UK Music has launched the first research to accurately measure the size of the music industry and its contribution to the British economy.
The massive project will be the first to use a definition of the music business drawn up by the industry itself and will draw on invaluable and previously unavailable data from UK Music's member organisations. It will also work in partnership with the Department of Culture, Media and Sport and the Office of National Statistics.
The complex economic analysis is expected to report in the autumn and will be repeated annually to provide unique comparative market information.
The value of producing a regular and accurate economic measure of the music industry’s contribution to the national economy in terms of GVA, employment and exports is critical because there is currently no consensus on the size and shape of the British music industry.
The DCMS estimated the music sector’s Gross Value Added (GVA) was £4.1bn in 2009, but this figure is believed to be an underestimate and based on a flawed methodology.
As recently as December the influential innovation foundation Nesta concluded the DCMS classification of the creative industries (set out in 2001) “contains inconsistencies which need to be addressed to make it fully fit for purpose.”
Others argue previous attempts to measure the sector have been compromised because they were reliant on the maligned Standard Industrial Classification (SIC) codes, which do not accurately represent every part of the hugely diverse music sector, or they did not have access to complete data on revenues.
Precise measurement and statistics, which remove any confusion and ambiguity, and whose methodology has been agreed, is critical to the music industry because the information can be used to help map trends and also inform investment decisions. The results will also aid UK Music and its constituents when they discuss Government policy and spending decisions with various Secretaries of State and ministers.
UK Music CEO Jo Dipple said, “Music is a huge asset to this country, its culture and the economy. But we are in the strange position of not knowing exactly how big an asset it is. What the industry needs is robust, independent economic data that we can use to identify current market trends and forecast future and new growth opportunities.”
Already all strands of the industry, including record labels, managers, collecting societies and publishers, have come together to provide a formal definition of exactly what constitutes the core and wider music business.
Economist Jonathan Todd, a former ministerial advisor and senior consultant at Europe Economics, is leading the project. Todd said the report - working title, How Important Is The Music Industry To The National Economy - will overcome the deficiencies inherent in previous economic assessments by drawing on the industry’s own figures reported in 2012 in addition to public data.
“We are taking a more consensual approach with peer-approved processes and with a lot of input and co-operation from UK Music’s members and their businesses,” Todd said. “That means we will produce the most accurate and comprehensive assessment of the music industry’s contribution to the British economy.”
It is hoped the findings from the report can be fed into a proposed DCMS consultation, which will seek to update the Government’s own definition of the music and creative industries and how the industry is represented in national statistics.