The Economic Impact of Music in Europe: November 2020

THE ECONOMIC
IMPACT OF MUSIC
IN EUROPE
NOVEMBER 2020
Acknowledgments
In addition to the work carried out by Oxford Economics, this report would not be possible
without the significant input of the music community in Europe. I have no doubt that our
community will continue to work together to ensure that music’s contribution – both cultural
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.
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.
By quantifying these vital economic contributions, even above

and beyond music’s artistic and human benefits, this report is
intended to help guide EU and UK policymakers in support of a
healthy and robust European music ecosystem.
1
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
€81.9 billion
Music sector’s total GVA
90
80
€37.5 billion
Direct impact of the music sector
contribution to GDP in 1.5 × larger than the GDP
70
the EU27+UK contribution of the wine and
60 beer manufacturing sectors
Larger than the GDP of
9 of the 28 EU countries 50
(Luxembourg, Bulgaria,
Croatia, Slovenia, Lithuania, 40
Latvia, Estonia, Cyprus, Malta)
30
20
€66.3 billion
The music sector’s GVA 10
contribution to GDP in
the EU27 alone 0
2.0 million Total jobs supported

1.3 million directly employed
by the music sector
This is 1 in every 119 jobs 24% higher than the
European audiovisual sector
€9.7 billion 13% more than

exports of all European
Export revenue GI-protected wines*
(conservative estimate)
* Protected Designation of Origin +
Protected Geographical Indication
€31.0 billion Total tax contribution €26.2 billion

contribution to the
Equivalent to 19.4% of the entire EU budget EU27 alone
4
7,400
Record companies across 50
the EU27+UK**
** Data rounded to nearest 10
320
200
20
170
100
140
1,670 100 390
910
260
70
190
20
800 390
150
70
100
210 60
110 770 120
<10
<10
Every €1 directly
generated or invested
by record companies €2.3 billion
led to an additional €1.8 Record companies’
GDP contribution in other revenues from European
parts of the music sector music exports
value chain.
Data from 2018 and covers the EU27 and the UK unless stated otherwise.
5
EXECUTIVE SUMMARY
This report quantifies the gross value added, analysed in this report, the Gross Value Added
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
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
because the music sector, as with other creative guarantees that it is the actual economic
industries, is poorly captured by national contribution to the GDP that is measured –
statistical agencies’ data. So this report should something that is not achieved by adding up
help to better inform firms within the sector, the sector’s turnover for example.
policymakers, and other stakeholders as to the
music sector’s economic importance both in To produce this report, Oxford Economics
absolute terms and relative to other industries. conducted an economic impact assessment
on the music sector across the EU27 and UK.
For the purposes of this study, the ‘music This involved analysing the impact of the sector
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
WIPO Guide2 methodology: record companies; wages both by the sector itself and along its
music publishers; recording studios; authors; supply chain. Estimates of the sector’s impact
performers; artist management; collective are made for four metrics:
management organisations; music radio; music
television; digital music services; physical music • its gross value added contribution to GDP;
retail; live music event production; concert • employment;
venues; manufacturing and retailing of musical
instruments and music equipment; music • tax receipts; and
merchandising; and music teachers. • export earnings.
The scope of this exercise and the metrics used The report was commissioned by IFPI, which
to quantify the impacts of the music sector do is the trade body representing the recording
not represent the sector’s aggregated revenue industry worldwide.
or sales. In the simplest terms, the key metric
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
THE GDP SUPPORTED BY THE MUSIC SECTOR IN EUROPE
Total GVA contribution
We calculate that in 2018 the music sector supported a €81.9

€81.9 billion
The music sector
billion gross value added contribution to GDP in the EU27 and
supported a €81.9 billion
UK. The estimate of €81.9 bn in total economic impact should
gross value added
be taken as a minimum overall contribution to the GDP, which
contribution to EU27
would be considerably higher if we were able to better estimate
and UK GDP in 2018.
the value that music contributes to the economic activity
generated by film, television, advertising, and video gaming. To
give an indication of scale, this is larger than the GDP of 9 out
of the 28 EU countries (Luxembourg, Bulgaria, Croatia, Slovenia,
Lithuania, Latvia, Estonia, Cyprus, Malta) in the same year.
Direct economic impact

The music sector’s direct GVA contribution amounted to
€37.5 billion
€37.5 billion. This was 1.5 larger than the GDP contribution of the
EU’s historic and world-famous wine and beer manufacturing
sectors in the EU27 and the UK in the same year.
The music sector’s
The study finds that for every €1 in GDP the music sector
direct GVA
directly generated in 2018, it supported the creation of an
contribution.
additional €1.20 in GDP elsewhere in the European economy.
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
sector firms’ procurement from other firms within the music
sector itself. Record companies alone, however, had a higher
GDP multiplier of 2.8 which means that every €1 in GDP directly
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.
7
EU27 findings
€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
GVA contribution and our €81.9 billion total for the EU27 and UK consists of
to GDP in the the economic impact of the music sector in the UK, plus the
EU27 alone. additional impact of any purchases made by EU27 entities from
UK suppliers and vice versa, and comparable cross-border wage-
financed consumption. Consequently, this difference between
the two figures cannot be interpreted as the size of the UK music
sector’s economic impact on the EU27 and UK economies.
THE MUSIC SECTOR’S IMPACT ON EMPLOYMENT IN EUROPE
2.0 million In 2018, the music sector directly or indirectly supported

the employment of two million people across the EU27 and
UK economies, including people in full-time, part-time, and
The music sector
self-employed roles. This means that one in every 119 persons’
supported 2.0
employment in the 28 countries was dependent on the music
million people in
sector in some way.
employment across
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
processing, web hosting, internet search facilities, and news agencies)
8 4
AVdata4Europe figures, available at: https://avdata4europe.eu/key-data/
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.
EXPORT EARNINGS
In 2018, the music sector was conservatively estimated to have

earned €9.7 billion in revenue from exports to countries outside
€9.7 billion
the EU27 and UK. This amount was around 2.3 times larger than In 2018, the music
the amount the EU27 and UK earned from audiovisual exports sector exported
to the rest of the world.6 Alternatively, at €9.7bn, EU27 and UK €9.7 billion
music exports generated 13% more in revenues than extra-EU worth of goods
exports of all European GI-protected wines in 2017.7 and services to
countries outside
EU27 and UK record companies, music publishers, and audio the EU27 and UK.
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
devices for playing music such as radios, etc) generated a further
€5.0 billion in exports revenue for the EU27 and UK trade balances.
The extra-EU exports estimate is conservative because not all

export revenue streams were included in the study because of
data availability (e.g. data was unavailable for all collectively
managed music export revenues or revenues from international
concerts/tours in non-EU countries).
6
Available at: https://avdata4europe.eu/key-data/
7
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. 9
10
11
1. INTRODUCTION
1.1 OBJECTIVE OF THE REPORT 1.2 DEFINITION OF THE
MUSIC SECTOR
This report quantifies the The report also estimates the
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
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
an economic impact appraisal additional income into the World Intellectual Property
of the sector. This involves European economy, helping Organization’s (2015) Guide
quantifying the contribution to support extra employment, on Surveying the Economic
made by the music sector8, generate higher GDP and Contribution of the Copyright
and the economic activity it tax receipts. Industries.10 This defines the
stimulates across the rest of the core copyright industries
EU27 and UK economies by its Quantifying the size of the as “industries which are
procurement and payment of music sector is important wholly engaged in the
wages, which are subsequently so that its participants, creation, production and
spent in the consumer governments, and other manufacture, performance,
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
presented for three metrics: and UK’s GDP, job creation, and sale of works and other
fiscal receipts and trade protected subject matter.”11
1) Gross domestic product
balance. This report provides For the music sector we have
(GDP)
data about the sector that interpreted that to include
2) Employment
is often not captured in data those segments identified
3) Tax receipts
collected by national statistical in the left hand column of
agencies. Such agencies tend Fig 1. We have also used the
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
analysing turnover or the
produce tangible goods which are engaged in the
aggregated revenue of the
than industries producing production, manufacture and
music sector or of any one
intangibles (like the music sale, and renting or leasing of
part thereof.9 Each segment’s
sector) and the new digital equipment. Their function is
GDP contribution is typically
service sectors (like audio and wholly or primarily to facilitate
less than the revenue that
music video platforms). the creation, production,
sector earns, as purchases of
or use of works and other
goods and services used in
protected subject matter.”12
the production of the sector’s
The parts of the music sector
output (and by its suppliers) are
we believe that correspond to
not included. A GVA calculation
that definition are included in
is the only way of analysing a
the right hand column of Fig 1.
sector’s contribution to GDP
because, unlike turnover data, it
eliminates any double-counting
of revenues within the sector’s
supply chain.
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;
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.
12 10
WIPO Guide on Surveying the Economic Contribution of the Copyright Industries (2015, revised edition): https://www.wipo.int/
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).
Fig. 1. Definition of the music sector used in the report
Core Interdependent (and other related services)
Record companies Musical instrument manufacturing

Music publishers Musical instrument retail
Recording studios Music merchandise production and services
Authors/Songwriters Music merchandise retail
Performers Music teachers
Artist management Manufacture of music (consumer) equipment
Collective Management Organisations (CMOs) Retail of music (consumer) equipment
Radio Manufacture of studio/recording equipment
Music television Retail of studio/recording equipment
Digital music services (audio and video)
Physical music retail
Live music event production
Concert venues and festivals
(where the primary activity is music)
Source: World Intellectual Property Organization
1.3 CHALLENGES IN ESTIMATING THE SIZE OF THE MUSIC SECTOR
As in every economic impact A further challenge relates in another way. In addition,

study, the main challenges to estimating the number based on information from the
relate to data availability. For of people employed in the neighbouring rights collective
the purposes of this study, sector. Some people who management organisations,
we developed a bespoke work within the music sector some 349,000 performers
survey that was completed undertake multiple roles. This received income when the
confidentially by an array of is most obvious in the case recordings were broadcast
firms within the sector across of songwriters who perform or played in public.13 Given
Europe. We also drew on data their own material. Data one individual can be both a
from trade bodies, published from Grouping of Societies songwriter and a performer
annual accounts, other studies, of Authors and Composers these two groups include a
and a number of other sources, (GESAC) members show that large number of the same
including government statistics 459,000 people across the people. When calculating
where available and appropriate. EU27 and UK received income the total number of people
These are summarised in in 2018 for having the songs employed in the music
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
radio or television, or used author were counted only once.
13
In addition to their income from CMOs, performers also get revenue from elsewhere. For example, their digital revenues based on
their contracts with the record companies. 13
As part of this study, we

estimate the economic activity
the music sector supported
AN INTRODUCTION TO OUR
by its procurement across its ECONOMIC IMPACT ASSESSMENT
EU27 and UK supply chain.
A high proportion of this In this report the contribution the music sector makes to the
expenditure was intra-music EU27 and UK economies is investigated using an economic
sector purchases meaning that impact assessment. This involves quantifying the value of the
parts of the sector, e.g. record work undertaken by the music sector itself, plus the knock-
companies, were spending on effects of its spending on business supplies and wages in
large parts of their revenue the course of undertaking those activities. Three ‘channels
on other parts of the music of impact’ are therefore captured, as follows (and are also
sector.14 For example, the 7,400 summarised in Fig. 2):
record companies in the EU27
and UK are estimated to have • The direct impact relates to economic activity and
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
of the music sector, such as the study.
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
whole, we strip out the impact and UK suppliers (e.g. travel, IT, accounting services not
of these intra-music sector provided in-house).
purchases. This is necessary
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
in another segment’s supply these earnings in retail, leisure and other outlets. This channel
chain and, as such, is required of impact also includes the activity stimulated in these
for reliable calculation of the outlets’ supply chains, and that supported by the spending of
sector’s GDP, employment and those working in these consumer-facing industries.
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
using three metrics:
• gross value added contribution to GDP. This is easiest
to conceive as the value of the output produced by a
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”.
• employment measured on a headcount All results are presented for the calendar year
basis to facilitate comparisons with national 2018. This was selected as it was the most recent
statistical agencies’ employment data. It year for which all the data sources were available.
therefore includes anyone who is paid wages
regardless of the length of their working Our results are presented on a gross basis.
week or whether they work all year round. They therefore ignore any displacement of
Those who are paid as part of a contract for activity from other genres of entertainment
the provision of services will be included in or industries. Nor do they consider what the
the supply chain; and, resources currently used by the music sector,
or by their suppliers, could produce in the
• tax receipts generated by the economic absence of the music sector’s activity.
activity undertaken by firms and
employment incomes of their workers.
Fig. 2. The contribution the music sector makes to the European economy
DIRECT The music sector employs people.

IMPACT Its operations generate GDP and pay taxes.
It also spends money with

INDIRECT suppliers who employ staff,
IMPACT generate GDP and pay taxes.
They use other suppliers in turn.
Employees (including of the

INDUCED suppliers) spend their wages
IMPACT in the wider economy,
generating more GDP, jobs
and tax revenues.
Added together, these three

TOTAL effects—direct, indirect,
IMPACT induced—comprise the total
economic impact of the
music sector.
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
chain in all parts of the music
sector, from artists and record We estimate the music sector procurement and payment of
companies, to music retailers supported a €81.9 billion gross wages on GDP in the EU27,
and instrument makers, value added contribution to and the GDP supported by the
economic value is being GDP in the EU27 and UK in EU27 music sector’s supply
created. Through generating 2018. To give an indication of chains that passed through
profits, paying wages, and scale, this is larger than the GDP the UK. The supply chains of
purchasing goods and services, of 9 out of the 28 EU countries the EU27 music sector that
the music sector has a positive (Luxembourg, Bulgaria, Croatia, included UK firms as one
impact on GDP in Europe. This Slovenia, Lithuania, Latvia, or multiple links mean that
chapter quantifies the GDP Estonia, Cyprus, Malta) in the subtracting our estimates for
supported by the music sector same year.15 the EU27 from the EU27 and
in the EU27 and UK economies UK combined do not give 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
the estimates for the EU27
This study looks at the GVA and for the 28 countries is the
contribution to GDP, rather GDP generated by the music
than total revenues, as this sector in the UK, the impact
more accurately reflects of the UK music sector’s
the economic contribution
made by a sector or industry Fig. 3. The gross value added contribution to GDP supported
to an economy. In a highly by the music sector in the EU27 and UK in 2018
vertical sector like music, a
€ billions
total revenues metric would
see us counting revenues 90
81.9
multiple times along the music 80
sector supply chain, whereas
GVA captures only the value 70 21.6 21.6
created at each stage, thus not
being subject to any double 60
counting issues. 50 22.8 22.8
40
30
20 37.5 37.5
10
0
Direct Indirect Induced Total
Source: Oxford Economics
18 15
GDP data for 2018 sourced from Eurostat.
2.2 THE MUSIC SECTOR’S DIRECT CONTRIBUTION TO GDP
Analysis of the GVA same year.16 It was estimated

contribution to EU27 and UK to have made a €31.9 billion
GDP supported by the music contribution within the
sector by impact channel, European Union, with 81%
shows that 46% or €37.5 billion of the total contribution in
(Fig. 3) was generated by the 2018 within the EU27 and 19%
sector itself (its direct impact). within the UK.
To give a sense of scale, this is
1.5 times larger than the GDP
contribution of the wine and
beer manufacturing sectors
in the EU27 and UK in the
2.3 THE GDP SUPPORTED BY THE MUSIC SECTOR’S INDIRECT AND INDUCED IMPACTS
The music sector’s expenditure procurement from outside of wages stimulated another
on inputs of goods and services the sector (e.g. the purchase €1.20 in GDP contribution
from the rest of the economy of raw materials for industrial elsewhere in the economy.
stimulated a €22.8 billion manufacturing). On the This multiplier reflected the
contribution to GDP at firms in other hand, a low multiplier high level of intra-music
the sector’s European supply number can be indicative sector procurement (for
chain. This indirect impact was of sectors that are highly example, the investment
28% of the total impact. vertically integrated in their of record companies in
procurement chain or, in other artists and their managers)
The remaining 26% (€21.6 words, undertake most of their compared to procurement
billion) of the total impact was procurement spending within spending with suppliers from
supported by the payment of the sector itself. The music outside of the sector. This is
wages by firms in the music sector is a typical example consistent with the fact that
sector and along its supply of such a highly intensive or companies or entities in the
chain (known as the induced vertically integrated sector, music sector tend to purchase
impact). A proportion of the meaning that it will feature a lot of goods (e.g. licensing
wages paid are onward spent a higher direct impact and a copyrights, purchasing
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
and leisure items, and along all of session musicians, sound
these outlets’ supply chains. This report estimated the engineers, etc) from other
music sector’s GDP multiplier parts of the music sector itself,
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
which a sector stimulates sector’s own contribution) is captured in our definition of
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
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
employment supported
by the music sector in the The music sector itself was and music authors across
EU27 and UK economies in estimated to have employed the EU27 and UK.20 In the
2018. The estimates in this 1,305,000 people across the same year, record companies
chapter cover all forms of EU27 and UK in 2018 (Fig. 5). To and recording studios were
employment; full-time, part- put this into context, this was 2.1 estimated to employ 44,850
time, and freelancers, and are times higher than the number and 13,800 people, respectively.
disaggregated by the three of people that were employed
channels of economic impact in the information service It is worth noting that the
(direct, indirect, and induced). activities sector in 2018,18 number of jobs or roles in
24% higher than the direct the music sector was higher
employment in the European than the number of people
3.1 THE MUSIC SECTOR’S audiovisual sector19, and 16% employed (1,434,000 versus
TOTAL IMPACT ON larger than employment in the 1,305,000). This is because
EMPLOYMENT motor vehicle manufacturing some people fulfilled more
sector in the EU27 and UK in than one role (for example,
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
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
2018 the employment of 1 in number of people (50%) performer and a songwriter or
every 119 people in the EU27 were employed as performers author were counted only once.
and UK was dependent on the
music sector.17 Fig. 5. The employment supported by the music sector in the
EU27 and UK in 2018
Within the EU27 economies, Thousand people
the music sector supported the 2,250
employment of an estimated
1.7 million people, equivalent to 2,008
2,000
1 in every 121 people employed
335 335
in the EU27. As before, the 1,750
total employment estimates
do not yield themselves to 1,500 368 368
a simple mathematical sum
of EU27 and UK estimates. 1,250
However, this comparison
can be made for the sector’s 1,000
direct employment estimates
discussed further below. 750
1,305 1,305
500
250
0
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)
19
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.
3.3 THE EMPLOYMENT SUPPORTED BY THE MUSIC SECTOR’S INDIRECT AND INDUCED IMPACTS
The music sector’s We estimate the music sector higher employment multiplier.
procurement from the rest in Europe had an employment For instance, the employment
of the economy (excluding multiplier of 1.5 in 2018. This multiplier for record
intra-sector purchases) was means that for every thousand companies was 2.7, meaning
estimated to have supported people employed in the that for every 1,000 jobs at
a total of 368,000 jobs music sector, a further 500 record companies, 1,700 other
throughout its external supply people’s jobs were supported jobs are supported elsewhere
chain in the EU27 and UK in elsewhere in the EU27 and in the economy.
2018. The consumer spending UK economies. This reflects
financed by the payment the labour-intensive nature
of wages by firms in the of the sector and the high
music sector and its supply degree of intra-music sector
chain was estimated to have procurement. Some of the
stimulated 336,000 jobs sub-segments in the music
across the EU27 and UK. sector are estimated to have a
ESTIMATING THE VALUE OF MUSIC TO FILM, TV, ADVERTISING, AND VIDEO GAMES
Music plays a major role in supporting products and broadcasting sector made a direct
and programmes created for other mediums. contribution to GDP of €20.8 billion in 2017
Practically all film, television, advertising, and and employed 204,000 people.21 The present
video game content includes music that is used study included only the contribution of
to set the mood, create emphasis, and move dedicated music TV channels and did not
the audience. Whilst it is self-evident that music attempt to quantify the economic contribution
is an essential component of such content, made by music to those sectors in general.
assessing how much of the economic activity
generated by these mediums can be attributed There are two main approaches in deciding
to the music they contain is conceptually how much of the economic activity in these
problematic and hamstrung by data issues. sectors could be attributed to music. These
There is no economic consensus as to the best are (i) calculating the time for which music is
approach and there are a number of studies present in programs and broadcasts, video
looking at each of the relevant mediums, but games or advertising; and (ii) calculating the
the present study does not attempt to provide amount that is paid to right holders for the use
a reconciliation or analysis of the various of music. Both, however, have significant flaws,
methodological approaches. which we illustrate below using television as an
example. Moreover, even small variations in the
Yet, the issue is important as some of film, assumptions made for a potential share of that
television, advertising and video games contribution that was attributed to music could
sectors make a large economic contribution change the estimated impact of the music
across Europe, generating considerable sector by hundreds of millions of euros and
numbers of jobs, GDP, and tax receipts. thousands of jobs.
For example, the television programming
21
Source: Eurostat: Annual detailed enterprise statistics for services. 23
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
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
in the European economy. The sector’s exports earnings
sale of goods and services, is not an easy task and is Generally, data on the exports
both tangible and intangible, becoming more difficult. of physical goods are readily
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
income for the EU27 and of recorded music revenues goods across borders. Because
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
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
employment that would not physical goods are a small EU27 and UK in 2018.
otherwise have taken place. and declining proportion of
the music sector’s revenue, As some of the goods included
This chapter presents including exports revenue. in this section may have
conservative estimates of Indeed, the vast majority of multiple uses that extend
export earnings generated by the music sector’s exports – beyond music, we have taken a
the music sector in the EU27 be they, for example, digital percentage of their value that
and UK selling to individual and streams, downloads or live we can attribute to the music
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
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.
content creation to instrument challenges, our estimates
manufacture. Consequently, of music sector exports to In 2018, the export value of
the exports generated by the outside of the EU27 and UK physical goods attributable to
music sector encompass the include estimates based on the EU27 and UK music sector
sale of goods, and services Eurostat’s COMEXT database totalled €5.0 billion. Of this
produced by the music sector for physical goods and data total, €2.0 billion came from
in the EU27 and UK. from our bespoke survey of the export of sound recording
companies for digital goods and reproduction apparatus,
and services. As we only which includes headphones,
surveyed record companies, speakers, microphones, and
music publishers, and other equipment for the
providers of music streaming recording of sound (Fig. 7).
services (audio), our estimates An additional €1.0 billion was
for service and digital goods earned from the music-related
exports only cover these export of smartphones, tablets,
three export sectors. They do and laptop computers. EU27
however reflect information and UK exports of recorded
provided by the firms CDs and Vinyl records were
themselves, so the data have a worth a combined €960
high level of accuracy. million. The sale of musical
instruments generated €680
million in export revenues for
EU27 and UK manufacturers in
the same year.
28
Fig. 7. Export earnings from the sale of physical goods produced by the EU27 and UK music
sector to the rest of the world in 2018 (share of value attributable to the music sector)
€ millions
2,500
2,000
2,030
1,500
1,000
1,050
960
500 680
250
0
Sound recording Smartphones, Music CDs and Musical Radios
and reproduction tablets, and Vinyl records instruments
apparatus laptops
Source: Eurostat COMEXT
5.2 EXPORTS OF DIGITAL GOODS AND SERVICES
In this section we present Due to these limitations in In 2018, record companies,

estimates of digital goods the national and EU-level music publishers, and music
(digital music) and music- statistical data, our estimates streaming services collectively
related services exports from for the exports of digital goods earned €4.7 billion from the
the EU27 and UK to the rest of and music-related services exports of their digital goods
the world. As mentioned in the were calculated based on and services to the rest of
chapter introduction above, the bespoke survey data we the world. Out of this total,
estimating the value of digital received directly from firms in we estimated that record
goods and services exports the music sector. The estimates companies earned €2.3
presents more of a challenge reflected the income that these billion in exports, and music
than that of physical goods. European firms stated they publishers received a further
Data from official sources do earned from customers located €1.1 billion. Firms involved in
not provide the necessary outside of the EU27 and UK. the streaming of audio music
information to allow us to As such, the value of exports services earned just over
reliably isolate the exports in this category were limited €1.2 billion from customers
of digital music and music- to those of record companies, elsewhere around the globe
related services as the data are music publishers, and (Fig. 8).23
generally included in broader providers of music streaming
categories such as Audiovisual services (audio).
services or Personal, cultural,
and recreational services
(e.g. in the case of live music
concerts abroad).
Exports for music streaming services (audio) are calculated as the revenues of EU27 and UK streaming services associated with
23
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
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
major record companies were
Record companies aggregated. Averages were Similar to our analysis of
taken from the data supplied record companies, a bespoke
A bespoke data request by the independent record data request was the primary
was completed by the three companies and combined with data source for the music
major record companies IFPI data on the total revenue publishing segment. Data
(Sony Music Entertainment, which the independents are returns were received from
Universal Music Group and calculated to have earned. the publishing arms of the
Warner Music Group) and a The two sets of data were three major record companies,
range of independent record individually modelled and as well as a selection of
companies across Europe that combined into an estimate for independent publishers both
were members of IMPALA. record companies as a whole. large and small. The data we
The data request asked for received from the sample of
financial information about To estimate employment independent publishers were
their operations (including within independent record scaled up to represent the
their export earnings from companies in the EU27 and whole independent sector of
outside of the EU and UK), the UK, we utilised data the market by using market
their employment, and returns from our bespoke share data sourced from Music
procurement from the rest of survey, combined with the and Copyright.27 The data
the music sector and other aforementioned list of 7,400 returns from independent
industrial sectors. They were record companies. publishers were used to
asked to disaggregate the model the employment and
information they provided by The European Commission procurement profiles of a
the operations resident in the defines a large firm as having typical independent publisher
EU27 and the UK. The record 250 or more employees, by calculating the average of
companies were asked to earning an annual turnover ratios of GVA to procurement,
provide information by type more than €50 million, or a employee compensation, and
of activity and to isolate the balance sheet total greater employment. This was scaled
contribution they make from than €43 million.26 On this up to reflect the total market
producing music as opposed basis, we split the independent size and used in modelling
to their other activities record companies into large alongside the major publishers’
(such as merchandising and and those that are small and data.
publishing). medium-sized enterprises
(SME). For these large Recording studios
In addition, IFPI asked its independent companies,
national trade association we used the mean average Data on recording studios was
members and IMPALA estimate of the survey sourced from Eurostat. Data
colleagues to provide respondents‘ headcount of 612 was extracted for NACE code
information on the number people. For the SME record 59.2, sound recording and
of record companies in companies, we applied the music publishing activities,
each of the 28 countries most commonly appearing which included the activities
(including locally incorporated headcount number from our of sound recording studios. To
subsidiaries of the majors). set of survey returns, which isolate the recording studio
This resulted in identifying was 2 people, to reflect the component of these data, we
some 7,400 record companies large number of very small used the 2015 “Musikwirtschaft
established and trading in the record companies across the in Deutschland” study carried
28 countries. EU27 and the UK. out by the Institute for
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
the%20company’s,publisher%20to%20increase%20its%20share.
Communication Studies at CMOs at the same time) were Authors

Friedrich-Schiller-Universität counted only once in their
Jena (IfKWJ). This study country of residence. This Like performers, music authors
estimated gross value avoided the problem of double analysed in this study are
added for recording studios or indeed multiple-counting of people whose main economic
in Germany, and this was all members). The number of impact involved the earning
compared with the Eurostat music performers was sourced of income from the licensing
gross value added data for from CMOs and therefore do of their musical works or
recording studios’ parent not include performers who compositions. To estimate this
category, NACE code 59.2. The have not signed up with CMOs. group’s aggregate income
ratio of recording studio GVA within the EU27 and UK,
to the broader NACE category To calculate the performers’ we surveyed GESAC/CISAC
of sound recording and music direct gross value added, IFPI member organisations. These
publishing activities’ GVA spoke to the International CMOs provided data on both
generated by this German Federation of Musiciants the number of domestic
study was then applied to the (FIM) and we made use of songwriters/authors that they
remaining nations’ Eurostat two previous music industry distributed to in 2018, as well
data to estimate the impact studies. These were the as data on the aggregate
of recording studios across 2019 “Music by Numbers” monetary value of those
the EU27 and UK. The same report by UK Music, and distributions to domestically
methodology was applied with the 2015 “Musikwirtschaft resident authors (thus
respect to employment. in Deutschland” study. Both avoiding double-counting of
studies present estimates of all members). As the number
Performers GVA and employment for of authors were sourced from
music performers, allowing CMOs they do not include
As music performers are us to calculate a productivity composers or songwriters
people rather than corporate estimate for them. We then who have not signed up with
entities and their main applied the average of these CMOs.
economic impact involves productivity estimates (GVA
their earnings, we obtained per head), adjusted using To estimate the direct gross
data on the number of Eurostat purchasing power value added impact authors
performers (i.e. recording parity (PPP) data on a generate we first calculated
artists and musicians, not country by country basis, to their estimated total revenue.
including dancers or other performer numbers across The 2015 “Musikwirtschaft
categories of performers) the remaining EU nations to in Deutschland” study,
from CMOs’ (joint societies or create EU27 and UK totals. provided a breakdown of the
performers’ CMOs) distribution We then applied ratios for different income streams for
lists across the EU27 and GVA to performers’ spending music authors, which listed
UK. These CMOs provided on goods and services, as distributions from CMOs as
data on both the number of well as GVA to employment 58.4% of their income. We
domestic performers that costs, both sourced from therefore scaled up the GESAC
they distributed revenue to the “Musikwirtschaft in members’ distributions data
in 2018, as well as data on Deutschland” study in order for 2018 to reflect the total
the aggregate monetary to model the indirect and income of songwriters/authors
value of those distributions induced impacts of music within the EU27 and UK and
to domestically resident performers. compared that with the data
performers, thus payments to on procurement within the
non-resident members (who sector provided by music
might be members of several publishers. We then applied
37
a total revenue to gross value Collective management tickets for a wide range of
added ratio, also provided organisations (CMO) entertainment genres through
by the “Musikwirtschaft Ticketmaster, which they own,
in Deutschland” study, to In this report, we estimated we conservatively looked at
calculate music authors’ GVA the impact of Author CMOs, its revenue and costs for the
contribution to GDP across Performer CMOs, Producer first two segments plus the
Europe. CMOs and Joint (producer- estimated number of fans
performer) CMOs who attending LiveNation’s concerts
Artist managers collectively managed certain as a share of their total tickets
uses of music rights. For sold (19% of all tickets sold).
In order to estimate the Author CMOs, GESAC member LiveNation’s accounts revealed
economic impact of music organisations were surveyed, that in 2018 it held 30.9% of
artist managers across and information was provided the concerts which it promoted
Europe, we held interviews by them on employment and outside of North America
with the European Music personnel costs in 2018. These but provided no further
Managers Association individual responses were geographical details. Looking
(EMMA). We also made aggregated and modelled. at country-by-country data on
use of the highly detailed the spend on live music in the
information contained within For performer and producer countries where LiveNation
the 2015 “Musikwirtschaft CMOs, data on employee has subsidiaries outside of
in Deutschland” study to compensation and purchases North America, 65% occurred
calculate a ratio of music artist of inputs of goods and in the EU27 and the UK. So
managers to music performers services were taken from we estimated that 20% of the
in Germany. We then applied responses provided by IFPI economic activity LiveNation
this ratio of manager to affiliated music licensing undertook, in its concerts and
registered performers to the companies (MLCs) and annual sponsorship segments - in the
total numbers of performers reports published by the EU27 and the UK, as well as
that appear on MLCs CMOs. The relevant financial 4% of the economic activity
distribution lists. This allowed and employment data were in its ticketing segment in
us to estimate the number of extracted from these individual 2018 - was attributable to the
music artist managers across reports or were provided promotion and staging of
the EU27 and UK. To calculate directly by the CMOs in live music events in the same
the gross value added the question. geographic markets. We pro-
managers generated, we rata the financial data of Live
used an average productivity Live event producers Nation accordingly, splitting
figure provided in the German the company’s costs data in
study. In order to calculate To estimate the economic each segment into employee
the supply chain and wage- contribution of promoting compensation and procurement
induced spending impact of and putting on live music using information published
artist managers, we applied events we looked in the by the Office for National
ratios of gross value added to first instance at LiveNation’s Statistics on Standard Industrial
procurement, and to employee annual accounts for 2018. The Classification 79.9. LiveNation’s
compensation sourced from company is by far the largest 2018 accounts reveal that the
the German study. in the live music industry. company employed 3,300
LiveNation’s annual accounts full-time employees outside
split the company’s revenue of North America. We formed
and costs into three segments: an estimate of the location of
concerts; sponsorship; and these staff using employment
ticketing. As LiveNation sells data from national statistical
38
offices in the countries where Using the Live DMA report, The results were then re-
the company has subsidiaries. Oxford Economics identified scaled to be representative
We therefore estimated that these 2017 metrics for the full of the EU27 and the UK, with
in 2018 LiveNation employed Live DMA membership: non-EU states in the survey
about 1,700 and 450 permanent excluded, and EU countries
staff in the EU27 and the UK, • Employment. This is taken not covered added in on the
to be the number of paid
respectively. Using the same basis of country shares in
workers (including interns
methodology, we estimated the total consumer spending in
and trainees, etc), excluding
company employed an average 2017. These results were then
the comparatively large
of 3,700 and 1,000 seasonal grown forward to 2018 on
number of volunteers.
and part-time employees in the the basis of changes in each
two geographies across the • Direct GVA. This is taken nation’s consumer spending,
year, respectively. to be the sum of personnel with tax impacts worked out
costs and the surplus of at that stage based on various
Pollstar (2019) estimated that all revenues (including tax-to-income ratios from
LiveNation was responsible ticketing, catering, other official sources. The taxes
for 59% of all ticket sales by audience revenues, and covered here are employers’
the top 100 promoters in 2018. public funding) over all and employees’ social security
In the absence of additional outlays. contributions, employees’
information on ticket sales income tax, and corporation
for live music events by other • Total procurement. This tax.
is taken to be the sum of
companies, all of which are
the three non-personnel
privately held, we scale up our The next step was to scale
cost categories, namely
estimates for the company by the results upwards to reflect
direct programme costs
1.69 (1/59%) to estimate the activities not covered, such as
(payments to musicians
scale of the whole industry. large festivals. This relied on
and music production
a large-scale literature review,
companies, etc),
The activities of music venues with scaling ratios worked out
accommodation costs
and festival organisers using those economic studies
(property rental, building
of national music industries
maintenance, utilities, etc),
The starting point for these where a ‘concert venue and
and other outlays (for e.g.
estimates was provided by festival organiser’ sector was
catering supplies, transport,
Live DMA and a 2017 survey specifically identified (as
and professional and
of its members concerned distinct from the wider ‘live
business services).
with the revenues, spending music sector’ of which it forms
and employment at the live a part). This allowed the sector
music performance venues results for direct employment,
in its membership network direct GVA, and direct taxation
across Europe.28 The results to be estimated.
in the survey had been scaled
up by Live DMA from the 600
responding organisations,
to be representative of the
2,600 organisations, across 15
countries, in its membership
at that time. The survey was
concerned only with the
venues’ music-related activities.
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
sub-sector’s wider economic merchandising’s procurement industrial sectors. The data
footprint was also worked out: and payment of employee from the returns was scaled
compensation was entered up by the responding firms’
• Procurement by industry into Oxford Economics’ Global market share to estimate the
of supplier was estimated
Economic Impact Model to size of the whole sector.
based on the non-personnel
estimate the indirect (supply
cost categories in the Live
chain) and induced (wage Music streaming – video
DMA survey. Spending on
consumption) impacts.
accommodation and ‘other’
Data on the economic
items provided the starting
Digital service providers activities of the music video
point for this sector’s
streaming services is very hard
contribution to the indirect
In 2018, there were 108 to obtain. We know that in
impact, but spending on
licensed digital music services 2018, YouTube was the only
direct programme costs was
in the EU27 and the UK (not major supplier of music video
excluded as these suppliers
counting separately the streaming services in the
are themselves part of the
national subsidiaries).29 IFPI EU27 and the UK, estimated
music industry.
provided data on the market to account for almost 100%
• The spending power of share of audio streaming of the legitimate (licensed by
workers in the sector, which subscription services, such as music right holders) music
contributes to the induced Spotify, Apple Music, Deezer, video streaming market.
impact, was calculated Amazon Music Unlimited and YouTube’s ultimate owner
as total personnel costs, YouTube Music. is Alphabet Inc. In 2018, the
net of all social security company published global
contributions and IFPI’s Music Consumer Insight consolidated accounts, which
employees’ income tax. report 201930 provided data covered all their services
on the share of music listening (including Android, Chrome,
Music merchandising time in key EU markets in 2018. Gmail, Google Drive, Google
At the time, 86% of music Maps, Google Play, Search, and
One of the major music-specific online was consumed through YouTube). The company did
merchandising companies on-demand streaming – both not, and still does not, disclose
in Europe was approached audio and AV streaming. information on the income and
confidentially and asked to number of employees involved
complete a bespoke data Music streaming – audio in providing its individual
questionnaire. Their response services, let alone one of its
contained financial information Data for the audio music services by content type. Our
(including export earnings streaming services part of methodology was therefore
from the rest of the world), the digital music distribution based on some data and
employment and procurement sector were based on the assumptions.
information. As elsewhere, bespoke survey return sent
the data supplied was split by to companies in the sector. YouTube claims to have paid
the location of its operations The data request asked for the music business as a whole
into those located in the financial information about US$3 billion in 2019.31 YouTube
EU27 and the UK. The results their operations (including has also stated that its typical
were grossed up to the entire their export earnings from costs of acquiring all types of
segment by the company’s outside of the EU27 and the content, including music, is
market share, calculated from UK), their employment, and 55% of its revenue (YouTube
Licensing International data. procurement from the rest of generates most of its revenue
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
40 31
Available at: https://www.billboard.com/articles/business/8550838/lyor-cohen-youtube-music-billboard-cover-story-interview-2020
by placing advertising monetised music videos are showed that in 2018, 10.7%
alongside video content licensed by music right holders of consumer spending on
and is believed to pay the and, finally, unlike in the case music was at specialist over-
creators of those videos, or of audio streaming music the-counter shops (i.e. record
the rights owners of the music services, YouTube does not stores), supermarkets had
used in those videos, 55% of seek licences to all the rights a 6.7% market share and
the advertising revenue).32 in the music content prior to home delivery a further 11.3%
Dividing US$3 billion by making that content available share. Eurostat publishes
55% suggests YouTube on its platform. data on various aspects
earned around $5.45 billion of retailing (employment,
in revenue on advertising In the absence of any further revenue, procurement,
accompanying music videos data about Alphabet’s employee compensation,
globally. This estimate relates European operations and staff etc) for specialised audio
only to monetised (through working on YouTube in Europe, and video equipment stores,
advertising) videos and does we assumed that Alphabet’s non-specialised stores
not include estimates for various business functions with food, beverages or
the value of other Alphabet were equally efficient, so we tobacco predominating
owned services that might used the ratios from within (i.e. supermarkets), and
have derived revenue from the its 2018 annual accounts non-specialised retailers.
internet traffic generated by to estimate employment We weighted together the
the music videos available on and gross value added. We ratios for the three retailing
YouTube. In the absence of any combined Alphabet’s accounts sectors in proportion to their
disclosures about the location data on type of spending, with share of consumer spending
of YouTube’s advertising input-output data to derive its at 10.7%, 6.7% and 11.3%.
revenue generating viewers, procurement and employee This enabled us to derive
we assumed these revenues compensation associated estimates of the direct impact
reflected the geographical with streaming music videos of selling physical music, the
split of Alphabet’s total to estimate the indirect and retailers’ procurement, and
revenue. Alphabet’s 2018 induced impacts. the employee compensation
annual report stated that the they paid so that we could
company earned 33% of all of Physical music retail calculate the direct, indirect
their revenue from the Europe, and induced impacts for those
the Middle East and Africa Data on the retail value four countries.
(EMEA) region. To estimate of purchases of physical
the scale of their revenues music (CDs, vinyl, etc) in To calculate the retail value of
from the EU27 and the UK, four countries (Austria, physical music in the other 24
we used those markets’ share Germany, Portugal, and UK) countries, we used statistics
of recording industry’s video in 2018 was sourced from on the sales volume of CDs
streaming revenues from the Verband der österreichischen and vinyl in 2018 contained in
EMEA region (at 64% and Musikwirtschaft, IFPI’s “Global Music Report”.
26%, respectively) using IFPI’s Bundesverband The publication contains
“Global Music Report” data for Musikindustrie, Associação volume data for 15 countries
2018. However, we recognise Fonográfica Portuguesa out of the EU27 and UK
that the above methodology and the Entertainment in 2018. We calculated the
is not perfect, given that not Retailers Association average percentage decline
all music videos available (2019), respectively. The in sales volumes across the
on YouTube are monetised Entertainment Retailers 15 countries contained in the
through advertising, not all Association’s data for the UK “Global Music Report”. We
Irene S Berkowitz, Watchtime Canada: How YouTube Connects Creators & Consumers ([n.p]: Ryerson University/Faculty of
32
Communication and Design Audience Lab, 2019) https://sites.google.com/view/watchtime-2019 41

then applied this percentage personnel costs, and purchases represent the entirety of
decline to the 2017 data for of goods and services were musical instrument retailing.
the remaining countries to extracted for the NACE code We conducted an interview
estimate volume figures for 32.2 (Manufacture of musical with the Music Industries
2018. We then multiplied the instruments). Where data were Association (MIA), the trade
volume of CDs and vinyl sold missing for countries, mainly body for the UK musical
by the average price of CDs for confidentiality reasons, instrument industry, which
and vinyl for the two countries these were estimated by using confirmed that the vast
for which we have data that EU totals. majority of musical instrument
are broken down into each sales occurred within
type of physical music (Austria Musical instrument retail specialised stores.
and Germany). To account
for price differences across Input data for musical Radio broadcasting
the EU, this was then scaled instrument retail was sourced
by the difference in the price from the Eurostat SBS Data on the radio broadcasting
of a particular best-selling database. As the SBS database sector (defined as NACE code
global artist’s latest CD album does not provide data at a 60.1 Radio Broadcasting)
on Amazon in each of the six disaggregated enough level was sourced from the
European countries which to allow us to directly extract Eurostat SBS database. We
have bespoke Amazon sites. data for musical instrument downloaded information
For the remaining 22 countries retail, data for the broader on the sector’s gross
we have used the Eurostat industry category were scaled value added, employment,
purchasing power parity down. Data were extracted for employee compensation, and
estimates for recreation and NACE code 47.59 (Retail sale procurement.
culture.33 We then multiplied of furniture, lighting equipment
that by the “Global Music and other household articles in To apportion the share of
Report” statistics on the specialised stores). To remove radio broadcasting that is
quantities of CDs and vinyl the portion of this data that attributable to music (as
sold in the relevant markets was not related to the retail opposed to talk-based or
to get the retail sale value and of musical instruments, we other programming) we used
used the ratios from Eurostat used the GVA ratio of SIC PWC (2017) data on the
for the retail sector in the codes 47.59/1 to 47.59 found percentage of commercial
relevant country. in the UK Annual Business radio airtime accounted for by
survey for 2018.34 This showed playing music.35 The data were
Musical instrument that musical instrument retail available for nine countries
manufacturing represented approximately in the study, namely, Austria
7.3% of the 47.59 category in (78% of airtime), Bulgaria
In estimating the impact terms of GVA. This percentage (74%), Denmark (40%),
of musical instrument was then applied to the Finland (55%), France (68%),
manufacturing, we first Eurostat data to split out Germany (70%), Italy (65%),
spoke to the Music Industries the musical instrument retail Latvia (70%) and Sweden
Association (MIA). Following component. (75%). A similar-countries
this, data for musical method was used to estimate
instrument manufacturing was Whilst the Eurostat data airtime percentages for the
sourced from the Eurostat for musical instrument other nations in this report,
Structural Business Statistics retail represented musical based on geographical
(SBS) database. Data on gross instruments sold in specialised proximity and relative income
value added, employment, total stores, we took this to levels.
33
Available at: https://ec.europa.eu/eurostat/web/purchasing-power-parities/visualisations
34
ONS. 2020. “Annual Business Survey - 2018 Revised Results.”
42 35
PWC. 2017. “A new benchmark for the valuation of sound recordings.”
Television broadcasting We began by extracting data the World Intellectual Property

from Eurostat’s PRODCOM Organization38 which covered
For the activities of database, which provided the Czech Republic, Estonia,
television broadcasters, production values for our Greece, Poland, and Slovakia.39
data on GVA, employment, selection of music-related Using the private copy levy
employee compensation, goods. We then assigned percentage will almost certainly
and procurement spend was percentages of the production lead us to underestimate
sourced from Eurostat’s SBS values of the goods in the the true music-attributable
database, for NACE code 60.2, following manner. For goods share of the value of laptop
television programming and related to the consumption computers, so our estimates
broadcasting activities. This of broadcast music radio, we can be taken as a minimum.
provided the necessary data took an EU average figure Finally, for goods relating to
on GVA, employment, total for the percentage of radio the production of loudspeakers
personnel costs, and spend broadcasting airtime devoted and audio amplifiers, we
by the industry on inputs of to music (68%), calculated assigned an 85% share of the
goods and services (which from data presented in production values of these
includes, amongst others, PWC’s “A new benchmark goods. This is based upon a
procurement of licences for the valuation of sound metric found in National Public
from music right holders) recordings (2017)” report. For Media’s Smart Audio Report
not intended for resale in the products that played physical (Spring 2020),40 stating that
same condition, for television music formats or were for 85% of smart speaker users
broadcasters. From here, 7% of sound recording, such as play music on their devices.
the total GVA and employment microphones, we made the
associated with television assumption that these were After music’s share of
broadcasters was attributed predominantly for music use, production value was isolated,
to the music industry, and therefore took 100% of we applied ratios of production
based on the percentage of their production value. value to GVA, procurement,
television channels which were and employee compensation
dedicated to music, sourced For the manufacturing of taken from the Eurostat
from the European Audiovisual smartphones, we used data Structural Business Statistics
Observatory.36 from a Comscore study on (SBS) database. All of the
mobile app usage in the US products chosen fit into NACE
Music-related goods (2017).37 This suggested that categories 26.2 (Manufacture
manufacturing 18% of time spent on mobile of computers and peripheral
apps was spent on music equipment), 26.3 (Manufacture
For this category we consumption. We therefore of communication equipment),
estimated the impact of the attributed 18% of the value of or 26.3 (Manufacture of
manufacturing of goods smartphone production in the consumer electronics).
which were related to the EU27 and the UK to music. We therefore applied the
production and consumption In the absence of consumer appropriate GVA, employment
of music. The list of products data on music usage time on and procurement ratios based
included sound recording laptop computers, we used on the category into which a
and reproduction apparatus, data on private copy levies specific good fell. Finally, GVA
radios, and devices used to for music-playing devices per worker ratios from the
play music such as laptops, in Europe. We calculated an same Eurostat SBS categories
smartphones, and tablet average percentage rate of were applied to estimate
computers. 2.585% based on data from the employment associated with
Stichting de Thuiskopie and the production of each good.
36
European Audiovisual Observatory, Audiovisual media services in Europe, 2019.
37
Comscore. 2017. “The 2017 U.S. Mobile App Report.”
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/
The calculated values for To estimate GVA and musical instruments to

spending on inputs of employment associated with students. Therefore our
goods and services and the retailing of these products, estimates do not directly
employee compensation were we first applied data on trade include these people. However,
then inserted into Oxford and transport margins for it is noted that many freelance
Economics’ Global Economic the Computer, electronic and music teachers are also
Impact Model to estimate the optical products category employed as music teachers
indirect and induced impacts. (CPA_C26) in Eurostat’s EU27 in educational institutions and
and UK supply table to the elsewhere in the sector, so
Retail of music equipment calculated domestic supply their inclusion could likely lead
(including consumer and figures. Then we used ratios to some double counting.
studio/recording goods) of gross margin on goods for
resale to GVA, procurement We began by estimating the
To estimate the economic (purchases of goods and number of music teachers at
impact of the retailing services excluding those secondary and tertiary level
of manufactured goods meant for resale in the same within the EU27 and the UK,
used in the production or condition), employment, and assuming that the number of
consumption of music, we use employee compensation. dedicated music teachers at
the same categories of goods These ratios were calculated primary level was negligible
and their respective music- using data from the Eurostat due to the more generalist
attributable value shares as SBS database, for the nature of education at that
described in the section on category Other retail sale stage. To estimate this, we used
the manufacturing of music- in non-specialised stores. country-level data on numbers
related goods for consistency. The estimated data for of classroom teachers and
employee compensation academic staff by education
Retailers earn margins on and procurement spending level across the EU27 and the
both the sale of goods were then modelled using UK from Eurostat. We then
manufactured in Europe the Oxford Economics Global estimated the percentage of
and imported from the rest Economic Impact Model to these teachers that taught
of the world. Therefore we estimate the supply chain and music. For music teachers at
began by estimating the total wage consumption impacts lower and upper-secondary
supply of these goods to of the retailing of music level institutions, we first
the EU27 and UK domestic equipment. calculated the percentage of
markets by summing the secondary-level teachers who
value of domestic production Music teachers taught music at secondary
and imports of the included schools in England, using data
goods, and then subtracting The estimates of the GVA and from the UK Department for
their respective export values. people employed as music Education School Workforce
Import and export values for teachers that are presented Census 2018.41 The percentage
the EU27 and the UK were in this report represent those teaching music as a discipline
extracted from the Eurostat music teachers employed was then applied to Eurostat
COMEXT database and the within educational institutions data on the total number of
values of goods produced at lower secondary, upper secondary-level teachers at all
within the studied region were secondary and tertiary levels. institution types in the EU27
sourced from the Eurostat There is a distinct lack of to estimate the total number
PRODCOM database. available data on freelance of music teachers employed
music teachers, those who at lower and upper secondary
privately teach music and level institutions in the EU27.
44 41
Department for Education. 2019. “School Workforce in England: November 2018.”
This same percentage was higher music education institutions, as well as the
applied to Eurostat data on institutions within Europe. The estimate provided by AEC,
secondary schools’ spending estimate was provided on a to calculate the percentage
on employee compensation full-time equivalent basis, so we of tertiary-level teachers who
and the purchases of goods converted it into a headcount taught music. This percentage
and services to isolate the measure using Eurostat data was then applied to Eurostat
component related to music on the percentage of tertiary- data on procurement spending
education. level teachers who were in and employee compensation
part-time employment, with by tertiary-level institutions
An estimate of the number the assumption that anyone to estimate the spending
of music teachers employed working part-time undertook associated with music
at higher education half the hours of their full education. This was then
institutions in the EU27 and time colleagues . For music combined with the secondary-
the UK was provided by the teachers at tertiary level we level data and modelled using
Association Européenne des used Eurostat data on the the Oxford Economics Global
Conservatoires, Académies de number of academic and Economic Impact Model.
Musique et Musikhochschulen teaching staff employed
(AEC), a coalition representing by tertiary-level education
Fig. 10. Product categories for which data was obtained
Product category
Musical instruments; parts and accessories of such articles
Radio broadcast receivers (except for cars)
Radio broadcast receivers for motor vehicles with sound recording or reproducing apparatus
Radio broadcast receivers for motor vehicles, n.e.c.
Parts of radio receivers and transmitters
Telephones for cellular networks or for other wireless networks
Portable automatic data processing machines weighing max. 10 kg, such as laptop and notebook
computers and similar computers
Turntables, record-players, cassette-players and other sound reproducing apparatus
Magnetic tape recorders and other sound recording apparatus
Microphones and their stands (excluding cordless microphones with a transmitter)
Single loudspeakers mounted in their enclosures
Multiple loudspeakers mounted in the same enclosure
Loudspeakers (excluding those mounted in their enclosures)
Headphones and earphones, even with microphone, and sets consisting of microphone and one
or more loudspeakers
Audio-frequency electric amplifiers (including hi-fi amplifiers)
Electric sound amplifier sets (including public address systems with microphone and speaker)
Precious or semi-precious stones for styli (for record players)
Other parts and accessories of apparatus of sound recording or reproducing apparatus
Parts of apparatus of microphones, loud speakers and amplifiers
45
Exports recreational services’ (e.g. in between different industries,

the case of live music concerts households, government, and
In estimating the exports abroad). the external sector. In essence,
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
goods and services, which we data we received directly how activity spreads along
approached in different ways from firms in the music sector. supply chains throughout
based on the data available. This reflected the income an economy, building on the
that these European firms Nobel Prize winning work of
Physical goods exports stated they earned from Wassily Leontief.42
customers located outside
For exports of music-related of the EU27 and the UK. As This study employed the
manufactured goods we were such, exports in this category Oxford Economics Global
able to extract data on export were limited to those of record Economic Impact Model,
values from the Eurostat companies, music publishers, which enables supply chains
COMEXT database (Fig. 10). and providers of audio music to be traced across countries.
Then, to reflect the fact that streaming services. The model used OECD (2018)
many of these goods may data on global economic
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
of the categories used can be record companies and music inside and outside Europe,
found in the table below. publishers methodology stimulating economic activity
section), we estimated their as orders were made and
Digital goods and services respective export values by goods and services produced.
exports using average ratios of exports
to total revenue, calculated from Using a global model is more
When compared to the survey returns we received. accurate than aggregating
exports of physical goods, national ones as it captures
data on digital goods exports the full extent of the supply
and services exports are far METHODOLOGY TO chain. National I-O models
less complete in government ESTIMATE THE INDIRECT for a single country treat
statistics and availability is AND INDUCED IMPACTS imports as a ‘leakage’ and the
inconsistent across countries. expenditure is lost from the
Data from official sources did Estimating the music sector’s model, providing no further
not provide the necessary wider (indirect and induced) economic benefit (Fig. 12).
information to allow us to impact in the EU27 and the This approach can lead to
reliably isolate the exports UK required the use of an understating the economic
of digital music and music- input-output (I-O) model impact of a sector. In contrast,
related services, as the data of the European economy. using a global model allows
were generally included in An I-O model is a detailed expenditure down the music
broader categories such representation of an economy, sector’s supply chains to exit
as ‘Audiovisual services’ showing the major interactions and re-enter the EU27 and the
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.
Fig. 11. Our Global Impact Model captures how the music sector’s contribution spans economies
Standard approach … … plus global linkages
road
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supplier
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upp
sp
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nd
end
ECONOMY pe REST OF
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Using the global I-O model to The method used to collect multipliers). The summation of
calculate indirect and induced data on each segment of the these purchases represented
impacts music sector’s procurement the total production that
by purchase type and location was generated by each
Using the model enables of the suppliers are described segment of the music sector’s
the calculation of the music earlier in this Appendix. procurement. To calculate the
sector’s indirect and induced Using the global I-O model, indirect contribution to GDP,
impacts. This involved this spending was aligned the gross output stimulated in
identifying the expenditure to the industrial sectors in each industry in each country
that each segment of the each country from which was divided by sector-level
music sector made with inputs were sourced. Where gross value added to gross
its suppliers outside of the relatively little industrial detail output ratios, sourced from
sector––both those based in was available from the data, national statistical agencies
the EU27 and UK and those we drew upon patterns of for each country in the EU27
in the rest of the world. We spending observed in similar and UK. The results were
excluded intra-music sector industrial sectors in the input- then aggregated to produce
procurement so as not to output model. the total gross value added
double count music sector stimulated by the music
firms both in the direct The model then calculated sector’s procurement from its
channel and then again in the the subsequent supply chain supply chain located in the
supply chain (indirect channel) purchases that occurred within EU27 and UK.
and through wage spending the global economy (through
(the induced channel). the use of supply linkage
47
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
contribution to GDP was made to take into account produce results for the whole
estimated by dividing the households’ propensity to music sector.
value added stimulated in spend and save in each
each industry in each country country. The estimated To calculate the impact of
by labour productivity data household spending in each the individual segments
for that country and industrial country was combined with we repeated the indirect
sector. These productivity data income multipliers to estimate and induced methodology
were derived from national the gross output it stimulated but this time we included
statistical agencies. These in each industry in the 28 all procurement (including
figures were them summed countries. purchases from other
to get the total employment segments of the music
figure supported by the The second step involved industry). We called these
sector’s procurement along its estimating the induced results the gross estimates.
EU27 and UK supply chain. impact that was generated We presented the results on a
by people employed in each gross (including procurement
The calculation of the induced segment of the music sector’s from other segments in
impact was a two-step supply chain. To generate this the music sector) and net
process. Data on employee result, the modelling used (excluding procurement from
compensation paid to all for calculating the indirect the rest of the music sector)
workers in each segment impact outlined above was for the record companies. This
of the music industry in the extended to incorporate was to demonstrate the scale
EU27 and UK was inserted income multipliers. This gives of their investment in the rest
into the model. Effective tax the induced expenditure of the music sector, and how
rate (including income tax and impact, which was translated it impacted the estimated
social security contributions) into value added, employment multipliers.
data for each country was and tax revenue impacts using
used to derive the disposable the same process used for the
income of the workers in the indirect impact.
48
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The Economic Impact of Music in Europe: November 2020

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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

By quantifying these vital economic contributions, even above

Appendix: Data and methodology36

THE ECONOMIC IMPACT

2.0 million Total jobs supported

€9.7 billion 13% more than

€31.0 billion Total tax contribution €26.2 billion

110 770 120

THE GDP SUPPORTED BY THE MUSIC SECTOR IN EUROPE

Total GVA contribution

We calculate that in 2018 the music sector supported a €81.9

Direct economic impact

Indirect and induced economic impact

THE MUSIC SECTOR’S IMPACT ON EMPLOYMENT IN EUROPE

2.0 million In 2018, the music sector directly or indirectly supported

In 2018, the music sector was conservatively estimated to have

The extra-EU exports estimate is conservative because not all

Fig. 1. Definition of the music sector used in the report

Core Interdependent (and other related services)

Record companies Musical instrument manufacturing

Source: World Intellectual Property Organization

1.3 CHALLENGES IN ESTIMATING THE SIZE OF THE MUSIC SECTOR

As in every economic impact A further challenge relates in another way. In addition,

As part of this study, we

DIRECT The music sector employs people.

It also spends money with

Employees (including of the

Added together, these three

1.4 THE STRUCTURE OF THE REPORT

The report is organised into the following chapters:

2.2 THE MUSIC SECTOR’S DIRECT CONTRIBUTION TO GDP

Analysis of the GVA same year.16 It was estimated

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

5.2 EXPORTS OF DIGITAL GOODS AND SERVICES

In this section we present Due to these limitations in In 2018, record companies,

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

1,000 1,220 1,130

5.3 TOTAL EXPORTS

APPENDIX: DATA AND

Communication Studies at CMOs at the same time) were Authors

Communication and Design Audience Lab, 2019) https://sites.google.com/view/watchtime-2019 41

Television broadcasting We began by extracting data the World Intellectual Property

The calculated values for To estimate GVA and musical instruments to

Fig. 10. Product categories for which data was obtained

Exports recreational services’ (e.g. in between different industries,

Standard approach … … plus global linkages

Singapore Asia Pacific

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Appendix: Data and methodology36