Key challenges facing the Night Time Economy

The Night Time Economy Summit brought together industry leaders, policymakers, and experts to highlight the industry's key challenges and provide practical solutions to ensure its long-term success.

The night time economy stands at a crossroads, with venues enduring one of the most challenging periods. These difficulties threaten both its sustainability and growth. However, without recognition and sufficient investment in the industry, these challenges will leave it scarred.

While recognition and appreciation for the sector have improved, the lack of sufficient investment and structural support continues to hinder its potential. Addressing these key challenges is crucial to securing the industry's future.

The sector still lacks proper recognition

There is no question that the night time economy plays a fundamental role in society. Valued at £153.91 billion in 2024, it remains a cornerstone of the UK economy. As a significant contributor to the country, the industry deserves greater recognition.

The Electronic Music Industry Report 2024 underscored the sector’s significance while also highlighting concerning trends. Despite contributing £2.4 billion to the UK economy, the industry saw 24 nightclub closures in the past year, 72 independent festivals cancelled, postponed, or shut down, and a 16% decline in club spending.

The report highlights its significance to the country but shows the need for meaningful investment and stronger backing for the venues and artists to drive this industry forward.

Closures will continue without sufficient investment

That need for investment extends beyond the electronic music industry but is a challenge that is facing the whole sector. Whilst saying this may sound like a broken record, the lack of investment is still a prominent issue. The need for proper investment was only amplified by the Autumn Budget, where businesses will have to face a further £650m in costs come April.

But no sector feels this pressure more acutely than grassroots music venues. With 125 grassroots music venues closing in 2023 and one shutting every two weeks in 2024, venues are now operating on a razor-thin profit margin of just 0.48%.

Joe Frankland from the PRS Foundation emphasised the urgency of investment: “It needs understanding that there needs to be a lot of investment in grassroots. It’s understanding the needs for the infrastructure and supporting an artist. It needs to be across the whole system.

“The way we go about it in this country is backwards in the progression of statutory services, we’re hamstrung here. But, look at where we were 10 years ago, we are streets away from the conversations we’re having today."

Without immediate action, more closures will follow, which takes away crucial performance spaces for emerging artists.

Lack of devolution is holding the sector back

The idea of devolution and shifting decision-making powers to local councils was a topic of conversation which dominated the Night Time Economy Summit in Birmingham. Currently, government intervention is minimal, but when it does occur, it often worsens the situation, for example, by raising National Insurance or cutting business rates. Localised decision-making could provide more targeted support, addressing the specific needs of different communities.

But without devolution, the sector is being held back.

This was echoed by Sacha Lord, who said: The sector needs devolution and more powers for the mayors. The power is becoming more local, and I’m such a big advocate for this. But parliament needs more devolution as the current system is broken.”

Even internationally, the issue is pressing. Freek Wallagh from Amsterdam said: “I’m an adamant believer that the lowest decisions should be made at the lowest level possible, as different areas and neighbourhoods require different things. There will always be gaps when the government is making decisions, and it’s about making sure local councils fill those gaps.”

Without devolution, the sector remains constrained by a ‘one-size-fits-all’ policy, which fails to address regional challenges.

Breaking through as an artist is harder than ever

Whilst it has become easier and more accessible for artists to create, record and upload tracks, the industry has become saturated. With 120,000 tracks uploaded to Spotify daily and the rise of generative AI, breaking through the noise and ultimately rising through the music industry has never been more challenging.

Additionally, the closure of grassroots music venues leaves fewer opportunities for artists to perform live, build an audience, and develop sustainable careers.

Chris Goss from Hospital Records said: “We are now in a world where we are obsessed with streams, but that doesn't mean anything when you’ve only got one viral moment. It’s about building a community and making a sustainable career.

“We are in an industry where we’re drowning in crap, and we are all competing for a small window of opportunity. It's about building a community and making a sustainable career.”