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volume 2
july 1999

The economic importance of music in the European Union

 





  8. Conclusions
  by Dave Laing
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  In September 1996 the European Music Office published its report on "Music in Europe". The first part of this study, written by Dave Laing, describes the economic importance of music in the European Union. This is the last chapter of his study, summarizing the conclusions.

1 The value of the European music industry. Based on the information contained in this study, table 8.1 presents an estimate of the value of the primary sectors of the European music industry. These sectors are those which are directly concerned with the production and distribution of recordings and instruments, with concerts and other live performances and with the administration of authors and neighbouring rights. Excluded from this table are such activities as music education and the manufacture and sale of audio equipment.
 
Table 8.1: Turnover of primary sectors of the European Union music industry in 1995 (in millions of ECU) (sources: IFPI, authors societies, estimates)
Recorded music 9,500  
Performing rights and publishing 2,300  
Concerts and performances 2,200  
Subsidies and sponsorship 2,300  
Musical instruments 2,500  
Total 18,800  
  The total of 18.8 billion ECU is equivalent to 0.34% of the Gross Domestic Product of all European Countries in 1994-'95.
  Recorded music. The table shows that recorded music represents just over half of the revenues of the industry. Under this heading is included the retail sales value of audio product as reported by IFPI (table 1.1) plus an estimated figure for music video sales. Not included are pirate sales values (table 1.10), the trade in used soundcarriers and some sales by small companies in certain countries. In addition there are increasing numbers of CD's offered free of charge to consumers in magazines or through special promotional offers. In some countries these form a relatively large amount of the classical music CD market.
A more significant figure may be the sales of "parallel imports" from countries outside the European Union. These are imports made by wholesalers or retailers of copies of newly released popular CD's from countries where the wholesale price is lower than in a particular EU country. It is probable that these sales are not included in the IFPI statistics which are based on reported deliveries by record companies to retailers or wholesalers. For example, the value of these parallel imports in Germany in 1995 was reported to be as much as 2.46 million ECU's. [56] However, some of these unreported sales will have been imported by German retailers from other EU countries.
2 Categories
  Performing rights and publishing. The total estimate for revenues from rights administration excludes the mechanical royalties from soundcarrier and music video sales. These are included in the Recorded Music total. Also excluded are revenues of authors societies from the foreign uses of the compositions which they control.
  This category includes the revenues of neighbouring rights societies (table 2.3), the retail value of sheet music sales (table 2.4) and an estimate for other publishing industry revenues such as payments for works commissioned for use in films, television and advertising.
  Concerts and performances. This includes estimates of the value of ticket sales for all forms of popular and classical music. This is almost certainly the first occasion that an attempt has been made to discover the size of this important sector of the European music industry. The turnover figure of 2.2 billion ECU's is probably an underestimate of the amount of activity in musical performances in Europe.
  As the discussion of the available statistics in chapter 5 stated, this is a difficult area to research because there is no single industry standard or industry body involved in collecting information. However, its importance, not least as a provider of employment for performers and other ancillary workers, is such that it deserves to be investigated in greater detail than has been possible in this study.
  Subsidy and sponsorship. This includes estimates of public support for music by national and local governments and a low estimate for private sponsorship. Also included are the subsidies from tape levies and from the general revenues of authors societies.
  Musical instruments. This figure is based on the retail value of certain national markets given in table 4.1.
 
Table 8.2: Employment in the European Union music industry in 1995 (sources: EMO, authors societies, IFPI, estimates)
  Total Full Time Equivalents  
Musicians 250,000 80,000  
Composers 100,000 23,600  
Recording industry 45,000 45,000  
Music publishing 13,500 13,500  
Live music industry 40,000 23,500  
Retailing 100,000 100,000  
Others 60,000 40,000  
Totals 608,500 325,600  
  Musicians. These figures include both the total of musicians recognized as economically active by union membership figures or census returns and an estimate of how many full time jobs their activity is equivalent to (FTE). Many of those active as part-time musicians also work permanently at other occupations. It should also be noted that the number of young musicians involved in performing for an audience is likely to be very much higher as these will include many who are officially registered as students or unemployed, or who are employed in another industry until they can earn a living from music.
  The problems of researching this area are similar to those connected with the Music Performance sector mentioned above. One of the difficulties is that EU governments use different classifications of occupations in their official statistics. Nevertheless, an in-depth study of available information at national level would provide more precise statistics than has been possible here.
  Composers. This figure is based on the total numbers of authors society members, the smaller numbers of membership of national composers' organizations and the estimate of FTE made on page 27. The situation is made more complex because of the fact that most active pop, rock and jazz performers are also composers.
  Recording industry. These figures cover record company administrative staff, manufacturing workers, distribution workers and recording studio employees (see table 1.3).
  Music publishing. These figures include employees of authors societies and employees of music publishing companies (table 2.4)
  Live music industry. This includes all the ancillary staff discussed on pages 39-40. In addition, a small estimate has been made of employees of music venues whose work could be attributed solely or primarily to music.
  Retailing. This includes both employees of stores selling recorded music and those which sell instruments and sheet music.
  Other. This includes a figure for full-time equivalent music teachers and a small estimate of the number of jobs in broadcasting and journalism which could be directly attributable to music.
   
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  Notes
56. Phonographische Wirtschaft Jahrbuch '96. op.cit. Return to text
   
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