volume 2
july 1999

The economic importance of music in the European Union

Executive summary

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. Here the author provides a short executive summary.

In addition to its cultural value, music plays an important economic role within the European Union and in particular within the cultural industries sector and amongst the copyright industries.

The music industry has a greater turnover than both the cinema and video industries. In 1995 the music industry had an estimated turnover of 18.8 billion ECU's and provided employment for over 600,000 people. About half of these jobs were part-time and young people accounted for a high proportion of those working in the industry.

The primary sectors of the music industry include:

the production and sale of sound recordings
the administration of authors rights and neighbouring rights
concerts and other performances
the manufacture and sale of musical instruments

Additionally, a considerable amount of public subsidy and a smaller amount of private sponsorship money is given to support musical activity. Almost all of this is provided for classical music.

The sound recording sector includes over 3,000 recording companies, 85 Compact Disc (CD) factories and several thousand recording studios. It employs 45,000 people and had revenues of 9.5 billion ECU's in 1995. About 60% of the music sold on CD's and music cassettes (MC's ) in the EU was of European origin. About 80,000 people are employed in the retailing of recorded music.

The administration of performing rights and other revenues from music publishing involved the collection of over 1 billion ECU's in 1995. Composers and publishers also earned about 750 million ECU's from the mechanical rights of their compositions. The number of composers active in the EU is about 100,000, although only a small proportion of these are able to earn a full salary from their work as composers.

Sales of concert tickets and related merchandise were valued at 2.3 billion ECU's in 1995. A large proportion of the 2.2 billion ECU's received in subsidy and sponsorship was also given to assist in the staging of classical music concerts and operas. The music performance sector supports 100,000 European musicians most of whom earn only only part of their living from performances. It also employs an estimated 25,000 in ancillary occupations.

Sales of musical instruments in the EU in 1995 were about 2 billion ECU's. The EU has a trade deficit in instruments with sizeable imports coming from Japan.

A large number of European musicians receive part or all of their earnings from teaching. Millions of Europeans are involved in music education, learning to play an instrument or training to become a professional performer, technician or music business professional.

For the purposes of this study education, broadcasting and the audio equipment (CD hardware, cassette players etc.) manufacturing and retailing industry have not been defined as primary sectors of the music industry. However, the creation and distribution of music adds value to these industries as well as to others, notably tourism.

This study is the first attempt to survey the whole of the economic dimension of music in the European Union. In some sectors, statistics gathered by industry organizations or government agencies are easily available. In other important sectors, notably those of performance and employment, there is a need to follow up the work of this study through more detailed research.