🚫 How The US TikTok Ban Will Affect The UK

📰 Industry News

Here's a roundup of this week's top headlines shaking up the UK business world.

• Meta, the owner of Facebook, WhatsApp and Instagram, is cut about 5% (around 3,600 staff) of its global workforce, warning of a tough year ahead. Zuckerberg, said he had decided to “move out low-performers faster”. (The Guardian)

• Frasers Group has confirmed that two-thirds (around 11,500) of its retail staff remain on zero-hours contracts ahead of new legislation aimed to limit their use. (Retail Gazette)

• The London Stock Exchange is preparing to do battle for one of Europe's biggest initial public offerings for years as Verisure, the domestic security systems provider, plans for flotation valuing it at more than £16.7bn (€20bn). (Sky News)

• Retailers have been left feeling pessimistic about trading conditions for 2025 as they prepare to increase prices in response to rising National Insurance costs, the British Retail Consortium has reported. (Retail Gazette)

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📀 UK Music Sales Hit Record High, But Artists Struggle To Cash In

Last year, Brits spent a record-breaking £2.4bn on music, with streaming subscriptions and vinyl driving a resurgence that finally surpasses pre-digital revolution highs. Yet, while the industry's revenues soar, many musicians are left wondering: where’s our share?

Streaming platforms like Spotify and Apple Music accounted for the lion’s share of revenue, while physical formats - led by vinyl - saw a significant bump in popularity. But behind these big numbers, we see a reality check: inflation-adjusted revenues are still lagging behind 2001 levels, and creators are struggling to get a fair cut of the pie.

Here’s a closer look at what’s happening in the UK music scene and why I think it matters.

The Numbers:

• Total Spend: Music revenues hit £2.38bn in 2024, a 7.4% increase from 2023.

• Streaming Dominance: Consumer spending on music streaming subscriptions grew by 7.8% to surpass £2bn for the first time - 85% of total revenue.

• Vinyl Revival: Sales grew for the 17th consecutive year, hitting £196m, up 10.5%.

• CDs Stay Flat: Revenues from CD albums held steady at £126m.

• Album Sales: Total sales hit 201.4m (streaming equivalents included), smashing a record set back in 2004, with Taylor Swift's The Tortured Poets Department leading the charge at 783,820 units sold.

• Physical Music Bounces Back: Overall physical sales increased to 17.4m units, the first growth in two decades.

Who’s Really Winning?

While these figures paint a rosy picture, it’s clear the party is far from inclusive:

1. Streaming's Unequal Pay Structure: Artists and songwriters continue to receive a meagre fraction of streaming revenues. Spotify, for example, pays between £0.0024 to £0.004 per stream, depending on factors like subscription type and region.

   To put that into perspective:

   • It takes about 250-300 streams to earn £1.

   • For an artist to make the equivalent of the UK’s current minimum hourly wage (£11.44 as of 2024), they’d need over 2,860 streams - and that’s before splitting revenue with record labels, producers, and distributors.

2. Touring Woes: Brexit-related hurdles and rising costs have made international touring more challenging than ever for UK artists.

3. Inflation Effect: Adjusting for inflation, industry revenues are still below 2001 levels despite today’s higher spend.

4. AI on the Horizon: As concerns over AI-generated music loom, the industry has yet to address long-standing issues around fair remuneration.

Why I Think It Matters

The UK music industry’s bounce-back shows how technology has transformed consumer habits - but it also raises bigger questions about sustainability.

• For Musicians: The disconnect between soaring revenues and stagnant pay highlights the need for reform. Without fair compensation, creativity and innovation could take a hit.

• For Consumers: The revival of physical formats like vinyl is a heart-warming throwback, but it’s clear the nostalgic glow isn’t enough to sustain the industry’s ecosystem.

• For the Industry: As streaming continues to dominate, the question isn’t just how to grow revenues - it’s how to distribute them equitably.

The UK music scene is undeniably thriving, but if the industry doesn’t evolve its economic model, it risks losing the very talent that fuels its success. While it’s great to see music back in the spotlight, the reality is bittersweet. The industry has cracked the streaming code, but until musicians are paid their fair share, it’s hard to call this a true success story.

🚫 How US TikTok Ban Affects The UK

I'm jumping the gun here - the ban isn't until January 19th - but let's face it, leaving it this late is cutting it fine. For argument's sake, let’s assume the ban goes ahead. How will it affect us Brits?

As the U.S. gears up to potentially ban TikTok over national security concerns, the ramifications are set to extend beyond American borders, notably impacting UK businesses and content creators who have leveraged the platform's vast U.S. user base.

A Quick Recap

The U.S. government has mandated that ByteDance, TikTok's Chinese parent company, divest its U.S. operations by January 19, 2025, or face a nationwide ban. This move stems from fears that user data could be accessed by the Chinese government, posing a national security threat.

Impact on UK Businesses

Approximately 1.5 million UK businesses operate on TikTok, with many targeting the lucrative U.S. market.

• Revenue Streams at Risk: Businesses like Perl Cosmetics, which derive up to 25% of their sales from U.S. customers via TikTok, face significant revenue losses if the ban proceeds.

• Marketing Challenges: TikTok has been a cost-effective marketing tool, especially for small and medium-sized enterprises (SMEs). A ban could force these businesses to seek alternative platforms, potentially increasing marketing expenses and reducing outreach.

Impact on UK Content Creators

UK-based content creators often boast substantial U.S. followings, contributing significantly to their engagement metrics and income.

• Audience Reduction: The U.S. accounts for about 15% of TikTok's global user base. Losing this audience could lead to decreased engagement and influence for UK creators.

• Income Loss: Many creators monetise through brand partnerships aimed at U.S. audiences. A ban would disrupt these revenue streams, compelling creators to rebuild their followings on alternative platforms.

Broader Implications

• Trend Disruption: U.S. users often set global trends on TikTok. Their absence could diminish the platform's dynamism, affecting content virality and relevance.

• A Payday For Other Platforms: A U.S. ban may prompt a user exodus to platforms like Instagram Reels or YouTube Shorts, intensifying competition and altering content strategies. And brands? They’ll be shifting their ad budgets to the likes of Instagram and YouTube too.

Conclusion

While the U.S. TikTok ban is primarily a domestic policy decision, its effects will reverberate internationally. UK businesses and creators must brace for potential disruptions, exploring alternative platforms and strategies to maintain their U.S. connections.

Being just three days away, everyone is asking ‘will it happen?’ I think, even a short ban, is more likely than not.

🚀 UK Aims for AI Superpower Status To Boost Growth

The UK government has unveiled an ambitious plan to harness artificial intelligence, promising to revitalise public services and put the country at the forefront of the global AI race. Dubbed the AI Opportunities Action Plan, the initiative is supported by £14 billion in private investment and hopes to create over 13,000 jobs. But with public finances under strain and big promises to fulfil, questions loom over whether this AI-powered dream is achievable - or just another government soundbite.

Key Takeaways

• AI Growth Zones: New tech hubs across the UK will drive innovation and job creation.

• Public service boost: AI will streamline admin in schools, hospitals, and councils, tackling everything from cancer diagnoses to potholes.

• Supercomputer revival: Labour is bringing back plans for a UK supercomputer, doubling down on digital infrastructure.

• Big tech focus: Critics argue the plan is overly reliant on major firms, overlooking smaller innovators.

What This Could Mean for the UK

Big Ambitions

Prime Minister Sir Keir Starmer has declared AI as the key to transforming the UK into a global tech leader. By cutting admin workloads in public services and expanding the use of AI in healthcare, education, and infrastructure, the government hopes to unlock productivity gains while reducing costs. AI-powered cameras inspecting roads for potholes may sound a bit mundane, but it’s part of a broader strategy to make everyday life smoother.

Big Promises, Bigger Questions

Labour’s pivot from AI caution (emphasised during the Sunak years) to full-throttle optimism suggests they’re betting on innovation over-regulation. But the race to build data centres and grow a tech workforce won’t happen overnight, and critics warn Labour may not see results before the next election.

With the International Monetary Fund suggesting AI-driven productivity gains will take years to materialise, the question is whether voters will stay patient while the UK builds its digital backbone.

The Real Winners?

Big tech. Any surprises? Of course not. While big tech players are already onboard, smaller UK businesses and AI start-ups risk being left behind.

Bottom Line

I’m a big advocate of AI and am pleased to see its implementation across the UK. And while artificial intelligence is poised to redefine the UK’s economy and public services, its success depends on how the government navigates its funding, timing, and focus. If Labour can balance growth, regulation, and inclusion, the UK could emerge as a true AI superpower. But if big promises go unmet, it may just be another chapter in Britain’s long list of tech “what-ifs.”

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