IFPI Music in Europe PDF

THE ECONOMIC
IMPACT OF MUSIC
IN EUROPE
NOVEMBER 2020
The Economic Impact of Music in Europe
FOREWORD
European music is an essential part of our lives.
Whether in good times or tough times, music is there for us.

It thrills us at life’s great moments. It fosters our well-being
and helps us heal when we’re down. It shapes our identity and
culture.
Music also has a powerful economic impact on Europe –

supporting jobs, boosting gross domestic product and tax
payments, and driving exports.
This report by Oxford Economics provides, for the first time, an

authoritative analysis of these key economic aspects of music’s
vital contribution to the economies of the European Union (EU)
and the UK.
Frances Moore,
Chief Executive, IFPI, The numbers are impressive. Across the 27 Member States of
representing the global the EU and the UK (based on 2018 data), the music sector:
recording industry worldwide
• Supports two million jobs;
• Contributes €81.9 billion gross value added (GVA) annually to
the EU 28’s GDP; and
• Exports €9.7 billion worth of goods and services to countries
outside the EU 28.
To put these into perspective, music’s economic contribution to

the EU 28 was larger than the GDP of nine EU countries, and its
music exports were even greater than those of its world-famous
GI protected wines.
And at the heart of it all are the EU’s 7,400 record companies –
helping to create the music that fans love and working to help
artists achieve their greatest creative and commercial potential.
Acknowledgments
By quantifying these vital economic contributions, even above
In addition to the work carried out by Oxford Economics, this report would not be possible
and beyond music’s artistic and human benefits, this report is
without the significant input of the music community in Europe. I have no doubt that our
intended to help guide EU and UK policymakers in support of a
community will continue to work together to ensure that music’s contribution – both cultural
healthy and robust European music ecosystem.
and economic – remains as relevant and as vital to Europe as ever.
Specifically, we would like to thank the many organisations and companies who provided
data and assistance, not least of all the many record labels, music publishers, digital audio
streaming services as well as colleagues at IFPI National Groups, the Independent Music
Companies Association (IMPALA), the European Grouping of Societies of Authors and
Composers (GESAC) and their member collective management societies, the International
Confederation of Societies of Authors and Composers (CISAC), music licensing companies of
producers and performers, the European Network for Live Music Associations (Live DMA), the
International Federation of Musicians (FIM), the European Music Managers Alliance (EMMA),
Music Industries Association (MIA), Association Européenne des Conservatoires, Académies
de Musique et Musikhochschulen (AEC), the Performing Arts Employers’ Association League
Europe (PEARLE), as well as many others whose names or studies have been referenced in the
Bibliography and Methodology sections of the report.
1
The Economic Impact of Music in Europe
TABLE OF CONTENTS
Executive summary6
1. Introduction12
1.1 Objective of the report 12
1.2 Definition of the music sector 12
1.3 Challenges in estimating the size of the music sector 13
1.4 The structure of the report 16
2. Contribution to GDP18
2.1 The music sector’s total contribution to GDP 18
2.2 The music sector’s direct contribution to GDP 19
2.3 The GDP supported by the music sector’s indirect and
induced impacts 19
3. Employment22
3.1 The music sector’s total impact on employment 22
3.2 The music sector’s direct employment 22
3.3 The employment supported by the music sector’s
indirect and induced impacts 23
4. Tax receipts26
4.1 The music sector’s total contribution to tax receipts 26
5. Exports28
5.1 Exports of goods 28
5.2 Exports of digital goods and services 29
5.3 Total exports 30
6. Conclusion32
7. Bibliography34
Appendix: Data and methodology36
3
The Economic Impact of Music in Europe The Economic Impact of Music in Europe
THE ECONOMIC IMPACT

OF MUSIC IN EUROPE
€81.9 billion
Music sector’s total GVA
90
80
€37.5 billion
Direct impact of the music sector
7,400
Record companies across 70
contribution to GDP in 1.5 × larger than the GDP the EU27+UK**
70
the EU27+UK contribution of the wine and ** D
ata rounded to nearest 10
60 beer manufacturing sectors
Larger than the GDP of 340
9 of the 28 EU countries 50
(Luxembourg, Bulgaria, 200
Croatia, Slovenia, Lithuania, 40
Latvia, Estonia, Cyprus, Malta) 20
30
200
20 100
€66.3 billion
The music sector’s GVA 10 140
contribution to GDP in
the EU27 alone 0 1,670 110 390
910
50
2.0 million
70
1.3 million directly employed 190
Total jobs supported by the music sector
1 in every 119 jobs 170
This is 24% higher than the 800 390
European audiovisual sector 170
70
120
210 60
100 780 120
€9.7 billion 13% more than

exports of all European
Export revenue GI-protected wines* <10
(conservative estimate) <10
* Protected Designation of Origin +
Protected Geographical Indication Every €1 directly
generated or invested
by record companies €2.3 billion
€1.8
€31.0 billion
led to an additional Record companies’
Total tax contribution €26.2 billion GDP contribution in other
parts of the music sector
revenues from European
music exports
contribution to the
Equivalent to 19.4% of the entire EU budget EU27 alone value chain.
Data from 2018 and covers the EU27 and the UK unless stated otherwise.
4 5
EXECUTIVE SUMMARY
This report quantifies the gross value added, analysed in this report, the Gross Value Added THE GDP SUPPORTED BY THE MUSIC SECTOR IN EUROPE
€81.9 billion
employment and tax contributions the music (GVA) contribution to the GDP, is the value of
sector made to the economies of the 27 goods or services produced minus the value of Total GVA contribution
Member States of the European Union (EU27) materials and services used in the production
and the UK in 2018.1 This is an important task thereof. The calculation of the sector’s GVA We calculate that in 2018 the music sector supported a €81.9
The music sector
because the music sector, as with other creative guarantees that it is the actual economic billion gross value added contribution to GDP in the EU27 and
supported a €81.9 billion
industries, is poorly captured by national contribution to the GDP that is measured – UK. The estimate of €81.9 bn in total economic impact should
gross value added
statistical agencies’ data. So this report should something that is not achieved by adding up be taken as a minimum overall contribution to the GDP, which
contribution to EU27
help to better inform firms within the sector, the sector’s turnover for example. would be considerably higher if we were able to better estimate
and UK GDP in 2018.
policymakers, and other stakeholders as to the the value that music contributes to the economic activity
music sector’s economic importance both in To produce this report, Oxford Economics generated by film, television, advertising, and video gaming. To
absolute terms and relative to other industries. conducted an economic impact assessment give an indication of scale, this is larger than the GDP of 9 out
on the music sector across the EU27 and UK. of the 28 EU countries (Luxembourg, Bulgaria, Croatia, Slovenia,
For the purposes of this study, the ‘music This involved analysing the impact of the sector Lithuania, Latvia, Estonia, Cyprus, Malta) in the same year.
sector’ is defined as encompassing the following itself, its procurement of goods and services
entities and segments, in accordance with the from European suppliers, and the payment of Direct economic impact
WIPO Guide2 methodology: record companies; wages both by the sector itself and along its
The music sector’s direct GVA contribution amounted to
€37.5 billion
music publishers; recording studios; authors; supply chain. Estimates of the sector’s impact
€37.5 billion. This was 1.5 larger than the GDP contribution of the
performers; artist management; collective are made for four metrics:
EU’s historic and world-famous wine and beer manufacturing
management organisations; music radio; music
television; digital music services; physical music • its gross value added contribution to GDP; sectors in the EU27 and the UK in the same year.
retail; live music event production; concert • employment; The study finds that for every €1 in GDP the music sector
The music sector’s
venues; manufacturing and retailing of musical direct GVA
instruments and music equipment; music • tax receipts; and directly generated in 2018, it supported the creation of an
contribution.
additional €1.20 in GDP elsewhere in the European economy.
merchandising; and music teachers. • export earnings. The music sector is therefore said to have a ‘GDP multiplier’ of
2.2. The size of this multiplier reflects the high level of music
The scope of this exercise and the metrics used The report was commissioned by IFPI, which
sector firms’ procurement from other firms within the music
to quantify the impacts of the music sector do is the trade body representing the recording
sector itself. Record companies alone, however, had a higher
not represent the sector’s aggregated revenue industry worldwide.
GDP multiplier of 2.8 which means that every €1 in GDP directly
or sales. In the simplest terms, the key metric
generated by record companies led to the stimulation of a
further €1.80 in GDP elsewhere in the economy (including other
parts of the music sector). This higher multiplier reflects the
high level of record company investment in other parts of the
music sector value chain.
Indirect and induced economic impact

In addition to the direct contribution, the music sector also
contributed to the European economy through its procurement
2.2 ×
of goods and services (the indirect impact), as well as the GDP multiplier
wages it paid, which were subsequently used to buy consumer
goods and services (the induced impact). Both of these types for every €1 in GDP the music
of expenditure stimulated economic activity elsewhere in the 28 sector directly generated in 2018,
countries. We estimate that in 2018 further GVA contributions it supported the creation of an
to EU27 and UK GDP of €22.8 billion and €21.6 billion were additional €1.20 in GDP elsewhere
stimulated by this procurement and wage financed consumer in the European economy.
spending, respectively.
1
At the time of the study, 2018 was the last full year for which data were consistently available.
2
WIPO Guide on Surveying the Economic Contribution of the Copyright Industries (2015, revised edition): https://www.wipo.int/
6 edocs/pubdocs/en/copyright/893/wipo_pub_893.pdf 7
EU27 findings EXPORT EARNINGS
€66.3 billion Taking the EU27 economies without the UK, we find that the
music sector supported a €66.3 billion GVA contribution to
EU27 GDP in 2018. The difference between this EU27 figure
In 2018, the music sector was conservatively estimated to have
earned €9.7 billion in revenue from exports to countries outside
the EU27 and UK. This amount was around 2.3 times larger than
€9.7 billion
In 2018, the music
GVA contribution and our €81.9 billion total for the EU27 and UK consists of
the amount the EU27 and UK earned from audiovisual exports sector exported
to GDP in the the economic impact of the music sector in the UK, plus the
to the rest of the world.6 Alternatively, at €9.7bn, EU27 and UK €9.7 billion
EU27 alone. additional impact of any purchases made by EU27 entities from
music exports generated 13% more in revenues than extra-EU worth of goods
UK suppliers and vice versa, and comparable cross-border wage-
exports of all European GI-protected wines in 2017.7 and services to
financed consumption. Consequently, this difference between
the two figures cannot be interpreted as the size of the UK music countries outside
EU27 and UK record companies, music publishers, and audio the EU27 and UK.
sector’s economic impact on the EU27 and UK economies.
streaming services generated €4.7 billion (49%) of this export
figure. The exports of certain music-related goods (sound
recording and reproduction apparatus, musical instruments and
THE MUSIC SECTOR’S IMPACT ON EMPLOYMENT IN EUROPE
2.0 million
devices for playing music such as radios, etc) generated a further
€5.0 billion in exports revenue for the EU27 and UK trade balances.
In 2018, the music sector directly or indirectly supported
the employment of two million people across the EU27 and
The extra-EU exports estimate is conservative because not all
UK economies, including people in full-time, part-time, and
The music sector export revenue streams were included in the study because of
self-employed roles. This means that one in every 119 persons’
supported 2.0 data availability (e.g. data was unavailable for all collectively
employment in the 28 countries was dependent on the music
million people in managed music export revenues or revenues from international
sector in some way.
employment across concerts/tours in non-EU countries).
the EU27 and UK in
Direct employment
2018— so 1 in every
119 jobs depended Of the two million people whose jobs were supported by the
on the music sector. music sector, 65% (1.3 million) worked in the music sector itself
in 2018 – i.e. the sector directly contributed 1.3 million jobs.
This was 2.1 times higher than the number of people who were
employed in the EU27 and UK’s information service activities
sector in 20183 and 24% higher than the direct employment in
the European audiovisual sector in the same year.4
TAX RECEIPTS
€31.0 billion The music sector is estimated to have supported – i.e. either
contributed or stimulated other sectors to contribute –
€31 billion in tax receipts in the EU27 and UK in 2018. This €31
In 2018, the music sector
supported €31.0 billion billion in tax revenues was equivalent to 19.4% of the entire EU
in tax receipts across the budget in the same year.5 Within the EU27 alone, the sector
EU27 and UK. supported €26.2 billion in tax contributions.
3
Source: Eurostat: Annual detailed enterprise statistics for services. (Information service activities includes firms that undertake data 6
Available at: https://avdata4europe.eu/key-data/
processing, web hosting, internet search facilities, and news agencies) 7
Source: European Commission, 2019. Study on the economic value of EU quality Schemes, geographical indications (GIs) and
8 4
AVdata4Europe figures, available at: https://avdata4europe.eu/key-data/ traditional specialities guaranteed (TSGs). Table 5, Page 18. 9
5
Available at: https://www.consilium.europa.eu/en/press/press-releases/2017/11/30/2018-eu-budget-adopted/#:~:text=The%20
2018%20EU%20budget%20is,to%20react%20to%20unforeseen%20needs.
10 11
1. INTRODUCTION
1.1 OBJECTIVE OF THE REPORT 1.2 DEFINITION OF THE Fig. 1. Definition of the music sector used in the report
MUSIC SECTOR
This report quantifies the The report also estimates the Core Interdependent (and other related services)
contribution the music sector export earnings generated by There is no single, generally
made to the EU27 and the UK the music sector. Exports are accepted definition of the Record companies Musical instrument manufacturing
economies in 2018. To achieve important from an economic music sector. We have
that task we have undertaken perspective as they bring chosen to be guided by the Music publishers Musical instrument retail
an economic impact appraisal additional income into the World Intellectual Property Recording studios Music merchandise production and services
of the sector. This involves European economy, helping Organization’s (2015) Guide
quantifying the contribution to support extra employment, on Surveying the Economic Authors/Songwriters Music merchandise retail
made by the music sector8, generate higher GDP and Contribution of the Copyright Performers Music teachers
and the economic activity it tax receipts. Industries.10 This defines the
stimulates across the rest of the core copyright industries Artist management Manufacture of music (consumer) equipment
EU27 and UK economies by its Quantifying the size of the as “industries which are Collective Management Organisations (CMOs) Retail of music (consumer) equipment
procurement and payment of music sector is important wholly engaged in the
wages, which are subsequently so that its participants, creation, production and Radio Manufacture of studio/recording equipment
spent in the consumer governments, and other manufacture, performance, Music television Retail of studio/recording equipment
economy. The results of the stakeholders are aware of broadcasting, communication
economic impact appraisal are its contribution to the EU’s and exhibition, or distribution Digital music services (audio and video)
presented for three metrics: and UK’s GDP, job creation, and sale of works and other Physical music retail
fiscal receipts and trade protected subject matter.”11
1) Gross domestic product Live music event production
balance. This report provides For the music sector we have
(GDP)
data about the sector that interpreted that to include Concert venues and festivals
2) Employment
is often not captured in data those segments identified (where the primary activity is music)
3) Tax receipts
collected by national statistical in the left hand column of
agencies. Such agencies tend Fig 1. We have also used the Source: World Intellectual Property Organization
This exercise, and the metrics
to be better at quantifying WIPO Guide’s definition of
used, are very different in
traditional industrial sectors the ‘Interdependent copyright
scope from studies or reports
(like manufacturing) which industries’ as “industries 1.3 CHALLENGES IN ESTIMATING THE SIZE OF THE MUSIC SECTOR
analysing turnover or the
produce tangible goods which are engaged in the
aggregated revenue of the
than industries producing production, manufacture and As in every economic impact A further challenge relates in another way. In addition,
music sector or of any one
intangibles (like the music sale, and renting or leasing of study, the main challenges to estimating the number based on information from the
part thereof.9 Each segment’s
sector) and the new digital equipment. Their function is relate to data availability. For of people employed in the neighbouring rights collective
GDP contribution is typically
service sectors (like audio and wholly or primarily to facilitate the purposes of this study, sector. Some people who management organisations,
less than the revenue that
music video platforms). the creation, production, we developed a bespoke work within the music sector some 349,000 performers
sector earns, as purchases of
or use of works and other survey that was completed undertake multiple roles. This received income when the
goods and services used in
protected subject matter.”12 confidentially by an array of is most obvious in the case recordings were broadcast
the production of the sector’s
The parts of the music sector firms within the sector across of songwriters who perform or played in public.13 Given
output (and by its suppliers) are
we believe that correspond to Europe. We also drew on data their own material. Data one individual can be both a
not included. A GVA calculation
that definition are included in from trade bodies, published from Grouping of Societies songwriter and a performer
is the only way of analysing a
the right hand column of Fig 1. annual accounts, other studies, of Authors and Composers these two groups include a
sector’s contribution to GDP
and a number of other sources, (GESAC) members show that large number of the same
because, unlike turnover data, it
including government statistics 459,000 people across the people. When calculating
eliminates any double-counting
where available and appropriate. EU27 and UK received income the total number of people
of revenues within the sector’s
These are summarised in in 2018 for having the songs employed in the music
supply chain.
the Data and Methodology or musical compositions sector, we ensured that the
Appendix for transparency. they had written being people believed to be both a
performed, played on the performer and a songwriter or
8
For the purposes of this study, the “music sector” is defined as encompassing the following entities and segments: record
companies; music publishers; recording studios; authors; performers; artist management; collective management organisations; radio or television, or used author were counted only once.
as well as music radio; music television; digital music services; physical music retail; live music event production; concert venues;
manufacturing and retailing of musical instruments and music equipment; music merchandising; and music teachers.
9
This economic impact appraisal is very different in scope and the metrics used and cannot be compared e.g. to the IFPI Global
Music Report which analyses the recording industry’s trade revenues. 13
In addition to their income from CMOs, performers also get revenue from elsewhere. For example, their digital revenues based on
12 10
WIPO Guide on Surveying the Economic Contribution of the Copyright Industries (2015, revised edition): https://www.wipo.int/ their contracts with the record companies. 13
edocs/pubdocs/en/copyright/893/wipo_pub_893.pdf
11
Quotation from paragraph 127 of World Intellectual Property Organization (2015).
12
Quotation from paragraph 145 of World Intellectual Property Organization (2015).
As part of this study, we

estimate the economic activity
AN INTRODUCTION TO OUR • employment measured on a headcount All results are presented for the calendar year
the music sector supported basis to facilitate comparisons with national 2018. This was selected as it was the most recent
by its procurement across its ECONOMIC IMPACT ASSESSMENT statistical agencies’ employment data. It year for which all the data sources were available.
EU27 and UK supply chain. therefore includes anyone who is paid wages
A high proportion of this In this report the contribution the music sector makes to the regardless of the length of their working Our results are presented on a gross basis.
expenditure was intra-music EU27 and UK economies is investigated using an economic week or whether they work all year round. They therefore ignore any displacement of
sector purchases meaning that impact assessment. This involves quantifying the value of the Those who are paid as part of a contract for activity from other genres of entertainment
parts of the sector, e.g. record work undertaken by the music sector itself, plus the knock- the provision of services will be included in or industries. Nor do they consider what the
companies, were spending on effects of its spending on business supplies and wages in the supply chain; and, resources currently used by the music sector,
large parts of their revenue or by their suppliers, could produce in the
on other parts of the music
the course of undertaking those activities. Three ‘channels • tax receipts generated by the economic absence of the music sector’s activity.
of impact’ are therefore captured, as follows (and are also activity undertaken by firms and
sector.14 For example, the 7,400 summarised in Fig. 2): employment incomes of their workers.
record companies in the EU27
and UK are estimated to have • The direct impact relates to economic activity and Fig. 2. The contribution the music sector makes to the European economy
spent 61% of their expenditure employment generated by the music sector itself, at its
on inputs of goods and recording companies and studios, publishing companies,
services from other segments offices and other locations in the 28 countries covered by DIRECT The music sector employs people.
of the music sector, such as the study. IMPACT Its operations generate GDP and pay taxes.
performers/recording artists
(see the box on page 20).
• The indirect impact refers to the economic activity
stimulated along the music sector’s European supply chain
In estimating the economic outside of the music sector, by its procurement of non-
impact of the music sector as a music related inputs of goods and services from EU27 It also spends money with
whole, we strip out the impact and UK suppliers (e.g. travel, IT, accounting services not INDIRECT suppliers who employ staff,
of these intra-music sector provided in-house). IMPACT generate GDP and pay taxes.
purchases. This is necessary They use other suppliers in turn.
in order to prevent double • The induced impact comprises the wider economic benefits
counting of a participant in that arise from the payment of wages by the music sector,
the sector itself and elsewhere and the firms in their supply chain, to its workers—who spend
these earnings in retail, leisure and other outlets. This channel Employees (including of the
in another segment’s supply
of impact also includes the activity stimulated in these INDUCED suppliers) spend their wages
chain and, as such, is required in the wider economy,
for reliable calculation of the outlets’ supply chains, and that supported by the spending of IMPACT
generating more GDP, jobs
sector’s GDP, employment and those working in these consumer-facing industries.
and tax revenues.
tax contribution. The total economic impact or contribution is simply the sum
of these three impacts.
The economic impact of music sector activities is measured Added together, these three
using three metrics: TOTAL effects—direct, indirect,
IMPACT induced—comprise the total
• gross value added contribution to GDP. This is easiest economic impact of the
to conceive as the value of the output produced by a music sector.
firm minus its expenditure on inputs of bought-in goods
and services used up in the production of that output.
Aggregated across all firms and other economic operators
it forms GDP (plus production taxes and subsidies). GDP
measures the total economic output of a country. It is used
to judge the rate of a country’s economic growth and to
define whether it enters a recession;
14 14
See IFPI (2019). “Record Companies: Powering the Music Ecosystem”. 15
1.4 THE STRUCTURE OF THE REPORT
The report is organised into the following chapters:

• Chapter 2 investigates the • Chapter 5 highlights the
contribution to GDP the export earnings generated
music sector generated by the European music
itself (‘direct contribution’) sector from sales to
in 2018, and stimulated businesses and consumers
elsewhere in the European outside the EU in 2018;
economy through its
procurement and payment • The Data and Methodology
Appendix summarises the
of wages (‘indirect
data sources used for each
and induced’ impact
segment of the music sector
respectively);
and how we modelled their
• Chapter 3 follows the same contribution to gross value
approach to analyse the jobs added, employment, tax
supported around Europe in receipts, and exports.
2018 by the music sector;
• Chapter 4 quantifies the
music sector’s contribution to
government finances in the
EU27 and the UK through the
payment of taxes in 2018;
16 17
2. CONTRIBUTION TO GDP
At every stage of the value 2.1 THE MUSIC SECTOR’S TOTAL CONTRIBUTION TO GDP 2.2 THE MUSIC SECTOR’S DIRECT CONTRIBUTION TO GDP
chain in all parts of the music
sector, from artists and record We estimate the music sector procurement and payment of Analysis of the GVA same year.16 It was estimated
companies, to music retailers supported a €81.9 billion gross wages on GDP in the EU27, contribution to EU27 and UK to have made a €31.9 billion
and instrument makers, value added contribution to and the GDP supported by the GDP supported by the music contribution within the
economic value is being GDP in the EU27 and UK in EU27 music sector’s supply sector by impact channel, European Union, with 81%
created. Through generating 2018. To give an indication of chains that passed through shows that 46% or €37.5 billion of the total contribution in
profits, paying wages, and scale, this is larger than the GDP the UK. The supply chains of (Fig. 3) was generated by the 2018 within the EU27 and 19%
purchasing goods and services, of 9 out of the 28 EU countries the EU27 music sector that sector itself (its direct impact). within the UK.
the music sector has a positive (Luxembourg, Bulgaria, Croatia, included UK firms as one To give a sense of scale, this is
impact on GDP in Europe. This Slovenia, Lithuania, Latvia, or multiple links mean that 1.5 times larger than the GDP
chapter quantifies the GDP Estonia, Cyprus, Malta) in the subtracting our estimates for contribution of the wine and
supported by the music sector same year.15 the EU27 from the EU27 and beer manufacturing sectors
in the EU27 and UK economies UK combined do not give the in the EU27 and UK in the
in 2018. The estimates are Within the EU27 countries results for the impact of the
disaggregated by the three the music sector supported a UK’s music sector on the UK
channels of economic impact €66.3 billion contribution to and EU27.
(direct, indirect and induced). GDP. The difference between 2.3 THE GDP SUPPORTED BY THE MUSIC SECTOR’S INDIRECT AND INDUCED IMPACTS
the estimates for the EU27
This study looks at the GVA and for the 28 countries is the The music sector’s expenditure procurement from outside of wages stimulated another
contribution to GDP, rather GDP generated by the music on inputs of goods and services the sector (e.g. the purchase €1.20 in GDP contribution
than total revenues, as this sector in the UK, the impact from the rest of the economy of raw materials for industrial elsewhere in the economy.
more accurately reflects of the UK music sector’s stimulated a €22.8 billion manufacturing). On the This multiplier reflected the
the economic contribution contribution to GDP at firms in other hand, a low multiplier high level of intra-music
made by a sector or industry Fig. 3. The gross value added contribution to GDP supported the sector’s European supply number can be indicative sector procurement (for
to an economy. In a highly by the music sector in the EU27 and UK in 2018 chain. This indirect impact was of sectors that are highly example, the investment
vertical sector like music, a 28% of the total impact. vertically integrated in their of record companies in
€ billions
total revenues metric would procurement chain or, in other artists and their managers)
see us counting revenues 90 The remaining 26% (€21.6 words, undertake most of their compared to procurement
81.9
multiple times along the music 80 billion) of the total impact was procurement spending within spending with suppliers from
sector supply chain, whereas supported by the payment of the sector itself. The music outside of the sector. This is
GVA captures only the value 70 21.6 21.6 wages by firms in the music sector is a typical example consistent with the fact that
created at each stage, thus not sector and along its supply of such a highly intensive or companies or entities in the
being subject to any double 60 chain (known as the induced vertically integrated sector, music sector tend to purchase
counting issues. 50 impact). A proportion of the meaning that it will feature a lot of goods (e.g. licensing
22.8 22.8
wages paid are onward spent a higher direct impact and a copyrights, purchasing
40 in the consumer economy, for lower indirect impact, leading recording equipment, etc)
example, buying food, clothing, to a lower multiplier. and services (e.g. the services
30
and leisure items, and along all of session musicians, sound
20 these outlets’ supply chains. This report estimated the engineers, etc) from other
37.5 37.5
music sector’s GDP multiplier parts of the music sector itself,
10 The GDP multiplier is typically (the ratio between the total and so much of the sector’s
used to assess the extent to GDP it supports and the economic impact contribution
0
Direct Indirect Induced Total which a sector stimulates sector’s own contribution) is captured in our definition of
Source: Oxford Economics
economic activity in the wider to be 2.2. This means that direct GVA, rather than in the
economy. A high multiplier can for every €1 the music indirect or induced economic
be indicative of sectors that sector contributed to GDP impact figures.
are not vertically integrated in the EU27 and UK, its
but rely principally on procurement and payment
18 15
GDP data for 2018 sourced from Eurostat. 16
Source: Eurostat: Annual detailed enterprise statistics for industry. 19
THE RECORDING INDUSTRY’S INTRA-MUSIC SECTOR PROCUREMENT
Within the bespoke survey we sent to firms in This means that for every €1 in gross value
the music sector was a request for details on added that record companies contributed to
their procurement. We asked firms to split their GDP, record companies supported another
expenditure on inputs of goods and services €1.80 elsewhere in the economy (including
into those that came from the rest of the music other parts of the music sector).
sector versus a list of other industries. We found
that for record companies, a high proportion of Fig. 4. Record companies’ procurement by
their procurement was from within the music purchase type in 2018
sector – i.e. spending on other parts of the
music industry’s value chain. Record companies
were estimated to have spent 61% of their
procurement expenditure in 2018 on inputs of
goods and services from within the music sector
(e.g. payments to recording artists, performers,
authors or publishers, recording studios (Fig.
4)). This shows that record companies are
39%
highly integrated into the music sector and are
responsible for a relatively high level of spending
with businesses working within the sector. The Percentage share
remaining 39% of record company procurement
consisted of spending on goods and services 61%
from entities outside the music sector itself such
as legal services, utilities, etc. It is the impact
of this spending with entities outside of the
music sector that is captured in the indirect and
induced impact sections of this report.
If we focus only on the impact of record

companies on the economies of the EU27 and
UK, we would include other parts of the music Purchases from other industries
sector within the supply chains of the record
Intra-music sector spend
companies. Consequently, the gross value
added multiplier was estimated to be 2.8. Source: Oxford Economics
20 21
3. EMPLOYMENT
This chapter quantifies the 3.2 THE MUSIC SECTOR’S DIRECT EMPLOYMENT 3.3 THE EMPLOYMENT SUPPORTED BY THE MUSIC SECTOR’S INDIRECT AND INDUCED IMPACTS
employment supported
by the music sector in the The music sector itself was and music authors across The music sector’s We estimate the music sector higher employment multiplier.
EU27 and UK economies in estimated to have employed the EU27 and UK.20 In the procurement from the rest in Europe had an employment For instance, the employment
2018. The estimates in this 1,305,000 people across the same year, record companies of the economy (excluding multiplier of 1.5 in 2018. This multiplier for record
chapter cover all forms of EU27 and UK in 2018 (Fig. 5). To and recording studios were intra-sector purchases) was means that for every thousand companies was 2.7, meaning
employment; full-time, part- put this into context, this was 2.1 estimated to employ 44,850 estimated to have supported people employed in the that for every 1,000 jobs at
time, and freelancers, and are times higher than the number and 13,800 people, respectively. a total of 368,000 jobs music sector, a further 500 record companies, 1,700 other
disaggregated by the three of people that were employed throughout its external supply people’s jobs were supported jobs are supported elsewhere
channels of economic impact in the information service It is worth noting that the chain in the EU27 and UK in elsewhere in the EU27 and in the economy.
(direct, indirect, and induced). activities sector in 2018,18 number of jobs or roles in 2018. The consumer spending UK economies. This reflects
24% higher than the direct the music sector was higher financed by the payment the labour-intensive nature
employment in the European than the number of people of wages by firms in the of the sector and the high
3.1 THE MUSIC SECTOR’S audiovisual sector19, and 16% employed (1,434,000 versus music sector and its supply degree of intra-music sector
TOTAL IMPACT ON larger than employment in the 1,305,000). This is because chain was estimated to have procurement. Some of the
EMPLOYMENT motor vehicle manufacturing some people fulfilled more stimulated 336,000 jobs sub-segments in the music
sector in the EU27 and UK in than one role (for example, across the EU27 and UK. sector are estimated to have a
In 2018, the music sector was the same year. authors who performed their
estimated to have supported own songs). When calculating
a total of 2.0 million people in Of the people employed in the total number of people ESTIMATING THE VALUE OF MUSIC TO FILM, TV, ADVERTISING, AND VIDEO GAMES
employment in the EU27 and the music sector in the EU27 employed in the music sector,
UK. To put it another way, in and UK in 2018, the highest people who were both a Music plays a major role in supporting products and broadcasting sector made a direct
2018 the employment of 1 in number of people (50%) performer and a songwriter or and programmes created for other mediums. contribution to GDP of €20.8 billion in 2017
every 119 people in the EU27 were employed as performers author were counted only once. Practically all film, television, advertising, and and employed 204,000 people.21 The present
and UK was dependent on the video game content includes music that is used study included only the contribution of
music sector.17 Fig. 5. The employment supported by the music sector in the to set the mood, create emphasis, and move dedicated music TV channels and did not
EU27 and UK in 2018 the audience. Whilst it is self-evident that music attempt to quantify the economic contribution
Within the EU27 economies, Thousand people is an essential component of such content, made by music to those sectors in general.
the music sector supported the 2,250 assessing how much of the economic activity
employment of an estimated generated by these mediums can be attributed There are two main approaches in deciding
1.7 million people, equivalent to 2,008
2,000 to the music they contain is conceptually how much of the economic activity in these
1 in every 121 people employed problematic and hamstrung by data issues. sectors could be attributed to music. These
335 335
in the EU27. As before, the 1,750 There is no economic consensus as to the best are (i) calculating the time for which music is
total employment estimates approach and there are a number of studies present in programs and broadcasts, video
do not yield themselves to 1,500 368 368 looking at each of the relevant mediums, but games or advertising; and (ii) calculating the
a simple mathematical sum the present study does not attempt to provide amount that is paid to right holders for the use
of EU27 and UK estimates. 1,250 a reconciliation or analysis of the various of music. Both, however, have significant flaws,
However, this comparison methodological approaches. which we illustrate below using television as an
can be made for the sector’s 1,000 example. Moreover, even small variations in the
direct employment estimates Yet, the issue is important as some of film, assumptions made for a potential share of that
discussed further below. 750 television, advertising and video games contribution that was attributed to music could
1,305 1,305 sectors make a large economic contribution change the estimated impact of the music
500 across Europe, generating considerable sector by hundreds of millions of euros and
numbers of jobs, GDP, and tax receipts. thousands of jobs.
250 For example, the television programming
0
Direct Indirect Induced Total
17
Source: Eurostat.
18
Source: Eurostat: Annual detailed enterprise statistics for services. (Information service activities includes firms that undertake data
22 processing, web hosting, internet search facilities, and news agencies) 21
Source: Eurostat: Annual detailed enterprise statistics for services. 23
19
AVdata4Europe figures, available at: https://avdata4europe.eu/key-data/
20
The numbers of authors and music performers were sourced from CMOs and thus do not include “DIY artists” who have not
signed up with CMOs.
One way to attribute the proportion of With respect to music in film, video games
television broadcasting activity that is due and advertising, it is evident that music is
to music is to use data from a provider that present in a vast majority of such work and
monitors the amount of broadcast time that the synchronisation revenues paid to music
includes music on each channel. Soundmouse, right holders are captured in the analysis of
a music cue sheet reporting and programme the music sectors’ direct contribution to the
metadata management company, carried out GDP and tax receipts. However, due to the
a music density analysis on a cross-genre broader business considerations involved
sample of EU and UK TV channels in 2019. In in synchronisation deals (e.g. cross-product
the EU sample of 32 television channels across promotion, marketing value, vertical industry
the EU27 countries, 48% of total broadcast integration, etc) it is not clear that this method
time contained music. A similar music density of valuation would capture the full extent of
analysis was carried out on five television economic value of music to the advertising, film
channels in the UK for 2019 which estimated or video game industries.
that 56% of broadcast time contained music.
Soundmouse selected channels with high Estimating the value that music contributes
audience shares across a number of countries to the economic activity generated by film,
including France, Germany, Italy, Sweden television, advertising, and video gaming is
and the UK. The samples were taken across therefore a very complicated challenge. As
all broadcast production types, including we do not believe it can be done with any
advertising, and measured the total amount significant degree of confidence, we have
of music (which was not limited by matching omitted some of these sectors from our
specific recording types e.g. production library analysis and the resulting economic impact
music, commercial music etc). This method is figures. As such, the estimate of €81.9 bn in
appealing as it allows a researcher to capture total economic impact should be taken as
all types of television channels and a much a minimum overall contribution to the GDP,
broader mix of programme genres. However, which would be considerably higher with
while the data reveal what proportion of TV the development of a reliable and accurate
broadcasters’ total airtime contained music, methodology to calculate music’s contribution
it provides no clear insight into the economic to other sectors.
importance of the music relative to the images
shown, or whether that comparison varies
depending on how the music was used.
The second approach is to take the

amount paid to music rights holders by the
broadcasters. In theory, a market forces-
based approach would be most appropriate
for capturing the economic value placed by
broadcasters on music. However, such an
approach cannot be applied where no free
or arms’ length commercial agreements are
possible due to compulsory licensing of certain
music rights which is implicit in their legal
status as remuneration rights.
24 25
4. TAX RECEIPTS
Taxation is a vital part of the 4.1 THE MUSIC SECTOR’S TOTAL CONTRIBUTION TO
operation of governments TAX RECEIPTS
around the world, allowing
them to undertake In 2018, the music sector was (Fig. 6). The music sector’s
infrastructure projects, estimated to have supported tax multiplier was therefore
provide valuable public €31.0 billion in tax receipts estimated to be 2.2. So for
services, and meet their fiscal in the EU27 and UK. Within every €1 of tax paid by the
commitments. This chapter the EU27, it was estimated music sector itself, the music
investigates the tax receipts to support €26.2 billion. This sector supported another
supported by the music €31.0 billion of tax revenue €1.20 in tax receipts elsewhere
sector. It contains estimates was equivalent to 19.4% of the in the EU27 and UK economies
of tax revenue due to the entire EU budget for 2018.22 through its procurement and
payment of labour income wage consumption impacts.
taxes, taxes on corporate Analysed by channel of
profits, national insurance and impact, the music sector itself
security payments, VAT or (the direct impact) made
sales taxes and other taxes the largest contribution to
paid by entities within the tax receipts in 2018 at €14.3
music sector and its supply billion, or 46% of the total
chain. The estimates are
disaggregated by the three Fig. 6. Tax receipts supported by the music sector across the
impact channels, with results EU27 and UK in 2018
driven by the relative incomes
€ billions
received by labour and capital
35
in each, and the tax rates they
31.0
are subject to.
30
8.1 8.1
25
20
8.6 8.6
15
10
14.3 14.3
5
0
Direct Indirect Induced Total
Available at: https://www.consilium.europa.eu/en/press/press-releases/2017/11/30/2018-eu-budget-adopted/#:~:text=The%20

22
26 2018%20EU%20budget%20is,to%20react%20to%20unforeseen%20needs. 27
5. EXPORTS
Exports play an important role The quantification of the music 5.1 EXPORTS OF GOODS Fig. 7. Export earnings from the sale of physical goods produced by the EU27 and UK music
in the European economy. The sector’s exports earnings sector to the rest of the world in 2018 (share of value attributable to the music sector)
sale of goods and services, is not an easy task and is Generally, data on the exports € millions
both tangible and intangible, becoming more difficult. of physical goods are readily
2,500
to customers – whether The products of the music available and detailed, due to
companies or consumers – in sector have a large digital the relative simplicity of tracking
the rest of the world creates component, with the majority the movement of tangible 2,000
income for the EU27 and of recorded music revenues goods across borders. Because 2,030
UK. This is additional income derived from digital sources. of this, we are able to use the
for those countries, and Traditionally, trade data is far Eurostat COMEXT database for 1,500
when received stimulates more detailed and available for data on the value of physical
extra economic activity and physical goods. Unfortunately, goods exports to outside of the
1,000
employment that would not physical goods are a small EU27 and UK in 2018. 1,050
otherwise have taken place. and declining proportion of 960
the music sector’s revenue, As some of the goods included 500 680
This chapter presents including exports revenue. in this section may have
conservative estimates of Indeed, the vast majority of multiple uses that extend 250
export earnings generated by the music sector’s exports – beyond music, we have taken a 0
the music sector in the EU27 be they, for example, digital percentage of their value that Sound recording Smartphones, Music CDs and Musical Radios
and reproduction tablets, and Vinyl records instruments
and UK selling to individual and streams, downloads or live we can attribute to the music
apparatus laptops
business customers elsewhere music concerts outside of sector, based on their final uses.
in the world. As the previous Europe – involve intangible The estimation technique used Source: Eurostat COMEXT
chapters have shown, the goods and services exports. and the COMEXT database are
European music sector is large described in greater detail in
and diverse, stretching from To overcome these data the Appendix. 5.2 EXPORTS OF DIGITAL GOODS AND SERVICES
content creation to instrument challenges, our estimates
manufacture. Consequently, of music sector exports to In 2018, the export value of In this section we present Due to these limitations in In 2018, record companies,
the exports generated by the outside of the EU27 and UK physical goods attributable to estimates of digital goods the national and EU-level music publishers, and music
music sector encompass the include estimates based on the EU27 and UK music sector (digital music) and music- statistical data, our estimates streaming services collectively
sale of goods, and services Eurostat’s COMEXT database totalled €5.0 billion. Of this related services exports from for the exports of digital goods earned €4.7 billion from the
produced by the music sector for physical goods and data total, €2.0 billion came from the EU27 and UK to the rest of and music-related services exports of their digital goods
in the EU27 and UK. from our bespoke survey of the export of sound recording the world. As mentioned in the were calculated based on and services to the rest of
companies for digital goods and reproduction apparatus, chapter introduction above, the bespoke survey data we the world. Out of this total,
and services. As we only which includes headphones, estimating the value of digital received directly from firms in we estimated that record
surveyed record companies, speakers, microphones, and goods and services exports the music sector. The estimates companies earned €2.3
music publishers, and other equipment for the presents more of a challenge reflected the income that these billion in exports, and music
providers of music streaming recording of sound (Fig. 7). than that of physical goods. European firms stated they publishers received a further
services (audio), our estimates An additional €1.0 billion was Data from official sources do earned from customers located €1.1 billion. Firms involved in
for service and digital goods earned from the music-related not provide the necessary outside of the EU27 and UK. the streaming of audio music
exports only cover these export of smartphones, tablets, information to allow us to As such, the value of exports services earned just over
three export sectors. They do and laptop computers. EU27 reliably isolate the exports in this category were limited €1.2 billion from customers
however reflect information and UK exports of recorded of digital music and music- to those of record companies, elsewhere around the globe
provided by the firms CDs and Vinyl records were related services as the data are music publishers, and (Fig. 8).23
themselves, so the data have a worth a combined €960 generally included in broader providers of music streaming
high level of accuracy. million. The sale of musical categories such as Audiovisual services (audio).
instruments generated €680 services or Personal, cultural,
million in export revenues for and recreational services
EU27 and UK manufacturers in (e.g. in the case of live music
the same year. concerts abroad).
Exports for music streaming services (audio) are calculated as the revenues of EU27 and UK streaming services associated with
23
28 non-EU customers, minus the money they pay to EU27 and UK record companies and music publishers. 29
Fig. 8. Export earnings from the sale of services and digital

goods produced by the EU27 and UK music sector to the rest
of the world in 2018
€ millions
2,500
2,350
2,000
1,500
1,000 1,220 1,130
500
0
Record companies Music streaming Music publishers
Source: Oxford Economics services (audio)
5.3 TOTAL EXPORTS
Given the estimates presented To give a sense of scale, this The extra-EU exports estimate
in Sections 5.1 and 5.2, we €9.7 billion figure is around 1.9 is conservative because not all
found that the music sector in times larger than exports made export revenue streams were
the EU27 and UK generated by the European audiovisual included in the study (e.g.
some €9.7 billion in export sector in 2018.24 Alternatively, at data was not available for all
earnings from the rest of €9.7 billion, EU27 and UK music collectively managed music
the world in 2018. A more exports generated 13% more in export revenues or revenues
detailed breakdown by exports revenues than extra-EU exports from international concerts/
category can be found in Fig. 9. of all European GI-protected tours in non-EU countries).
wines in 2017.25
Fig. 9. Export earnings from the sale of goods, digital goods and services produced by the
EU27 and UK music sector to the rest of the world in 2018
€ millions
3,500
3,000 3,330
2,500
2,000 2,350
1,500
1,000 1,220 1,130
960
500 680
0
Music-related Record Music streaming Music Music CDs and Musical
goods (music companies services (audio) publishers Vinyl records instruments
share of value)
Source: Eurostat COMEXT, Oxford Economics
24
AVdata4Europe figures, available at: https://avdata4europe.eu/key-data/
25
Source: European Commission, 2019. Study on the economic value of EU quality Schemes, geographical indications (GIs) and
traditional specialities guaranteed (TSGs). Table 5, Page 18.
30 31
6. CONCLUSION
The music sector makes a
€81.9 billion
substantial contribution to the
European economy. Across
the EU27 and UK, it was
estimated to have supported a Total GVA contribution to
€81.9 billion GVA contribution
GDP in the EU27+UK
to GDP in 2018. The sector
sustained the employment
of some 2.0 million people,
2.0 million
equivalent to 1 in 119 jobs
across EU27 and the UK. It
also supported €31.0 billion
in tax receipts and generated Total jobs supported by the
€9.7 billion in export revenues. music sector in the EU27+UK
Within the EU27 countries,
excluding the UK, the music
€31.0 billion
sector made a similarly
significant contribution. In
2018, the sector supported
€66.3 billion gross value
added contribution to GDP. Total tax contribution of the
Some 1.7 million people’s music sector in the EU27+UK
employment depended on
music, equivalent to 1 in
every 121 people employed in
the EU27. The music sector
contributed €26.2 billion in tax
receipts in 2018.
€9.7 billion
Export revenue
(conservative estimate)
32 33
7. BIBLIOGRAPHY
Alphabet. 2018. “Alphabet Annual Report 2018.”
Berkowitz, I. S. 2019. “Watchtime Canada: How YouTube Connects Creators & Consumers.”
Billboard. 2020. “Why YouTube and the Music Biz Are Getting Along Better Than Ever.”
CISAC. 2019. “Global Collections Report 2019 .”
Comscore. 2017. “The 2017 U.S. Mobile App Report.”
Council of the European Union. 2017. “2018 EU Budget Adopted.”
Department for Education. 2019. “School Workforce in England: November 2018.”
Entertainment Retailers Association. 2019. “Yearbook 2019.”
European Audiovisual Observatory. 2019. “Audiovisual Media Services in Europe; Market Insight.”
European Commission . 2018. “A New European Agenda for Culture.”
European Commission, 2019. “Study on the Economic Value of EU Quality Schemes, Geographical
Indications (GIs) and Traditional Specialities Guaranteed (TSGs).”
European Commission. 2020. “EU Expenditure and Revenue 2014-2020.”
Eurostat. 2020. “Structural Business Statistics.”
EY. 2014. “Creating Growth: Measuring Cultural and Creative Markets in the EU .”
Institute for Communication Studies at Friedrich-Schiller-Universität Jena (IfKWJ). 2015.
“Musikwirtschaft in Deutschland.”
IFPI. 2019. „Music Listening 2019.“
IFPI. 2019. “Global Music Report 2019.”
IFPI. 2019. “Record Companies: Powering the Music Ecosystem”.
Leontif, W. 1986. “Input-Output Economics.”
Live DMA. 2020. “The Survey Live Music Venues & Clubs in Europe – Facts & Figures.”
Live Nation. 2019. “Annual Report 2018.”
Music and Copyright. 2020. “Global Recorded-Music and Music Publishing Market Share Results
for 2018.”
National Public Media. 2020. “The Smart Audio Report.”
OECD. 2018. “Inter-Country Input-Output (ICIO) Tables.” oe.cd/icio.
Office for National Statistics. 2020. “Annual Business Survey - 2018 Revised Results”
Pollstar. 2019. Worldwide Ticket Sales 2018.
PwC. 2017. “A New Benchmark for the Valuation of Sound Recordings.”
UK Music. 2019. “Music By Numbers 2019.”
UK Music. 2014. “The Economic Contribution of the Core UK Music Industry.”
World Intellectual Property Organization. 2015. “Guide on Surveying the Economic Contribution of
the Copyright-Based Industries.”
34 35
APPENDIX: DATA AND

METHODOLOGY
DATA SOURCES The data from the three Music publishing Communication Studies at CMOs at the same time) were Authors
major record companies were Friedrich-Schiller-Universität counted only once in their
Record companies aggregated. Averages were Similar to our analysis of Jena (IfKWJ). This study country of residence. This Like performers, music authors
taken from the data supplied record companies, a bespoke estimated gross value avoided the problem of double analysed in this study are
A bespoke data request by the independent record data request was the primary added for recording studios or indeed multiple-counting of people whose main economic
was completed by the three companies and combined with data source for the music in Germany, and this was all members). The number of impact involved the earning
major record companies IFPI data on the total revenue publishing segment. Data compared with the Eurostat music performers was sourced of income from the licensing
(Sony Music Entertainment, which the independents are returns were received from gross value added data for from CMOs and therefore do of their musical works or
Universal Music Group and calculated to have earned. the publishing arms of the recording studios’ parent not include performers who compositions. To estimate this
Warner Music Group) and a The two sets of data were three major record companies, category, NACE code 59.2. The have not signed up with CMOs. group’s aggregate income
range of independent record individually modelled and as well as a selection of ratio of recording studio GVA within the EU27 and UK,
companies across Europe that combined into an estimate for independent publishers both to the broader NACE category To calculate the performers’ we surveyed GESAC/CISAC
were members of IMPALA. record companies as a whole. large and small. The data we of sound recording and music direct gross value added, IFPI member organisations. These
The data request asked for received from the sample of publishing activities’ GVA spoke to the International CMOs provided data on both
financial information about To estimate employment independent publishers were generated by this German Federation of Musiciants the number of domestic
their operations (including within independent record scaled up to represent the study was then applied to the (FIM) and we made use of songwriters/authors that they
their export earnings from companies in the EU27 and whole independent sector of remaining nations’ Eurostat two previous music industry distributed to in 2018, as well
outside of the EU and UK), the UK, we utilised data the market by using market data to estimate the impact studies. These were the as data on the aggregate
their employment, and returns from our bespoke share data sourced from Music of recording studios across 2019 “Music by Numbers” monetary value of those
procurement from the rest of survey, combined with the and Copyright.27 The data the EU27 and UK. The same report by UK Music, and distributions to domestically
the music sector and other aforementioned list of 7,400 returns from independent methodology was applied with the 2015 “Musikwirtschaft resident authors (thus
industrial sectors. They were record companies. publishers were used to respect to employment. in Deutschland” study. Both avoiding double-counting of
asked to disaggregate the model the employment and studies present estimates of all members). As the number
information they provided by The European Commission procurement profiles of a Performers GVA and employment for of authors were sourced from
the operations resident in the defines a large firm as having typical independent publisher music performers, allowing CMOs they do not include
EU27 and the UK. The record 250 or more employees, by calculating the average of As music performers are us to calculate a productivity composers or songwriters
companies were asked to earning an annual turnover ratios of GVA to procurement, people rather than corporate estimate for them. We then who have not signed up with
provide information by type more than €50 million, or a employee compensation, and entities and their main applied the average of these CMOs.
of activity and to isolate the balance sheet total greater employment. This was scaled economic impact involves productivity estimates (GVA
contribution they make from than €43 million.26 On this up to reflect the total market their earnings, we obtained per head), adjusted using To estimate the direct gross
producing music as opposed basis, we split the independent size and used in modelling data on the number of Eurostat purchasing power value added impact authors
to their other activities record companies into large alongside the major publishers’ performers (i.e. recording parity (PPP) data on a generate we first calculated
(such as merchandising and and those that are small and data. artists and musicians, not country by country basis, to their estimated total revenue.
publishing). medium-sized enterprises including dancers or other performer numbers across The 2015 “Musikwirtschaft
(SME). For these large Recording studios categories of performers) the remaining EU nations to in Deutschland” study,
In addition, IFPI asked its independent companies, from CMOs’ (joint societies or create EU27 and UK totals. provided a breakdown of the
national trade association we used the mean average Data on recording studios was performers’ CMOs) distribution We then applied ratios for different income streams for
members and IMPALA estimate of the survey sourced from Eurostat. Data lists across the EU27 and GVA to performers’ spending music authors, which listed
colleagues to provide respondents‘ headcount of 612 was extracted for NACE code UK. These CMOs provided on goods and services, as distributions from CMOs as
information on the number people. For the SME record 59.2, sound recording and data on both the number of well as GVA to employment 58.4% of their income. We
of record companies in companies, we applied the music publishing activities, domestic performers that costs, both sourced from therefore scaled up the GESAC
each of the 28 countries most commonly appearing which included the activities they distributed revenue to the “Musikwirtschaft in members’ distributions data
(including locally incorporated headcount number from our of sound recording studios. To in 2018, as well as data on Deutschland” study in order for 2018 to reflect the total
subsidiaries of the majors). set of survey returns, which isolate the recording studio the aggregate monetary to model the indirect and income of songwriters/authors
This resulted in identifying was 2 people, to reflect the component of these data, we value of those distributions induced impacts of music within the EU27 and UK and
some 7,400 record companies large number of very small used the 2015 “Musikwirtschaft to domestically resident performers. compared that with the data
established and trading in the record companies across the in Deutschland” study carried performers, thus payments to on procurement within the
28 countries. EU27 and the UK. out by the Institute for non-resident members (who sector provided by music
might be members of several publishers. We then applied
26
https://ec.europa.eu/eurostat/web/structural-business-statistics/structural-business-statistics/sme#:~:text=SMEs%20are%20
defined%20by%20the,Recommendation%20of%206%20May%202003).
36 27
Available at: https://musicandcopyright.wordpress.com/tag/market-share/#:~:text=Music%20%26%20Copyright%20estimates%20 37
the%20company’s,publisher%20to%20increase%20its%20share.
a total revenue to gross value Collective management tickets for a wide range of offices in the countries where Using the Live DMA report, The results were then re-
added ratio, also provided organisations (CMO) entertainment genres through the company has subsidiaries. Oxford Economics identified scaled to be representative
by the “Musikwirtschaft Ticketmaster, which they own, We therefore estimated that these 2017 metrics for the full of the EU27 and the UK, with
in Deutschland” study, to In this report, we estimated we conservatively looked at in 2018 LiveNation employed Live DMA membership: non-EU states in the survey
calculate music authors’ GVA the impact of Author CMOs, its revenue and costs for the about 1,700 and 450 permanent excluded, and EU countries
contribution to GDP across Performer CMOs, Producer first two segments plus the staff in the EU27 and the UK, • Employment. This is taken not covered added in on the
to be the number of paid
Europe. CMOs and Joint (producer- estimated number of fans respectively. Using the same basis of country shares in
workers (including interns
performer) CMOs who attending LiveNation’s concerts methodology, we estimated the total consumer spending in
and trainees, etc), excluding
Artist managers collectively managed certain as a share of their total tickets company employed an average 2017. These results were then
the comparatively large
uses of music rights. For sold (19% of all tickets sold). of 3,700 and 1,000 seasonal grown forward to 2018 on
number of volunteers.
In order to estimate the Author CMOs, GESAC member LiveNation’s accounts revealed and part-time employees in the the basis of changes in each
economic impact of music organisations were surveyed, that in 2018 it held 30.9% of two geographies across the • Direct GVA. This is taken nation’s consumer spending,
artist managers across and information was provided the concerts which it promoted year, respectively. to be the sum of personnel with tax impacts worked out
Europe, we held interviews by them on employment and outside of North America costs and the surplus of at that stage based on various
with the European Music personnel costs in 2018. These but provided no further Pollstar (2019) estimated that all revenues (including tax-to-income ratios from
Managers Association individual responses were geographical details. Looking LiveNation was responsible ticketing, catering, other official sources. The taxes
(EMMA). We also made aggregated and modelled. at country-by-country data on for 59% of all ticket sales by audience revenues, and covered here are employers’
use of the highly detailed the spend on live music in the the top 100 promoters in 2018. public funding) over all and employees’ social security
information contained within For performer and producer countries where LiveNation In the absence of additional outlays. contributions, employees’
the 2015 “Musikwirtschaft CMOs, data on employee has subsidiaries outside of information on ticket sales income tax, and corporation
in Deutschland” study to compensation and purchases North America, 65% occurred for live music events by other • Total procurement. This tax.
is taken to be the sum of
calculate a ratio of music artist of inputs of goods and in the EU27 and the UK. So companies, all of which are
the three non-personnel
managers to music performers services were taken from we estimated that 20% of the privately held, we scale up our The next step was to scale
cost categories, namely
in Germany. We then applied responses provided by IFPI economic activity LiveNation estimates for the company by the results upwards to reflect
direct programme costs
this ratio of manager to affiliated music licensing undertook, in its concerts and 1.69 (1/59%) to estimate the activities not covered, such as
(payments to musicians
registered performers to the companies (MLCs) and annual sponsorship segments - in the scale of the whole industry. large festivals. This relied on
and music production
total numbers of performers reports published by the EU27 and the UK, as well as a large-scale literature review,
companies, etc),
that appear on MLCs CMOs. The relevant financial 4% of the economic activity The activities of music venues with scaling ratios worked out
accommodation costs
distribution lists. This allowed and employment data were in its ticketing segment in and festival organisers using those economic studies
(property rental, building
us to estimate the number of extracted from these individual 2018 - was attributable to the of national music industries
maintenance, utilities, etc),
music artist managers across reports or were provided promotion and staging of The starting point for these where a ‘concert venue and
and other outlays (for e.g.
the EU27 and UK. To calculate directly by the CMOs in live music events in the same estimates was provided by festival organiser’ sector was
catering supplies, transport,
the gross value added the question. geographic markets. We pro- Live DMA and a 2017 survey specifically identified (as
and professional and
managers generated, we rata the financial data of Live of its members concerned distinct from the wider ‘live
business services).
used an average productivity Live event producers Nation accordingly, splitting with the revenues, spending music sector’ of which it forms
figure provided in the German the company’s costs data in and employment at the live a part). This allowed the sector
study. In order to calculate To estimate the economic each segment into employee music performance venues results for direct employment,
the supply chain and wage- contribution of promoting compensation and procurement in its membership network direct GVA, and direct taxation
induced spending impact of and putting on live music using information published across Europe.28 The results to be estimated.
artist managers, we applied events we looked in the by the Office for National in the survey had been scaled
ratios of gross value added to first instance at LiveNation’s Statistics on Standard Industrial up by Live DMA from the 600
procurement, and to employee annual accounts for 2018. The Classification 79.9. LiveNation’s responding organisations,
compensation sourced from company is by far the largest 2018 accounts reveal that the to be representative of the
the German study. in the live music industry. company employed 3,300 2,600 organisations, across 15
LiveNation’s annual accounts full-time employees outside countries, in its membership
split the company’s revenue of North America. We formed at that time. The survey was
and costs into three segments: an estimate of the location of concerned only with the
concerts; sponsorship; and these staff using employment venues’ music-related activities.
ticketing. As LiveNation sells data from national statistical
38 28
Live DMA. 2020. “The Survey Live Music Venues & Clubs in Europe – Facts & Figures.” 39
Finally, the starting point for this The estimates of the music the music sector and other by placing advertising In the absence of any further revenue, procurement,
sub-sector’s wider economic merchandising’s procurement industrial sectors. The data alongside video content data about Alphabet’s employee compensation,
footprint was also worked out: and payment of employee from the returns was scaled and is believed to pay the European operations and staff etc) for specialised audio
compensation was entered up by the responding firms’ creators of those videos, or working on YouTube in Europe, and video equipment stores,
• Procurement by industry into Oxford Economics’ Global market share to estimate the the rights owners of the music we assumed that Alphabet’s non-specialised stores
of supplier was estimated
Economic Impact Model to size of the whole sector. used in those videos, 55% of various business functions with food, beverages or
based on the non-personnel
estimate the indirect (supply the advertising revenue).32 were equally efficient, so we tobacco predominating
cost categories in the Live
chain) and induced (wage Music streaming – video Dividing US$3 billion by used the ratios from within (i.e. supermarkets), and
DMA survey. Spending on
consumption) impacts. 55% suggests YouTube its 2018 annual accounts non-specialised retailers.
accommodation and ‘other’
Data on the economic earned around $5.45 billion to estimate employment We weighted together the
items provided the starting
Digital service providers activities of the music video in revenue on advertising and gross value added. We ratios for the three retailing
point for this sector’s
streaming services is very hard accompanying music videos combined Alphabet’s accounts sectors in proportion to their
contribution to the indirect
In 2018, there were 108 to obtain. We know that in globally. This estimate relates data on type of spending, with share of consumer spending
impact, but spending on
licensed digital music services 2018, YouTube was the only only to monetised (through input-output data to derive its at 10.7%, 6.7% and 11.3%.
direct programme costs was
in the EU27 and the UK (not major supplier of music video advertising) videos and does procurement and employee This enabled us to derive
excluded as these suppliers
counting separately the streaming services in the not include estimates for compensation associated estimates of the direct impact
are themselves part of the
national subsidiaries).29 IFPI EU27 and the UK, estimated the value of other Alphabet with streaming music videos of selling physical music, the
music industry.
provided data on the market to account for almost 100% owned services that might to estimate the indirect and retailers’ procurement, and
• The spending power of share of audio streaming of the legitimate (licensed by have derived revenue from the induced impacts. the employee compensation
workers in the sector, which subscription services, such as music right holders) music internet traffic generated by they paid so that we could
contributes to the induced Spotify, Apple Music, Deezer, video streaming market. the music videos available on Physical music retail calculate the direct, indirect
impact, was calculated Amazon Music Unlimited and YouTube’s ultimate owner YouTube. In the absence of any and induced impacts for those
as total personnel costs, YouTube Music. is Alphabet Inc. In 2018, the disclosures about the location Data on the retail value four countries.
net of all social security company published global of YouTube’s advertising of purchases of physical
contributions and IFPI’s Music Consumer Insight consolidated accounts, which revenue generating viewers, music (CDs, vinyl, etc) in To calculate the retail value of
employees’ income tax. report 201930 provided data covered all their services we assumed these revenues four countries (Austria, physical music in the other 24
on the share of music listening (including Android, Chrome, reflected the geographical Germany, Portugal, and UK) countries, we used statistics
Music merchandising time in key EU markets in 2018. Gmail, Google Drive, Google split of Alphabet’s total in 2018 was sourced from on the sales volume of CDs
At the time, 86% of music Maps, Google Play, Search, and revenue. Alphabet’s 2018 Verband der österreichischen and vinyl in 2018 contained in
One of the major music-specific online was consumed through YouTube). The company did annual report stated that the Musikwirtschaft, IFPI’s “Global Music Report”.
merchandising companies on-demand streaming – both not, and still does not, disclose company earned 33% of all of Bundesverband The publication contains
in Europe was approached audio and AV streaming. information on the income and their revenue from the Europe, Musikindustrie, Associação volume data for 15 countries
confidentially and asked to number of employees involved the Middle East and Africa Fonográfica Portuguesa out of the EU27 and UK in 2018.
complete a bespoke data Music streaming – audio in providing its individual (EMEA) region. To estimate and the Entertainment We calculated the average
questionnaire. Their response services, let alone one of its the scale of their revenues Retailers Association percentage decline in sales
contained financial information Data for the audio music services by content type. Our from the EU27 and the UK, (2019), respectively. The volumes across the 15 countries
(including export earnings streaming services part of methodology was therefore we used those markets’ share Entertainment Retailers contained in the “Global Music
from the rest of the world), the digital music distribution based on some data and of recording industry’s video Association’s data for the UK Report”. We then applied this
employment and procurement sector were based on the assumptions. streaming revenues from the percentage decline to the
information. As elsewhere, bespoke survey return sent EMEA region (at 64% and showed that in 2018, 10.7% 2017 data for the remaining
the data supplied was split by to companies in the sector. YouTube claims to have paid 26%, respectively) using IFPI’s of consumer spending on countries to estimate volume
the location of its operations The data request asked for the music business as a whole “Global Music Report” data for music was at specialist over- figures for 2018. We then
into those located in the financial information about US$3 billion in 2019.31 YouTube 2018. However, we recognise the-counter shops (i.e. record multiplied the volume of CDs
EU27 and the UK. The results their operations (including has also stated that its typical that the above methodology stores), supermarkets had and vinyl sold by the average
were grossed up to the entire their export earnings from costs of acquiring all types of is not perfect, given that a 6.7% market share and price of CDs and vinyl for the
segment by the company’s outside of the EU27 and the content, including music, is there is no complete publicly home delivery a further 11.3% two countries for which we
market share, calculated from UK), their employment, and 55% of its revenue (YouTube available data on how and to share. Eurostat publishes have data that are broken
Licensing International data. procurement from the rest of generates most of its revenue what extent music available on data on various aspects down into each type of physical
YouTube is monetised. of retailing (employment, music (Austria and Germany).
29
IFPI and www.pro-music.org listing for 2018
30
Available at: https://www.ifpi.org/wp-content/uploads/2020/07/Music-Listening-2019-1.pdf Irene S Berkowitz, Watchtime Canada: How YouTube Connects Creators & Consumers ([n.p]: Ryerson University/Faculty of
32
40 31
Available at: https://www.billboard.com/articles/business/8550838/lyor-cohen-youtube-music-billboard-cover-story-interview-2020 Communication and Design Audience Lab, 2019) https://sites.google.com/view/watchtime-2019 41
To account for price differences Musical instrument retail Radio broadcasting on GVA, employment, total broadcasting airtime devoted assigned an 85% share of the
across the EU, this was then personnel costs, and spend to music (68%), calculated production values of these
scaled by the difference in the Input data for musical Data on the radio broadcasting by the industry on inputs of from data presented in goods. This is based upon a
price of a particular best-selling instrument retail was sourced sector (defined as NACE code goods and services (which PWC’s “A new benchmark metric found in National Public
global artist’s latest CD album from the Eurostat SBS 60.1 Radio Broadcasting) includes, amongst others, for the valuation of sound Media’s Smart Audio Report
on Amazon in each of the six database. As the SBS database was sourced from the procurement of licences recordings (2017)” report. For (Spring 2020),40 stating that
European countries which have does not provide data at a Eurostat SBS database. We from music right holders) products that played physical 85% of smart speaker users
bespoke Amazon sites. For the disaggregated enough level downloaded information not intended for resale in the music formats or were for play music on their devices.
remaining 22 countries we have to allow us to directly extract on the sector’s gross same condition, for television sound recording, such as
used the Eurostat purchasing data for musical instrument value added, employment, broadcasters. From here, 7% of microphones, we made the After music’s share of
power parity estimates for retail, data for the broader employee compensation, and the total GVA and employment assumption that these were production value was isolated,
recreation and culture.33 We industry category were scaled procurement. associated with television predominantly for music use, we applied ratios of production
then multiplied that by the down. Data were extracted for broadcasters was attributed and therefore took 100% of value to GVA, procurement,
“Global Music Report” statistics NACE code 47.59 (Retail sale To apportion the share of to the music industry, their production value. and employee compensation
on the quantities of CDs of furniture, lighting equipment radio broadcasting that is based on the percentage of taken from the Eurostat
and vinyl sold in the relevant and other household articles in attributable to music (as television channels which were For the manufacturing of Structural Business Statistics
markets to get the retail sale specialised stores). To remove opposed to talk-based or dedicated to music, sourced smartphones, we used data (SBS) database. All of the
value and used the ratios from the portion of this data that other programming) we used from the European Audiovisual from a Comscore study on products chosen fit into NACE
Eurostat for the retail sector in was not related to the retail PWC (2017) data on the Observatory.36 mobile app usage in the US categories 26.2 (Manufacture
the relevant country. of musical instruments, we percentage of commercial (2017).37 This suggested that of computers and peripheral
used the GVA ratio of SIC radio airtime accounted for by Music-related goods 18% of time spent on mobile equipment), 26.3 (Manufacture
Musical instrument codes 47.59/1 to 47.59 found playing music.35 The data were manufacturing apps was spent on music of communication equipment),
manufacturing in the UK Annual Business available for nine countries consumption. We therefore or 26.3 (Manufacture of
survey for 2018.34 This showed in the study, namely, Austria For this category we attributed 18% of the value of consumer electronics).
In estimating the impact that musical instrument retail (78% of airtime), Bulgaria estimated the impact of the smartphone production in the We therefore applied the
of musical instrument represented approximately (74%), Denmark (40%), manufacturing of goods EU27 and the UK to music. appropriate GVA, employment
manufacturing, we first 7.3% of the 47.59 category in Finland (55%), France (68%), which were related to the In the absence of consumer and procurement ratios based
spoke to the Music Industries terms of GVA. This percentage Germany (70%), Italy (65%), production and consumption data on music usage time on on the category into which a
Association (MIA). Following was then applied to the Latvia (70%) and Sweden of music. The list of products laptop computers, we used specific good fell. Finally, GVA
this, data for musical Eurostat data to split out (75%). A similar-countries included sound recording data on private copy levies per worker ratios from the
instrument manufacturing was the musical instrument retail method was used to estimate and reproduction apparatus, for music-playing devices same Eurostat SBS categories
sourced from the Eurostat component. airtime percentages for the radios, and devices used to in Europe. We calculated an were applied to estimate
Structural Business Statistics other nations in this report, play music such as laptops, average percentage rate of employment associated with
(SBS) database. Data on gross Whilst the Eurostat data based on geographical smartphones, and tablet 2.585% based on data from the the production of each good.
value added, employment, total for musical instrument proximity and relative income computers. Stichting de Thuiskopie and
personnel costs, and purchases retail represented musical levels. the World Intellectual Property The calculated values for
of goods and services were instruments sold in specialised We began by extracting data Organization38 which covered spending on inputs of
extracted for the NACE code stores, we took this to Television broadcasting from Eurostat’s PRODCOM the Czech Republic, Estonia, goods and services and
32.2 (Manufacture of musical represent the entirety of database, which provided Greece, Poland, and Slovakia.39 employee compensation were
instruments). Where data were musical instrument retailing. For the activities of production values for our Using the private copy levy then inserted into Oxford
missing for countries, mainly We conducted an interview television broadcasters, selection of music-related percentage will almost certainly Economics’ Global Economic
for confidentiality reasons, with the Music Industries data on GVA, employment, goods. We then assigned lead us to underestimate Impact Model to estimate the
these were estimated by using Association (MIA), the trade employee compensation, percentages of the production the true music-attributable indirect and induced impacts.
EU totals. body for the UK musical and procurement spend was values of the goods in the share of the value of laptop
instrument industry, which sourced from Eurostat’s SBS following manner. For goods computers, so our estimates
confirmed that the vast database, for NACE code 60.2, related to the consumption can be taken as a minimum.
majority of musical instrument television programming and of broadcast music radio, we Finally, for goods relating to
sales occurred within broadcasting activities. This took an EU average figure the production of loudspeakers
specialised stores. provided the necessary data for the percentage of radio and audio amplifiers, we
33
Available at: https://ec.europa.eu/eurostat/web/purchasing-power-parities/visualisations 36
European Audiovisual Observatory, Audiovisual media services in Europe, 2019.
34
ONS. 2020. “Annual Business Survey - 2018 Revised Results.” 37
Comscore. 2017. “The 2017 U.S. Mobile App Report.”
42 35
PWC. 2017. “A new benchmark for the valuation of sound recordings.” 38
Available at: https://www.wipo.int/edocs/pubdocs/en/wipo_pub_1037_2017.pdf 43
39
This will produce a conservative estimate. If we were to take the same share of value as we used for smartphones (18%), this would
increase total GVA by €972 million and total employment by 26,000 people.
40
National Public Media, The Smart Audio Report, April 2020. URL: https://www.nationalpublicmedia.com/insights/reports/smart-
audio-report/
Retail of music equipment To estimate GVA and musical instruments to This same percentage was higher music education institutions, as well as the
(including consumer and employment associated with students. Therefore our applied to Eurostat data on institutions within Europe. The estimate provided by AEC,
studio/recording goods) the retailing of these products, estimates do not directly secondary schools’ spending estimate was provided on a to calculate the percentage
we first applied data on trade include these people. However, on employee compensation full-time equivalent basis, so we of tertiary-level teachers who
To estimate the economic and transport margins for it is noted that many freelance and the purchases of goods converted it into a headcount taught music. This percentage
impact of the retailing the Computer, electronic and music teachers are also and services to isolate the measure using Eurostat data was then applied to Eurostat
of manufactured goods optical products category employed as music teachers component related to music on the percentage of tertiary- data on procurement spending
used in the production or (CPA_C26) in Eurostat’s EU27 in educational institutions and education. level teachers who were in and employee compensation
consumption of music, we use and UK supply table to the elsewhere in the sector, so part-time employment, with by tertiary-level institutions
the same categories of goods calculated domestic supply their inclusion could likely lead An estimate of the number the assumption that anyone to estimate the spending
and their respective music- figures. Then we used ratios to some double counting. of music teachers employed working part-time undertook associated with music
attributable value shares as of gross margin on goods for at higher education half the hours of their full education. This was then
described in the section on resale to GVA, procurement We began by estimating the institutions in the EU27 and time colleagues . For music combined with the secondary-
the manufacturing of music- (purchases of goods and number of music teachers at the UK was provided by the teachers at tertiary level we level data and modelled using
related goods for consistency. services excluding those secondary and tertiary level Association Européenne des used Eurostat data on the the Oxford Economics Global
meant for resale in the same within the EU27 and the UK, Conservatoires, Académies de number of academic and Economic Impact Model.
Retailers earn margins on condition), employment, and assuming that the number of Musique et Musikhochschulen teaching staff employed
both the sale of goods employee compensation. dedicated music teachers at (AEC), a coalition representing by tertiary-level education
manufactured in Europe These ratios were calculated primary level was negligible
and imported from the rest using data from the Eurostat due to the more generalist Fig. 10. Product categories for which data was obtained
of the world. Therefore we SBS database, for the nature of education at that
began by estimating the total category Other retail sale stage. To estimate this, we used Product category
supply of these goods to in non-specialised stores. country-level data on numbers Musical instruments; parts and accessories of such articles
the EU27 and UK domestic The estimated data for of classroom teachers and Radio broadcast receivers (except for cars)
markets by summing the employee compensation academic staff by education
Radio broadcast receivers for motor vehicles with sound recording or reproducing apparatus
value of domestic production and procurement spending level across the EU27 and the
and imports of the included were then modelled using UK from Eurostat. We then Radio broadcast receivers for motor vehicles, n.e.c.
goods, and then subtracting the Oxford Economics Global estimated the percentage of Parts of radio receivers and transmitters
their respective export values. Economic Impact Model to these teachers that taught
Telephones for cellular networks or for other wireless networks
Import and export values for estimate the supply chain and music. For music teachers at
the EU27 and the UK were wage consumption impacts lower and upper-secondary Portable automatic data processing machines weighing max. 10 kg, such as laptop and notebook
extracted from the Eurostat of the retailing of music level institutions, we first computers and similar computers
COMEXT database and the equipment. calculated the percentage of Turntables, record-players, cassette-players and other sound reproducing apparatus
values of goods produced secondary-level teachers who
Magnetic tape recorders and other sound recording apparatus
within the studied region were Music teachers taught music at secondary
sourced from the Eurostat schools in England, using data Microphones and their stands (excluding cordless microphones with a transmitter)
PRODCOM database. The estimates of the GVA and from the UK Department for Single loudspeakers mounted in their enclosures
people employed as music Education School Workforce
Multiple loudspeakers mounted in the same enclosure
teachers that are presented Census 2018.41 The percentage
in this report represent those teaching music as a discipline Loudspeakers (excluding those mounted in their enclosures)
music teachers employed was then applied to Eurostat Headphones and earphones, even with microphone, and sets consisting of microphone and one
within educational institutions data on the total number of or more loudspeakers
at lower secondary, upper secondary-level teachers at all
Audio-frequency electric amplifiers (including hi-fi amplifiers)
secondary and tertiary levels. institution types in the EU27
There is a distinct lack of to estimate the total number Electric sound amplifier sets (including public address systems with microphone and speaker)
available data on freelance of music teachers employed Precious or semi-precious stones for styli (for record players)
music teachers, those who at lower and upper secondary Other parts and accessories of apparatus of sound recording or reproducing apparatus
privately teach music and level institutions in the EU27.
Parts of apparatus of microphones, loud speakers and amplifiers
44 41
Department for Education. 2019. “School Workforce in England: November 2018.” 45
Exports recreational services’ (e.g. in between different industries, Fig. 11. Our Global Impact Model captures how the music sector’s contribution spans economies
the case of live music concerts households, government, and
In estimating the exports abroad). the external sector. In essence, Standard approach … … plus global linkages
attributable to the music an I-O model is a table which
industry in the EU27 and UK, Our estimates of digital goods shows who buys what, and
our methodology can be and music services exports from whom, in the economy.
split between two categories, were therefore calculated Economic impact assessments
physical goods, and digital based on the bespoke survey utilise I-O models to describe
road
ain ab
goods and services, which we data we received directly how activity spreads along supplier p
approached in different ways from firms in the music sector. supply chains throughout tic ly ch n su plier
upp ig
sp
s
Dome
based on the data available. This reflected the income an economy, building on the s ad
end
abro
e
to
sp
DOMESTIC
for
that these European firms Nobel Prize winning work of nd
end
ECONOMY pe REST OF
Physical goods exports stated they earned from Wassily Leontief.42
e rs WORLD
Dom
customers located outside m
n su
For exports of music-related of the EU27 and the UK. As This study employed the
co
nd
es
wa
manufactured goods we were such, exports in this category Oxford Economics Global
es
tic
pe
able to extract data on export were limited to those of record Economic Impact Model, co
g
ts
values from the Eurostat companies, music publishers, which enables supply chains n su m
er sp e n d
profi
es
rs
COMEXT database (Fig. 10). and providers of audio music to be traced across countries. ag e
profi
w m
Then, to reflect the fact that
many of these goods may
streaming services. The model used OECD (2018)
data on global economic
fo re
ig n co nsu
ts
have additional uses outside For independent record structures and trade as its
of music, we took the same companies and independent foundation.43 It allowed us
shares of export values, as we publishers where we to model the music sector’s
did for the manufacturing and estimated revenues based supply chains as they crossed
retail of physical goods. Details on market shares (see the national boundaries, both Using the global I-O model to The method used to collect multipliers). The summation of
of the categories used can be record companies and music inside and outside Europe, calculate indirect and induced data on each segment of the these purchases represented
found in the table below. publishers methodology stimulating economic activity impacts music sector’s procurement the total production that
section), we estimated their as orders were made and by purchase type and location was generated by each
Digital goods and services respective export values by goods and services produced. Using the model enables of the suppliers are described segment of the music sector’s
exports using average ratios of exports the calculation of the music earlier in this Appendix. procurement. To calculate the
to total revenue, calculated from Using a global model is more sector’s indirect and induced Using the global I-O model, indirect contribution to GDP,
When compared to the survey returns we received. accurate than aggregating impacts. This involved this spending was aligned the gross output stimulated in
exports of physical goods, national ones as it captures identifying the expenditure to the industrial sectors in each industry in each country
data on digital goods exports the full extent of the supply that each segment of the each country from which was divided by sector-level
and services exports are far METHODOLOGY TO chain. National I-O models music sector made with inputs were sourced. Where gross value added to gross
less complete in government ESTIMATE THE INDIRECT for a single country treat its suppliers outside of the relatively little industrial detail output ratios, sourced from
statistics and availability is AND INDUCED IMPACTS imports as a ‘leakage’ and the sector––both those based in was available from the data, national statistical agencies
inconsistent across countries. expenditure is lost from the the EU27 and UK and those we drew upon patterns of for each country in the EU27
Data from official sources did Estimating the music sector’s model, providing no further in the rest of the world. We spending observed in similar and UK. The results were
not provide the necessary wider (indirect and induced) economic benefit (Fig. 12). excluded intra-music sector industrial sectors in the input- then aggregated to produce
information to allow us to impact in the EU27 and the This approach can lead to procurement so as not to output model. the total gross value added
reliably isolate the exports UK required the use of an understating the economic double count music sector stimulated by the music
of digital music and music- input-output (I-O) model impact of a sector. In contrast, firms both in the direct The model then calculated sector’s procurement from its
related services, as the data of the European economy. using a global model allows channel and then again in the the subsequent supply chain supply chain located in the
were generally included in An I-O model is a detailed expenditure down the music supply chain (indirect channel) purchases that occurred within EU27 and UK.
broader categories such representation of an economy, sector’s supply chains to exit and through wage spending the global economy (through
as ‘Audiovisual services’ showing the major interactions and re-enter the EU27 and the (the induced channel). the use of supply linkage
or ‘Personal, cultural, and and spending flows UK economies multiple times.
42
Wassily Leontief, Input-output economics (New York: Oxford University Press, 1986).
46 43
OECD. 2018. OECD Inter-Country Input-Output (ICIO) Tables. 47
OXFORD ECONOMICS
The employment supported music sector. Further data Again, the results for each
as a result of the indirect driven adjustments were segment were aggregated to Oxford Economics was founded in 1981 as a November 2020
contribution to GDP was made to take into account produce results for the whole commercial venture with Oxford University’s
estimated by dividing the households’ propensity to music sector. business college to provide economic All data shown in tables and charts are
value added stimulated in spend and save in each forecasting and modelling to UK companies Oxford Economics’ own data, except where
each industry in each country country. The estimated To calculate the impact of and financial institutions expanding abroad. otherwise stated and cited in footnotes, and
by labour productivity data household spending in each the individual segments Since then, we have become one of the are copyright © Oxford Economics Ltd.
for that country and industrial country was combined with we repeated the indirect world’s foremost independent global
sector. These productivity data income multipliers to estimate and induced methodology advisory firms, providing reports, forecasts This report is confidential to IFPI and may
were derived from national the gross output it stimulated but this time we included and analytical tools on more than 200 not be published or distributed without
statistical agencies. These in each industry in the 28 all procurement (including countries, 250 industrial sectors, and their prior written permission.
figures were them summed countries. purchases from other 7,000 cities and regions. Our best-in-class
to get the total employment segments of the music global economic and industry models and The modelling and results presented here
figure supported by the The second step involved industry). We called these analytical tools give us an unparalleled are based on information provided by third
sector’s procurement along its estimating the induced results the gross estimates. ability to forecast external market trends parties, upon which Oxford Economics has
EU27 and UK supply chain. impact that was generated We presented the results on a and assess their economic, social and relied in producing its report and forecasts
by people employed in each gross (including procurement business impact. in good faith. Any subsequent revision
The calculation of the induced segment of the music sector’s from other segments in or update of those data will affect the
impact was a two-step supply chain. To generate this the music sector) and net Headquartered in Oxford, England, with assessments and projections shown.
process. Data on employee result, the modelling used (excluding procurement from regional centres in New York, London,
compensation paid to all for calculating the indirect the rest of the music sector) Frankfurt, and Singapore, Oxford Economics To discuss the report further, please contact:
workers in each segment impact outlined above was for the record companies. This has offices across the globe in Belfast,
of the music industry in the extended to incorporate was to demonstrate the scale Andrew Logan
Boston, Cape Town, Chicago, Dubai, Dublin,
EU27 and UK was inserted income multipliers. This gives of their investment in the rest alogan@oxfordeconomics.com
Hong Kong, Los Angeles, Melbourne, Mexico
into the model. Effective tax the induced expenditure of the music sector, and how City, Milan, Paris, Philadelphia, Stockholm,
rate (including income tax and impact, which was translated it impacted the estimated Oxford Economics
Sydney, Tokyo, and Toronto. We employ
social security contributions) into value added, employment multipliers. 4 Millbank
400 full-time staff, including more than
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IFPI Music in Europe PDF

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IFPI Music in Europe PDF

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THE ECONOMIC

Whether in good times or tough times, music is there for us.

Music also has a powerful economic impact on Europe –

This report by Oxford Economics provides, for the first time, an

To put these into perspective, music’s economic contribution to

Appendix: Data and methodology36

THE ECONOMIC IMPACT

100 780 120

€9.7 billion 13% more than

Indirect and induced economic impact

EU27 findings EXPORT EARNINGS

As part of this study, we

1.4 THE STRUCTURE OF THE REPORT

The report is organised into the following chapters:

THE RECORDING INDUSTRY’S INTRA-MUSIC SECTOR PROCUREMENT

If we focus only on the impact of record

The second approach is to take the

Available at: https://www.consilium.europa.eu/en/press/press-releases/2017/11/30/2018-eu-budget-adopted/#:~:text=The%20

Fig. 8. Export earnings from the sale of services and digital

1,000 1,220 1,130

5.3 TOTAL EXPORTS

APPENDIX: DATA AND

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Appendix: Data and methodology36