volume 2
july 1999

The economic importance of music in the European Union

7. Subsidy and sponsorship

by Dave Laing

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 seventh chapter of his study, treating the subject of subsidy and sponsorship.

Subsidy and sponsorship. Throughout the European Union, classical music and the other "high arts" such as drama and painting is heavily supported by subsidies from central, regional and local governments and by private sponsorship. In most countries further financial support is provided by music industry organizations such as authors societies and musicians unions. The various forms of popular music receive a much smaller amount of subsidy although there is an increasing amount of sponsorship from private companies for jazz, folk, rock and pop tours and festivals.

Table 7.1:	Public subsidy for music (sources: EMO, Council of Europe, Ministries of Culture, Arts Council of England)
	Year	ECU (millions)
Denmark	1994	20.0	*
Finland	1994	47.0
France	1995	309.0
Germany	1990	499.0
Ireland	1995	4.1
Italy	1990	568.5
Spain	1994	97.0
Sweden	1994	28.5	**
United Kingdom	1994	99.8
() Danish Music Council grants only; (*) state support for Länsmusiken (regional) programmes only.

Government subsidy. The most highly developed systems for public subsidies to music are found in France, Italy and Germany. Public funding for music in Germany in 1992-'93 was 499 million ECU's with 69% of that amount provided by the Gemeinden (local government). The Länder (regional governments) provided 28% and 3% came from central government. [45] This total excludes support for opera which was included in the 1,715 million ECU's of subsidy for theatre of all types. Between 1990 and 1993 the total funding for theatre and music had risen by 27% to reach 2,802 million ECU's and if music's 23% of the total remained constant, the public subsidy for music in Germany had risen to 630 million ECU's.

The state provided half the public funding for music and opera in Italy in 1990 with a further 30% provided by the comuni, the local government organizations. One recent study of the Italian cultural scene suggests that subsidy represents at least 66% of the revenues of many cultural institutions. [46]

In France, the Ministry of Culture gave 309 million ECU's (2% of its total funds) to various music projects in 1995. [47] The largest amounts went to support opera companies, jazz and dance organizations and symphony orchestras. About 16 million ECU's was provided for the development of French popular music although further funding for this came from the proceeds of the levy on blank tapes and the "parafiscal" tax on concert tickets.

The French-speaking region of Belgium also has a programme of public support for popular music. About 1.25 million ECU's are provided for such projects as subsidies for recordings and tours, performances in schools and the foreign promotion of Belgian music. [48]

The Spanish government subsidy for music in 1994 totalled over 97 million ECU's, [49] while In Finland, the Finnish Music Information Centre reported that the government provided 47 million ECU's for music in 1995, not including support for conservatoires. Only about 1% was aid for non-classical music.

Music industry support. Under their rules, authors societies are permitted to spend up to 10% of their revenues for "social and cultural purposes". In addition the regulations for private copying levies in six European Union countries direct industry organizations to spend a proportion of the levies on cultural subsidies (see table 2.2). The amount involved in France in 1994 was 12.8 million ECU's.

In Italy the authors society SIAE spent about 4% of its revenues (13 million ECU's) on support for music in 1995. The figure for STIM in Sweden was just under 2 million ECU's (2% of its revenues). GEMA of Germany spent 13.6 million ECU's on cultural projects. In France, SACEM's support for music projects in 1994 came to 8.4 million ECU's of which the majority came from the authors share of the private copying levy.

In general, the subsidies provided from these sources are a very small proportion of the state subsidy for music. For example, the amount of funding in 1995 for Finnish music from the tape levy was only 0.52 million ECU's. There is, however, a trend for music industry bodies to respond to popular music projects more adequately than state funding organizations. The Council of Europe report on Finland found that rock music "receives more support from bodies funded by copyright and neighbouring rights, and even from the municipalities, which provide premises and studios for rehearsal, than from the state or the Arts Councils." [50]

The Printemps de Bourges rock music festival in France is a rare example of a popular music event that receives support from commercial sponsorship, government subsidy and music industry organizations. Table 7.2 shows that these sources provided about half the funding for the event in 1996. The principal commercial sponsors were the bank Credit Agricole and Coca-Cola while the public subsidies came from every level including the European Union, the French Ministries of Culture and Youth and Sports, the Centre Region, the Cher Department and the city of Bourges. Music industry organizations providing funds included the performers' union ADAMI, SACEM and the Fonds de Soutien which provides support for live music.

Table 7.2:	Funding sources of Printemps de Bourges Festival 1996 (source: Printemps de Bourges)
	ECU (in thousands)	% of total
Ticket sales	1,852	41
Commercial income	210	5
Commercial sponsors	673	15
Public subsidy	1,166	26
Music industry organizations	280	6
Miscellaneous	306	7
Total	4,487	100

Private sponsorship. Statistics for music sponsorship by private companies are not generally available. However, a survey by Andersen Consulting in Spain found that classical music attracted less than 15 million ECU in sponsorship in 1991. This was 20% of all arts sponsorship but much less than the 97 million ECU's provided from government funds for music. [51] Private sponsorship is also more vulnerable to economic pressures. When the Finnish economy went into depression in the early 1990s, private sponsorship of the arts dropped within a year by one quarter. [52]

Large companies in the drinks, cigarettes and clothing sectors have made popular music sponsorship one of their key marketing activities in the past decade. During its 1993-1994 pan-European campaign "Coca Cola Is The Music", the US drinks company sponsored over 100 concerts and special CD's.

The German automobile manufacturer Volkswagen sponsored the European leg of the Rolling Stones tour in June-August 1995. Almost all large jazz and rock festivals now have commercial sponsors. The 1994 Knebworth rock festival in the UK attracted sponsorship of 820,000 ECU's from a major bank. [53]

Subsidy and classical music. The proportion of the costs of orchestras and other music organizations on subsidy varies between countries. In the UK in 1994-'95, the percentage of revenues for classical music organizations provided by sponsorship was less than 6% (5 million ECU's) while subsidy provided 47% (42.4 million ECU's) and revenues from ticket sales and recording sessions provided almost 48% (42.6 million ECU's). [54] In the Netherlands orchestras relied on subsidy for 80% of their costs in 1990 while the figure was as high as 87% in Sweden. [55]

Notes

45. Kulturfinanzierung im Federalismus. Kultur & Wissenschaft, no. 7, ARCult, 1994.

46. Gordon, C. (1995), Cultural Policy in Italy. Strassbourg: Council of Europe, 1995.

47. Financial Times Music & Copyright, no 75, London, 1995.

48. Striking The Right Note. op.cit.

49. Cultura en cifras. op.cit.

50. Renard, Jacques. op. cit.

51. Cultura en cifras. op.cit.

52. Survey on the Economic Situation and Social Status of the Artist in Finland. op.cit.

53. Hollis Sponsorship Yearbook. London, 1996.

54. BBC / Arts Council Review of National Orchestral Provision. London, 1994.

55. Myerscough, Cultural Policy in the Netherlands. op.cit.