Italy’s record business is having a moment.
The country’s recorded music trade revenues were up 34.3% year-on-year to €128.7 million (approx $150 million) in the first half of 2021.
That wasn’t just because of a favorable physical-sales comparison to the pandemic-hit 2020, either: Italy’s trade revenues from streaming alone in H1 2021 were up 27.2% YoY, according to FIMI/Deloitte data.
The country’s recorded music business is now on course to comfortably generate over a quarter of a billion dollars this year.
The dominance of Italy’s homegrown artists is particularly remarkable: The full Top 13 of Italy’s domestic album chart for the first half of 2021 was made up of Italian – and Italian language – acts, according to FIMI/GFK data.
This album chart was led by Sangiovanni with his self-titled LP, while the highest non-Italian entrant was After Hours by The Weeknd at No.14.
The entire Top 10 of Italy’s singles chart for H1 2021 was also made up of tracks from Italian acts, led at No.1 by Colapesce and Dimartino’s Musica Leggerissima.
And then, of course, there’s Måneskin.
The most successful Italian artist of the streaming age, the Sony Music Entertainment [1,051 articles]”>Sony Music-signed band – who shot to international fame following their performance at the Eurovision Song Contest in May – currently have over 40 million global monthly listeners on Spotify [2,584 articles]”>Spotify.
They have seen their hit cover of Beggin’ top 625 million global streams on Spotify, while two other hits (I WANNA BE YOUR SLAVE and ZITTI E BUONI) have over 600 million plays between them on the platform.
The world has certainly noticed Italy’s major-league music success in 2021. And so, evidently, has the Italian government.
MBW has confirmed that Italy’s government has this month confirmed a new package of tax breaks for the Italian recorded music market.
This tax credit scheme for record labels – delivered by Italy’s Ministry Of Culture – will cover expenses for domestic record companies (including the majors) at up to 30% of a total cost of €250,000 per album (i.e. €75,000 of tax credits per record).
Each record company will have a maximum of €800,000 in tax credits (approx $930m) to claim across a three-year time frame.
This money can be claimed for recording costs, mixing, making videos, paying/licensing copyrights and other A&R expenses.
The Italian government has agreed to make a total tax credit pot of €5 million per year (approx $5.8m) available for record labels from 2021 onwards.
This new tax credit replaces the former version from the Italian government, which was limited to only the first record created by new talent, with a limit of €200,000 per company per year.
A €5 million annual tax credit for A&R from Italy’s government is a sizeable commitment to the record industry.
“The Italian government has agreed to make a total tax credit pot of €5 million per year (approx $5.8m) available for record labels from 2021 onwards.”
For example, Italy’s annual GDP is currently estimated at USD $2.106 trillion by the IMF, some 48% smaller than the UK’s ($3.124 trillion) and 976% smaller than the USA’s ($22.67 trillion).
On this basis, Italy’s latest tax credit agreement is the equivalent of the UK government giving its record industry $8.6 million in yearly tax relief, and equivalent to the US government giving its record industry around $63 million.
Enzo Mazza is CEO of Italian recorded music trade body FIMI, which lobbied the Italian government on behalf of the record industry for the latest tax relief agreement.
“This is a major achievement for the labels,” he says of the tax credit scheme, which was recently cleared by the EU commission after being submitted by the Italian government.
Mazza tells MBW: “The new scheme recognizes the important role that music labels play in discovering and nurturing new artists in Italy by increasing the budget and widening the scope.
“The new scheme recognizes the important role that music labels play in discovering and nurturing new artists in Italy.”
Enzo Mazza, FIMI
“The investment from both majors and indies into new Italian artists is demonstrated by the large share of local artists in the [H1 2021] charts.”
Mazza believes that the global rise of Måneskin is evidence of a “new generation of Italian artists escalating the charts” – and evidence of Italy’s government getting a return on its investment into the local recorded music market.
He adds: “The investment made by Sony Music into Måneskin [in Italy] was assisted by the old version of the government-backed music tax credit in 2019.”Music Business Worldwide