doing similar types of work, there might be a displacement or a loss of jobs. It was mentioned in one of the presentations that up to seven jobs might be lost, but that statement was not qualified. Let us look at NIMIC’s covering letter, which states:

“Oh Yeah has revised its business plan in order to take account of the commercial sensitivities”.

It appears that NIMIC has met people from Oh Yeah, who have listened to NIMIC in a constructive way and revised their plans. I imagine that they want to work with NIMIC collectively, so that the industry improves and more opportunities are created. The Committee should hold back until we hear from Oh Yeah.

Mr Brolly:

My question relates to the issues that Pat has raised. How do you envisage the commission having an association with publicly funded projects such as Oh Yeah? There is no way that we can introduce legislation to ban such projects, as they will happen anyway. How can you accommodate them, and how can they accommodate you?

I contacted the Nerve Centre last week to get copies of old tapes transferred to DVD. I have no predilection for any particular group — I simply looked up the Yellow Pages. Many organisations do similar jobs, and we cannot prevent that. Normally, we are very supportive of community enterprises. John made the point that he would like to sit down with those people, but I cannot see any resolution.

On a different question — and this is about your remit as the Northern Ireland Music Industry Commission, of which I should have heard — you mentioned many elements of the industry, but you did not mention royalty collection, which is separate. Have you thought about setting up our own royalty commission business?

Mr Edmund:

Yes, we can give you a firm answer on that. I will start with the Nerve Centre, because it is a jolly good place to start. I was involved with it in the early days and helped to put some structure in place, and Ross sat on the board of the Nerve Centre for six years. We are familiar with what Marty, Pearse and the boys and girls do there, and we are supportive of their work.

Dale will comment on the impact of Blast Furnace on the professional recording sector in the city. We are supportive of the social, community and youth arts function that Oh Yeah provides. However, we are concerned about what might happen to companies already in the industry if there is competitive distortion caused by grant aid subsidising recording prices, the provision of rehearsal space, and so on.

The dichotomy is that the industrial development side, and the social, community and youth arts side, are two different things. They have to interface, but they start at different points. We need a positive educational system that provides music education in schools. We need a positive youth arts system, taking that positive base to start, contemporising it and allowing young people to come through and engage so that they can identify careers and find it useful from a social and community perspective. At that point, the industry must take over, so that those who want a career can push ahead and become recording artists or songwriters, ready to become recording artists, bands or traditional groups — we have to include pipe bands, because they are a personal favourite of mine, and we have some very good ones — and we also want to include the classical music sector.

We have more young individuals taking classical music training than any other group. Many of them go on to university elsewhere, with the intention of becoming performers. Some of those students fall into small ensembles, which offer a commercial and economic opportunity in the same way as orchestras and soloists do. We are as content to support them as we are to support rock bands, indie bands and the rest. It is about supporting difference, supporting the youth arts community and social development side and recognising the fact that there could be a negative impact on the development of the industry, at least as far as established companies are concerned.

However, here is the rub; in due course, as the sector builds, opportunities build. The more opportunities there are, the more need there is of professional services. That, in turn, will generate new opportunities that go beyond the existing industry’s capability. We are not there yet. When we reach the point where we need more support mechanisms, we will be the first people to scream that we need them.

We already have an issue with a lack of artists’ managers. We are encouraging young people — and some older people — who are involved in the music industry and who want to find a career to think about that area. In the same way, we are encouraging one or two individuals to pursue careers in music PR and marketing.

We are reluctant to say that we spot talent, promote the winners and keep on pushing. However, there is a need to do that. We want to get behind the people who are really committed and dedicated and who want to make their careers happen, and we help them to do that. It is the same on the artistic side. We could give the Committee chapter and verse about a band that has six record labels looking anxiously at one another to see which one will sign them up first. We could tell you about 2005 and 2006, when four major artists from Northern Ireland signed contracts and brought about £1 million of inward investment as a result of their first deals. Over time, such deals offer significant long-term opportunity. Those are two sides to the issue.

As far as a royalty collection agency is concerned, intellectual property is the rock on which economic opportunity is built. Songs, tunes, their arrangement and even modern arrangements of traditional tunes are considered to be intellectual property and are eligible for royalties. There are two primary royalty collection agencies: the Performing Right Society (PRS), which is GB-based and covers the whole of the UK and abroad; and the Irish Music Rights Organisation (IMRO), which is based in Dublin. Although IMRO was started specifically to support Irish artists, its roster operates outside the island. Ross can give you chapter and verse on the difference between the two. Two other large agencies are based in the US.

All the agencies work together in a way, because companies must rely on the regional collection agency to recognise that its artists have been on its local radio stations and collect the money and pay it back. Around the world, the collection agencies transfer money back and forth in support of individual artists. For example, our agencies do that for Icelandic artists, and Icelandic agencies do the same for our artists.

The issue for the artist is how much of the money that they get back is absorbed by the cost of collection. The principle is that the bigger the organisation, the lower the cost. PRS is relatively huge in comparison with IMRO, so its costs per artist are relatively low in comparison with IMRO’s. The American agencies are larger again, and the same principle applies. The problem with the establishment of a collection agency in Northern Ireland is one of scale. The cost of putting an organisation together to collect royalties will take too much of the money that should go to the artist. Artists would look at that and say, “Why would I go with you?”

It is a question of timing. It would be nice to have our own collection agency in due course, and then the NIMIC could say, “What about some money for us?” However, the time is not right for that.

Mr Lesley Hume ( Northern Ireland Recording Studio Association):

Chairperson, if you do not mind, I would like to answer a point that Mr Ramsey raised about Oh Yeah offering the facility for people to learn certain skills. I would have to ask where those people are supposed to go thereafter. In my business, I am involved with education, and I am concerned. The South Eastern Regional College is on my doorstep. People buy musical instruments from my shop and, occasionally, they come into the studio, because I also sell recording equipment. I give people my time. For years, kids came to us on work placement through their schools and colleges. We reached a point where we could no longer sustain that, because our business could not spare the time.

Part of our concern is that there must be more joined-up thinking about how the whole process works, from when kids enter school, go to college and enter business. At present, the association’s concern is that that is fractured. The problem will not be solved by simply putting another centre in place in the hope that it can.

Mr K Robinson:

Can I have clarification on the comment that the further education sector is churning out students for a market that does not exist? What market is that? Is it the general music market?

Mr Hume:

I refer only to the recording-studio sector specifically, given the fact that the sector is currently self-financing. Twenty-plus years ago, I approached the Government of the time for funding. I was given the task of researching all that. I went to the Local Enterprise Development Unit (LEDU) at Galwally to find out all the information. I was told that the market was saturated, yet I still went into it. Twenty years later, I am still in the market. However, more public Government money is being put into a programme that threatens my existence. For example, I can no longer pay my engineer. I am going back to that tool myself, yet I still need to diversify.

There is no question that the recording-studio sector can grow. I see that when people come into my shop to play and buy instruments. We encourage them to do so. As John quite eloquently put it, the entire music industry must be developed, but not in piecemeal fashion.

Mr Shannon:

I seek clarification on the figure that John mentioned earlier for the turnover each year for artists. Is it £5 million or £5 billion?

Mr Edmund:

It is £5 billion.

Mr Shannon:

Are exports worth £1·3 billion?

Mr Edmund:

Yes, they are. The industry provides 120,000 jobs.

Mr Shannon:

Is that UK-wide?

Mr Edmund:

Yes, it is.

The Chairperson:

The Committee would appreciate a copy of the NIRSA presentation, Dale, in due course.

Mr Shannon:

I will try to get through my points as quickly as possible, as the meeting is on a schedule. I believe that John mentioned bands. The fact that some of those bands are now household names is an indication of the good work that has been done to encourage them. Does NIMIC actively scout for new bands to encourage, or do their agents contact NIMIC? How do those bands get on the first rung of the ladder?

Dale mentioned that some of his business turnover comes from bands. I am curious to know what the market figures are for Northern Ireland. I am conscious that there are only 1·7 million people here and that, therefore, the music industry must look beyond Northern Ireland. I am also keen to know what work NIRSA does with newspapers, for example, on the CDs that they sometimes include. Is it involved in that type of business, or is that a venture that it might consider?

Is it possible for the industry to work alongside the Oh Yeah project? Can there be a meeting of minds in order to bring both parties — the industry and the Oh Yeah education programme — together, hand in hand?

Mr McCausland:

I want to make some comments and would be interested to hear the witnesses’ responses to them. At present, I have no sense of the nature, diversity and structure of the industry in Northern Ireland: how many recording studios there are; where they are located; what sort of turnaround they have; how many people they employ and in what kind of jobs, and so on? How many people are involved in the sale of musical instruments and in other areas of the music industry? That would be a useful starting point.

Lesley mentioned that there is potential for growth. I am picking up a sense that there is no strategy for the music industry in Northern Ireland. A sports strategy has been developed. If there is a significant sector — which the music industry seems to be — I would have thought that the onus is on the Department of Culture, Arts and Leisure to take the lead, possibly through NIMIC or another body, in order to develop a strategy for that sector. Rather than rush into setting up projects and making changes and alterations, there should be a context for decision-making and policy-making.

Having said that, I know nothing at all about the Oh Yeah project so I do not want to get into a discussion about that initially. The issue is to get a strategy. The one caveat I put on that is that too often it is decided that £250,000 will be set aside and a company such as PricewaterhouseCoopers, for instance, will be asked to develop a strategy. We have already seen that with museums, which are now under the responsibility of the Northern Ireland Museums Council, a body that was in place all the time. Such a body has people who know about museums, so why pay international consultants large sums of money when there are local people who have the knowledge? The consultants ask you what you want them to write anyway. I suggest that one of the key priorities, along with meeting the Minister and the people from the Oh Yeah project, should be the creation of a strategy to develop the music industry for the economy of Northern Ireland.

Mr D Bradley:

As was mentioned earlier, there are similarities between the film industry and the music industry. Although it is not comparing like with like, Northern Ireland Screen appears to be a good model to follow. It seems to facilitate the professional industry and allows and encourages newcomers. I know that public funding is available and that we will consider the Irish-language broadcasting fund later today. Some of you said that you wanted to explore the use of the film industry model as a possible template for the music industry. I do not know whether it is possible to have a strategy for the music industry as it is in sport and other areas, but the model that is used in the film industry seems to incorporate a strategy and allows the entire sector to develop. I am in favour of the Committee encouraging the exploration of a similar type of template followed by Northern Ireland Screen for the music industry.

Mr McNarry:

There is a degree of ignorance on this subject, and it is only right that those of us who feel that way admit to that so that we can move on. It may be that the introduction of the Oh Yeah project has contributed to a debate that might never have taken place had it not come on the scene. We might not be having this meeting if it were not for the Oh Yeah project.

One of the CDs that has been issued to Committee members was compiled and produced by the Northern Irish Music Industry Commission, and it is for promotional use only. How much does it cost to compile those CDs, and what is the extent of the promotional use? The other CD was compiled and produced by the Arts Council of Northern Ireland and the Northern Irish Music Industry Commission. The Arts Council is repeatedly knocking on our doors for money, and it usually gets a good and fair hearing. The CD is for promotional use, but who is NIMIC promoting it with, what are the outcomes and benefits of that and how much does it cost? I am pleased to say that I know the names of some of the artists that appear on those CDs. However, I do not have a clue about a lot of them, because their names are in a foreign language. However, that is neither here nor there, and I will judge their music when I listen to it. My questions are important, because I need to know what the Northern Ireland Arts Council’s involvement is in that promotion. We find that, on a number of occasions, people ask for financial support while getting it through other doors.

In the Minister’s letter to the Committee Chairman on the Oh Yeah project, he says:

“The Department currently has a number of other arts infrastructure capital projects on-going”.

Now you may be aware of that. However, I was not — until I read the letter. The Minister continues:

“which have developed business cases and been subject to the economic appraisal process.”

Does that mean that there are companies other than Oh Yeah out there? Are those companies talking to the Department, and what are they talking to the Department about? In that case, if we are now enthused about the project — we are listening to the witnesses and we will hear from Oh Yeah — may we ask the Department to tell us about the other arts infrastructure capital projects and on what their business cases are focused. What is the result of the economic appraisal, and what is the Department doing with it? It seems that Nelson’s point is relevant — that there seems to be some kind of strategy in the Department and, perhaps, that we should know about it. It would be useful if there were a strategy. I would be grateful if the Committee would support that request. I am also keen to see what the relationship is with the Arts Council.

The Chairperson:

Will John, Dale, Lesley and Rosssummarise the issues and deal with the questions at the same time? I know that that is a tall order.

Mr Edmund:

We thank members for their questions. The questions form a strand that is about the current state of the industry and about the future. I will address those issues as one question. I will answer, specifically, the two straightforward, direct questions. Members asked about how marching bands become involved. We have found that individual bands use the production of CDs as income generators.

Most of the major bands will find their own recording studio. The Field Marshal Montgomery Pipe Band has its own manager, who will secure support from a record label in Scotland. The recording company will book a studio and record the band, after Richard Parkes has marched them up and down various hills and flogged them to within an inch of their piping lives. That is why one gets results. The process tends to be the same across the entire marching band sector, which includes flutes and other instruments. If they wish to do so, they use the recording of CDs as income generation.

There are two aspects to working with newspapers. The main promotional medium for gigs in Northern Ireland is the ‘Belfast Telegraph’. We want to ensure that the paper promotes Northern Irish artists who are appearing in shows, whether large or small. Therefore, we speak regularly to employees of the paper. We make a point that, when we are taking part in international events, we include local newspapers, radio stations and any other specific promotional opportunities with individual fairs, trade fairs and events that we attend. We have had international media coverage for several of our functions.

Last year, we had the opportunity to provide artists for the Rediscover Northern Ireland programme. Our artists took part in a number of events in Washington, DC. All those events were covered by the media, which included national public radio; various local FM stations in and around Washington, DC, and on a host of websites. They all talked about the quality of new contemporary music from Northern Ireland.

After we had completed that event, we were able to take 10 artists to New York to do a specific industry showcase. That is where the difference can be seen. We are trying to take an industrially centred focus on activity. Therefore, rather than target the main media, we target the individuals who sign the cheques. Much of our effort is not directly aimed at recording companies, record labels, individual artists, managers, tour managers and promoters on the basis that if we put artists in front of the guy who is going to sign the cheques, perhaps he will sign them when they are present.

We took up a specific international print media opportunity towards the end of last year. It involved a cover mount with a magazine, ‘International DJ’, which is the biggest international dance music magazine in the world. That is perhaps what members were thinking about. Its September/October cover mount featured new dance music from Northern Ireland. We had financial support from Belfast City Council, of which we were very appreciative. We have had a significant response to that feature. Several of the artists who were featured have been in negotiation with international promoters about work opportunities.

I now turn to the issue of the size of Northern Ireland’s music industry and a long-term strategy. I once trained to be an economist, so wearing that hat, I must say that until we have carried out the research, we cannot know how big the industry is. No later than last Friday we tramped through the snow for a discussion with Professor Richard Harrison at Queen’s University Belfast to ask him if he would develop an economic research model that would tell us how big the industry is. We are expecting him to get back to us this week with a proposal, with a not inconsiderable price tag attached. It will then be our job to find the money from wherever we can. Our first stop will be Invest NI. It has indicated that it might be interested, because it obviously helps with the digital content strategy and the issue of tackling music as an economic opportunity.

Mr McNarry:

Why do you have to pay for it?

Mr Edmund:

We have to find the money for it.

Mr McNarry:

Why? Surely it is important for Government to know that information. Why do you have to pay for it? What are Government saying to you? They can tell us how many beds were needed for a MotoCross event that went belly up — 7,000 or so beds, they said — and the effect on the economy. Why can they not do the same thing for your industry?

Mr Edmund:

We are hopeful that they will. We will certainly ask.

Mr McNarry:

Nelson already mentioned going to PricewaterhouseCoopers for consultancy work. You are doing exactly the same thing by approaching those academics. You are going to get a big invoice for information that they will provide by asking the Government sources. It does not make any sense.

Mr Aiken:

They will be at our door asking us what we think.

Mr McNarry:

You are telling us that you do not know the answer.

Mr Ross Graham ( Northern Ireland Music Industry Commission):

I think that, collectively, the industry would be approached by whoever carries out the research.

Mr Aiken:

I want to return to Pat’s point about the positive studio situation. That is not at all what we were saying. The situation is not positive at all. It is positive about work outside Northern Ireland; we were basically talking about the Novatech AV studio in Newtownabbey, which has contacts outside Northern Ireland.

Let us make no mistake about this; the industry in Northern Ireland is a nightmare. It is a complete and utter nightmare trying to do business as a recording studio in Northern Ireland. We are saying that directly to you guys. How do we compete with studios that are funded or a community project that is given £1 million to open up recording facilities and rehearsal spaces? Those facilities are already there; businesses are already trying to make money and employ people and be fair. If you are going to open up facilities that are funded by Government, how can we compete? Do you think that anybody at this table can compete with a £1 million grant? We cannot compete with it — we simply cannot do it. If you guys are considering giving money to other projects because it all sounds well and good, what are you saying to us? Are you saying: “Shut down your facilities because we want to replace them with Government-funded facilities”? If you are saying that, give us the £1 million each. We could do a lot with a capital investment of £1 million in each of our facilities — particularly in a new villa in the south of Spain.

In all seriousness, if you are going to give this facility £1 million as a capital grant, what are you saying to the private sector? Are you saying: “Compete with them anyway, because we do not care”? Is that what you are saying to us? Do you want us to employ people? When these people come out of the community sector —

The Chairperson:

Dale, I think that you have some misunderstanding of where we as a Committee fit in. If you are addressing the Department, address the Department, but do not mistake us for the Department. I would ask that you consider the manner in which you speak to the Committee.

Mr Aiken:

OK.

The studio sector is in dire need of Government understanding, and, up to this point, there has been no understanding. It seems that if it is a community project, it is seen as a good project. The commercial sector is viewed as something that may be a little bit dodgy because it is trying to open up our facilities to be creative and to help the cultural environment in Northern Ireland and also to pay wages and mortgages. That is what we are doing.

We already compete with many facilities, including the Nerve Centre, the Oh Yeah project, the AmmA Centre and the Strule Arts Centre. Therefore, if the funding is not capped, how can we be expected to be creative and to survive in that environment?

We have suggested to Oh Yeah and to the Minister, Edwin Poots, that we all work together instead of being at loggerheads. We approached people in Oh Yeah and said that we wanted to work with them as an organisation. In its last communication with us, it said that it did not want to work with us.

We have said from the start that NIMIC, NIRSA and Oh Yeah should work together. The community sector should work with the commercial sector, and we should compromise. Everyone may not be happy with such a compromise, but it would enable us to get on with working. In working together, over months and years, we may come to respect one another, and it may result in a positive position. At the moment, everyone is at loggerheads.

The Chairperson:

Dominic, did that answer your question?

Mr D Bradley:

I was out of the room, but it did not.

Mr Aiken:

We agree that Northern Ireland Screen is the positive model that should be used as an example.

Mr McNarry:

Can we deal with the Arts Council? Now that I have heard what has been said, I want to know whether any of you boys have received funding.

Mr Aiken:

As an organisation, we have not received funding.

Mr McNarry:

Did you receive any start-up funding?

Mr Aiken:

We have never received any funding.

Mr McNarry:

Does that apply do everyone whom you represent?

Mr Aiken:

No, that applies to only Lesley and me.

Mr McNarry:

What about NIMIC?

Mr Edmund:

NIMIC is wholly publicly funded. It is supported by the Arts Council, and indirectly by the Department of Culture, Arts and Leisure, and Invest NI.

Mr McCarthy:

You said that you were also funded by Belfast City Council.

Mr Edmund:

We have received funds from Belfast City Council for individual projects. We have also received a small amount of lottery funding.

Mr McNarry:

You are promoters in a —

Mr Edmund:

All we do is provide industrial development support to the sector. We run a creative development stream and an industrial development stream that provides information on how to develop a music industry business, and that is provided to those who want to be on the business side of music and those who want to be artists and earn money from their music.

Mr McNarry:

I am keen that, somewhere along the line, we get our heads round this and are able to say that we support creative industry; that is important. Over many years, I have noticed that when people get a reputation — particularly in the music industry — they leave these shores. It is a similar situation to the brain drain of our young people. We want to try to turn that round.

As Pat said, we have not heard from Oh Yeah. We need to hear from them, and we need to find out more about what the Department is doing, to whom it is talking and when it is going to talk to the Committee. We seem to be — to use a pun — playing second fiddle while the Department beavers away. Perhaps the Committee should write to the Minister asking him to tell us what the hell his plans are for the next 12 months. That would enable us to follow and keep up with him.

The Chairperson:

“Second fiddle” is a suitable term.

Mr McNarry:

I did not use the word “pluck” in case Hansard picked it up wrong.

Mr D Bradley:

It is a change from beating the drum.

Mr McCausland:

As NIMIC is a promotional organisation and a representative body, can we also ask the Department to work with it to develop a strategy for the music industry in Northern Ireland, if, as appears to be the case, one does not already exist?

The Chairperson:

We are much more informed as a result of this session.

Mr Brolly:

There are many areas of life in which the private and public sectors are competing with each other. The construction industry and the Construction Industry Training Board serve as examples. It is unsatisfactory, but it has been going on for a long time. The witnesses have given me a possible lead into a particular area that I want to question about the private versus the public sector. I plan to use this example as a backup test case.

Mr McNarry:

Would you endorse the Programme for Government and the Budget on the basis that it will be economically driven, with a clear emphasis on increasing private development, money and enterprise? Those issues need to be carefully considered.

Mr P Ramsey:

David’s point is correct. Under the Programme for Government and the draft Budget, there is an aspiration that the creative industries are the biggest growth sector, but there is nothing in the Department’s budget for those industries. There is no acknowledgement of them.

Mr McNarry:

I am sorry to interrupt you, but there is a task force. However, if things go to plan and people report to us on every other thing, it will be next year before we hear about the creative industries task force.

Mr P Ramsey:

The Committee does not assess or process applications for funding. We simply oversee how the Department runs things, and the Committee can challenge it. There is a difference between a private enterprise and a social economy project, such as Oh Yeah. Therefore, we need to find out from Oh Yeah how it views the situation. It seems that there is not much difference between what Oh Yeah, NIMIC and NIRSA are doing. It makes sense for them to work together. However, the Department must take the lead and not be an absent landlord. We should ask the Department to take a more active role in promoting their working together.

Francie mentioned a royalty commission. In the light of today’s discussions, we must invite members of the Oh Yeah project and Blue Piano Publishing, which is promoting a royalty commission, to come before the Committee as soon as possible. The time frame for their attendance is May, but the invitations should be brought forward, given that we are discussing how we can strategically address the music industry. Let us do it holistically rather than separately.

Mr McCausland:

If we ask the Department to develop a strategy, the issue about the establishment of a royalty commission will inevitably feed into that. I am conscious of the fact that we have a great deal on our agendas, and the process of developing a strategy will not happen in six weeks or three months. It will be a significant piece of work. Therefore, in many ways, it would be better to direct them to that process.

Mr P Ramsey:

I take John’spoint that he does not believe that the establishment of a royalty commission would be financially viable, but the group that is advocating its establishment believes that it would be financially viable. It has been in discussions with the Department for the past 10 years, getting nowhere. The group believes that it is important to come before the Committee to highlight the issue.

Mr McNarry:

Before the Christmas recess, the Minister announced a cash injection to councils for festivals on a one-for-one basis. Jim Shannon is a councillor in my area, so he can keep me right on the figures. Between £18,000 and £20,000 will go to Ards Borough Council provided that they throw in a sum, particularly for festivals. Are you involved in festivals?

Mr Hume:

I have been indirectly involved, and I have helped some artists by lending them equipment. The payback for me is that my name will be mentioned.

Mr Edmund:

Until now, we have run one specific trade-focused new music event every year. We did not do it in 2007, because we did not have the money. Over one week, it effectively becomes a festival with 50 or 60 gigs taking place, but it is aimed at putting artists in front of the industry in a professional setting so that the industry can view how well the artists react to an audience and how it reacts to them. Internationally, we do the same thing. We do not get involved in festivals per se.

Mr Hume:

The festival that I was talking about is the Ards International Guitar Festival, of which I am a sponsor.

Mr McNarry:

It is a brilliant festival.

Mr P Ramsey:

You would probably get grant aid for hiring equipment.

The Chairperson:

Thank you all for attending the evidence session; it has been very interesting.

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