The UK Government published its Music Studio Market Assessment on 3 August 2021. The report assesses the state of the private, professionally-run music studio market in England.
Research was conducted between January 2021 and March 2021 when England was in a third national lockdown.
Key findings
2,482 studios were mapped - 1,858 open and 624 closed
The current studio market is concentrated in London and the South East with 44.9% (834) of all open studios
Rehearsal is the most common studio service offered alongside live music venues
Studio Supply and Client Demand
There is enough supply of music studios, barriers to entry are low and there are no signs of monopoly
The market is responding to changes, such as technological innovation, and to new competition
The challenge is for traditional studios to seek standards and sufficient added value to distinguish themselves from alternatives eg. offering artistic development services
Some studios have chosen to expand their business models into the audiovisual sector
Integration in the Music Ecosystem
The growth in digital music distribution has contributed to the disconnection of record labels and music publishers from the recording industry value chain
There is a reduction in record label budgets and in turn demand for studio services
There is a disintegration between the studio market and wider music ecosystem
Musicians perceived live music venues as the most influential stakeholders in their success, whilst studio professionals had an overall lesser importance
Studio Business Characteristics
Studios have diversified their business models due to new challenges such as COVID-19, but many see it as a means to increase revenue streams by introducing new services such as education and training
Studio service rates have declined and/or stagnated compared to 20 years ago
The studio market was financially sustainable prior to COVID-19, with an average annual gross income of £109.7k
Rehearsal studios were the most profitable (£132.4k annual gross income) given the number of rooms available and the versatility of clients and services
Governance, Regulations and Funding
The effects of COVID-19 are most visible in the reduction of studio service rates and workforce sizes, however, most believed they would recover within the next year
Rehearsal spaces have been the most vulnerable during COVID-19 as there is no viable alternative to a physical service and a greater proportion of operating costs for space rental
Studios have become highly dependent on government funding since the onset of COVID-19, which has been key to their survival (68% of surveyed studios applied/received support)
There remains a desire for better coordination amongst rehearsal studios and the wider sector as a whole
Rent and business rates make up the greatest proportion of operating costs (34% for surveyed studios) and have witnessed exponential increases due to urban regeneration and is seen as the primary cause for studio closures
The costs and continued uncertainty surrounding Brexit is expected to have a detrimental impact on the studio market eg losses of clients, studio staff and business development opportunities
Expansion and/or relocation to the EU was considered a viable option for some studios
The UK Government's Studio Assessment full report can be found below.
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