Iceland Wants to Be a Destination Spot for Recording Music. A 25% Refund Doesn’t Hurt

 

Earlier this month, jam band Greensky Bluegrass moved its annual Camp Greensky festival to Iceland, a country the act had never visited before but figured would be a once-in-a-lifetime adventure. With three nights of shows booked in the capital of Reykjavik, “we decided to do more,” says band member Anders Beck. The week before the festival, the band journeyed five hours up north in a rented van to Flóki Studios, a farmhouse-turned-music recording space. 

There, along with guest keyboardist Holly Bowling, the band spent four days recording four tracks, which it plans to release as an EP. What solidified the decision to go to Iceland, Beck says, was the country’s Record in Iceland program, which reimburses artists 25% of recording-related costs. “If we’re going to go record, it’s great to get a kickback, obviously, from government funding,” Beck tells Billboard. “And we thought that being in a really unique place like northern Iceland, in the middle of nowhere, would make for some unique music. And it indeed did.”

Iceland, an island country of 388,000 residents that has provided dramatic backdrops for Game of Thrones and the Star Wars film saga, has benefitted substantially from its move 14 years ago to establish a film-production refund program, which has boosted tourism and local economic activity. Now the Nordic country is building on its film-industry success by offering a world-leading financial incentive for music artists — both local and international — to record there.

Record in Iceland, a promotional program run by public-export office Music in Iceland, pays back one-quarter of expenditures for studio recording time, wages, travel expenses, lodging, post-production work and other related expenses — with no minimum spending requirement. To be eligible, artists must release at least 14 minutes of music to the public within 18 months of their Iceland recording sessions.

The program, which began operating in 2020, is helping keep local stars like Björk at home to record, organizers say. Aside from Greensky Bluegrass, it has helped rock band Portugal. The Man, jam band Umphrey’s McGee and indie rock band The Decemberists. (Blur front man and Gorillaz co-creator Damon Albarn, a Brit who also has Icelandic citizenship, thanked Record in Iceland in the liner notes of his 2021 album, The Nearer The Fountain, More Pure the Stream Flows, but did not utilize the reimbursement, a spokesperson says.)

The long-term agenda for Iceland, the world’s 54th-largest music market with revenues of $10.9 million in 2021, is to become “a creative hub in the middle of the Atlantic” where North American artists can stopover in on their way to Europe, or vice versa, and to develop home-grown talent to grow the music industry, says Leifur Björnsson, Record in Iceland’s project manager, who runs the program with Sigtryggur Baldursson, the former Sugarcubes drummer, who acts as managing director. 

Encouraged by its film program’s success, Iceland’s parliament in 2019 approved an act establishing the music-recording incentive, which is funded by Iceland’s Ministry of Culture and Business Affairs. Iceland is hardly alone among countries and local jurisdictions competing for film-production business with tax credits and other incentives. But what Iceland is offering music artists is unmatched by any other country, music industry officials tell Billboard. While some music markets — notably Canada, France and Germany — offer government grants to local artists to record music, no country is offering as meaningful a reimbursement for international artists wanting to travel abroad to record.

“It does seem to be unique as a program,” says John Blewett, a spokesperson for IFPI in London, who inquired with affiliate member organizations at Billboard’s request.

The closest analogue Billboard could find was a failed proposal in New York state to establish an Empire State Music Production Tax Credit, which would offer a 25% tax refund for qualifying music productions, with a minimum spend of $25,000 in the state. The credit, which would cover expenses ranging from studio and equipment rental fees to hotel and transportation expenditures directly related to music production, has died in a senate committee four times since it was first proposed in 2015 and has never become state law, says a spokesperson for Sen. Kevin S. Parker (Brooklyn), who introduced the bill. Parker’s bill proposed capping aggregate refunds at $25 million a year.

Tennessee created a program in 2018 which awards grants up to 25% for producing original scores for film, television, animation, commercials, video games and multi-media projects. The minimum spend is $50,000 in the Nashville area and $25,000 in other areas, with a cap of $500,000 per company per year. (The program has helped garner Nashville a new moniker, “Soundtrack City,” for its increasingly global role in scoring, especially for video games.)

Björnsson says European music export offices, which are usually public-private partnerships, are routinely inquiring about Iceland’s program, including, more recently, Estonia and Finland. “In Estonia they are starting to talk about it on the government level,” he says. (Billboard reached out to Music Estonia, the country’s music industry development and export office, but did not receive a response.)

In Finland, a music-recording incentive has been discussed for a few years, says Heli Lampi, a spokesperson for IFPI affiliate Music Finland, “but it has not yet progressed into any concrete action plan or legislative initiative.”

Music industry organizers in Iceland are hoping to use Record in Iceland to build a larger and more experienced pool of music-recording talent, including engineers and session musicians. “It’s a great experience for studio owners to have clients of the highest caliber,” says Björnsson. “It elevates the level of professionalism here in the country and creates the know-how.”

In the United Kingdom, where refund incentives exist for the film/TV and video game industries, music-industry representatives have lobbied government officials for an Iceland-like incentive for recording artists, but “they haven’t been sufficiently persuaded of the need to do it,” says Gennaro Castaldo, a spokesperson for the British Phonographic Industry Industry (BPI). “The film industry is much bigger, and the benefits were [proposed] when the industry in the U.K. was going through a difficult time some years ago.” 

The U.K.’s Film Tax Relief program which has operated since 2007, allows production companies to claim back up to 25% of costs they incur in the country. It persuaded Lucasfilm/Disney to film the three Star Wars sequels and Rogue One in the U.K., plus the Andor streaming series for Disney+. The British Film Institute (BFI) says that 2022 saw a record £6.27 billion ($7.76 billion) spent on film and TV production in the U.K. — £5.4 billion ($6.68 billion) from overseas productions, largely from the U.S.

From Film in Iceland to Record in Iceland

Film in Iceland, which started in 1999, spawned a burgeoning local industry and many well-trained “below-the-line” film industry professionals. Iceland now has 37 production service companies listed on its Film in Iceland website.

Spending on film and television projects in Iceland in 2022 totaled 6.75 billion krona ($50 million), up fivefold from 1.34 billion ($10 million) in 2018. Iceland doled out just over 2 billion krona ($15 million) in reimbursements last year. The government has steadily increased the Film in Iceland reimbursement percentage, from 12% in 2001 to 25% in 2017, and then to 35% last year.

Like the music refund scheme, there is no minimum budget for a film, TV show or documentary to be eligible to get back 25% of production costs in Iceland. But to qualify for a 35% reimbursement, production costs must total at least 350 million krona ($2.6 million), and the project must work at least 30 days in Iceland with a staff of at least 50 people.

Iceland, with its desolate snow-capped mountains, glaciers and lava fields, has a natural advantage in luring dozens of big-name films and television shows — including Batman Begins, Interstellar, two Marvel films, two recent Star Wars films, two James Bond movies and the Will Ferrell comedy, Eurovision Song Contest: The Story of Fire Saga. HBO’s Game of Thrones also filmed parts of seven seasons there, including many scenes depicting lands “North of the Wall.”

Due to COVID-19 shutdowns, the program got off to a relatively slow start in 2020, with a lot of studio bookings falling through. But over the past year the music program became “a well-oiled machine,” says Björnsson, with the Ministry of Culture — following a review by a four-person committee — issuing refunds two to four months after artists submit their invoices and expenses.

Iceland has several professional-level music studios, nine of which Record in Iceland features on its web site. While Flóki Studios, which is owned and operated by Colorado-based experiential travel company Eleven Experience, is up north, most are in and around Reykjavik, the capital. Reykjavik Recording Orchestra (RRO), a dedicated session ensemble based in the Harpa concert hall where Greensky Bluegrass performed, has recorded with Björk and renowned film composers Hans Zimmer and Jóhann Jóhannsson. Rapper Kanye West recorded at Greenhouse Studios in 2016, before Iceland’s recording incentive was in place. Sundlaugin Studio, where post-rock band Sigur Rós records, overlooks a creek and pond. Masterkey, co-run by pianist Markéta Irglová, who won an Academy Award for Best Original Song for “Falling Slowly,” boasts views of a majestic mountain. 

While generous, the music-refund program does have a few catches. Only “lead performers” are eligible for reimbursement for travel and lodging expenses, which would not include traditional session players charging a rate to play on the recording. While there is no defined stipend for lodging and travel costs, the rule of thumb is that artists should travel in economy class, and that if flights and hotels make up more than 50% of the total budget submitted for a refund, the refund committee would most likely not approve it, says Björnsson.

When the recording is of a concert or other live event, only direct costs for recording, postproduction and royalties for performers may be calculated for reimbursement, the Record in Iceland act states. And artists need to be efficient and committed to releasing music to meet the 18-month requirement for putting out music.

“That is one corner of it where I’ve said like, ‘What if an artist just wants to come screw around in Iceland, and those tracks don’t come out?’” says Chris Funk, a member of The Decemberists who also co-manages Flóki Studios. “But they have to have rules around these things, so people aren’t just screwing around and taking advantage of it. I totally understand it.”

Greensky Bluegrass, which initially decided to travel to Iceland at the invitation of U.S.-based destination promotions company Pilgrimage of Sound, which put on Camp Greensky, plans to release its EP, possibly on its own label, within the 18-month window, along with a documentary about the sessions. Beck hopes the band can do more adventure recording. “Life gets in the way of a lot of things you want to do,” he says. “But for me it was definitely an inspiration to think outside the box.”

The group’s only small regret, Beck says, is that they couldn’t experience the spectacle of Northern Lights that Iceland is so famous for. 

“Greensky, it’s the name of our band. We go to the only place where the sky actually turns green. Iceland, Northern Lights. And of course, we’re there the wrong time of year,” he says with a laugh. “But I don’t know if our festival would have been as fun had it been dark all day, instead of light all night.”

Additional reporting by Richard Smirke.