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24.01.14 MusicWeek 17


UK MUSIC: ARTISTS AND SONGWRITERS KEY TO GDP


Musicians, singers and songwriters made the industry’s biggest contribution to the UK economy in 2012, according to UK Music. The trade body’s report The Economic Contribution of the


Core UK Music Industry suggests they generated £1.547bn last year to GVA (gross value added), the contribution the music industry makes to UK GDP (gross domestic product). Musicians, singers, composers, songwriters and lyricists also delivered £180m worth of exports and made up 68,000 of the 101,680 people employed within the music industry. However, the report notes the figure understates the many part-time and amateur musicians in the UK. UK Music chief executive Jo Dipple says: “It’s quite nice to


find they are the generators of the biggest value because it is the creators who make up the industry.”


The next largest component part of GVA is recorded music


with a £714m contribution last year, just ahead of live music with £662m – including £189m coming from festivals – and the story is completed by music publishing (£402m), music representatives (£151m), which are made up of collecting societies, managers and trade bodies, and music producers, recording studios and staff (£80m). Music publishing led the way for exports with £509m in


2012, 58.6% higher than what recorded music managed (£321m). However, publishing had far fewer employees than recorded music with its staff of 1,000 compared to 16,850 at labels and elsewhere. Live is also a significant music industry employer with its numbers last year put at 13,490 people, 3,800 of which were full-time festival jobs.


THE ECONOMIC CONTRIBUTION OF THE CORE INDUSTRY GVA(£M)


investigations into how much the industry contributes to the economy. The result was the publication just before Christmas of its own report The Economic Contribution of the Core UK Music Industry. DCMS in its study recognises this research and says it is currently working with UK Music and the Office of National Statistics (ONS) to improve the way the music industry is classified going forward. UK Music chief executive Jo Dipple welcomes


the acknowledgment, while noting: “DCMS and the Government accept that they can’t measure creative sectors like music under the current international system so we with government are now going to have to put the pressure on for changes to be made [at international level] to reflect us better. It is good they admit our own work is a better reflection of the sector than government figures.” When put alongside UK Music’s own report, the


DCMS numbers reveal huge underestimations in terms of what official Government figures say the music business is really worth to the economy. According to the UK Music study, the core UK


music industry contributed £3.477bn to the UK’s GDP (gross domestic product) in 2012, while exports were worth £1.398bn and it employed 101,680 people. By contrast the DCMS’s newly-published study


said the sector it called “music, performing and visual arts” contributed £4.574bn to the economy, a higher figure than UK Music produced, but this takes in not just music but other performing and visual arts, too, covering areas as diverse as dance, theatre, opera, comedy and galleries. While the data available makes it impossible to break out how much of this number was down to music, it seems reasonable to suggest it would be a far lower figure than the £3.577bn total UK Music came up with in valuing the industry. Similarly, the DCMS calculations for music


industry exports are far inferior to what UK Music came up with. According to the most recent figures available to the Government department, music, performing and visual arts exports were valued at £275m in 2011, less than one-fifth of what UK Music came up with just for the music industry. A comparison of the employment numbers in


Musicians, singers, composers, songwriters, lyricists Recorded music Live music


Music publishing Music representatives


Music producers, recording studios and staff Total


source: The Economic Contribution Of The Core UK Music Industry (UK Music)


1,547 714 662 402 151 80


3,477 EXPORTS(£M)


180 321 152 509 235 16


1,398 EMPLOYMENT


68,000 16,850 13,490 1,000 2,340 7,500


101,680


the music industry between the two reports is difficult given the DCMS study adds in music people with others from so many other unrelated industries, but for the record it reckoned there were a total of 277,000 individuals working in music, performing and visual arts. This compares to just above 100,000 for the music industry specifically, according to UK Music. Dipple acknowledges the difficulties of


measuring something like the music industry, given there are so many money-making facets to it. “With car manufacturing it’s very easy to


measure the output of a car from the production line and how much money you make,” she says. “With music you’ve got music producers, the artist, the songwriters, the record label, the distribution partner and you may have a third party in another country. Then you’ve got the live activity.” So flawed is the DCMS methodology, according


to UK Music, that the vast majority of businesses making up the industry were incorrectly labelled under what are called SIC codes. These are Standard Industrial Classifications with each one representing a different activity in the economy and are used by the ONS and Government departments to calculate the value of different industry sectors and then ultimately the whole economy. One-time Government economic adviser


Jonathan Todd, who worked on the UK Music report, notes there is only one classification code specific to music – one covering what are described as “sound recording and music publishing activities”. Even here of the 9,435 record labels the industry trade body had in its own database only 1,267 of them were registered to this code so the rest would have not been counted as music companies in the DCMS’s own creative industries report. “We don’t have an industry classification that maps on to music and even within the


classifications that exist the one that is best tailored to music is only getting 15% of those companies that really should be going there,” says Todd. Also missing from the DCMS figures for the


music industry are certain job roles as under the present classification system they are not recognised as music activities. For example, organisers of festivals such as Glastonbury and T In The Park are billed as “conference and exhibition organisers” so do not figure in the DCMS’s music industry numbers, nor are artist managers or a number of people who work for music publishers and music promoters like Live Nation and AEG Live. Dipple says: “A lot of companies that register


their businesses don’t know what code to register under because the coding system doesn’t represent the businesses, even though they are music industry businesses.” However, given even these flaws in the data


specifically for the music industry, Dipple still believes the DCMS report sends out a very positive message about the Government’s improving attitude to the creative economy. “They are waking up to the fact the creative


sector is a target growth sector and they’ve said it over and over again,” she says. “They say it in terms of exports. They say it in terms of general economic recovery.” UK Music’s own figures came from the widest


economic trawling yet of the industry with contributors including trade organisations such as the BPI, AIM, BASCA, the MPA, MMF and MU, societies PPL and PRS for Music and the live music sector. The numbers were ultimately peer-reviewed by Oxford Economics, the global leader in forecasting and quantitative analysis for both Government and business. That makes them in Government circles as about as robust as you can get.


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