UK Music’s annual report released today (Wednesday) highlights how the sector is set to halve in size in 2020 as COVID-19 has wiped £3bn (£3.4bn/$4bn) from its contribution to the economy, with the live music industry being the hardest hit.

The umbrella organisation representing the commercial music industry in the UK has revealed in its Music by Numbers report that the industry grew by 11 per cent in 2019 to be worth £5.8bn to the UK economy.

However it is predicted that the music industry’s contribution to the wider UK economy, spanning music sales and licensing to stadium tours, gigs in grass roots venues and merchandise, is likely to fall to about £3bn this year. UK Music measures the industry’s contribution as gross value added, or GVA, which also includes British music exported overseas, such as through tours.

Jamie Njoku-Goodwin, chief executive of UK Music, said that the pandemic has dealt a “catastrophic blow” with tens of thousands out of the almost 200,000 people who work in the industry at risk of losing their jobs.

Njoku-Goodwin said: “Our music industry is a key national asset. As this report shows, it contributes £5.8bn a year to the economy, generates £2.9bn in exports and supports almost 200,000 jobs. The UK music industry was a vibrant, fast-growing and commercially successful sector before the pandemic hit.”

Live music – including festivals and music venues – has taken the hardest hit this year after experiencing its most successful year to date in 2019. Last year, the live music sector grew by almost a fifth to a record £1.3bn, and while it had been predicted to be even stronger in 2020, it will fall by 85 per cent. Live music’s GVA is expected to plummet to about £300m as touring halts and social distancing keeps most venues shut.

The report also says that music creators – which include global artists such as Dua Lipa and Ed Sheeran as well as tens of thousands of other musicians, songwriters and producers – who rely “very heavily” on live music, will have their income mostly wiped out this year. In 2019, music creators were estimated to have generated £2.7bn GVA for the UK economy.

The report said: “In aggregate over 65% of music creators’ income will be lost as a direct consequence of Covid-19 and this could extend to over 80% for those most reliant on live performance.”

The UK’s Minister for Digital and Culture, Caroline Dinenage, said: “The UK music industry is at the heart of our arts and cultural sector, which is the envy of the world. It is a key national asset and something that should make us all proud. Music enriches all of our lives, but it also makes a huge contribution to our economy.

“British stars helped drive exports up to £2.9 billion in 2019 – a 9% increase and a fantastic overseas calling card for Britain. Behind every artist, band and orchestra is an army of talented professionals who play their part in the industry’s ecosystem.

“However, we know what an immensely tough year 2020 has been for the music industry as a result of COVID-19 which has presented significant challenges for the sector.

“That is why the Government stepped in with an unprecedented £1.57bn Culture Recovery Fund to help the sector weather the impact of coronavirus and protect music venues, festivals, and our vital cultural assets.”