Music’s Power Can Help Lift Economy During Post-COVID Recovery (Guest Column)
The authors of a new RIAA report on music's contribution to the U.S. economy discuss music's role in America's recovery.
The COVID-19 pandemic has left millions of lost jobs, shuttered businesses, and struggling families in its wake. Even with vaccines just beginning to roll out, the work of rebuilding and recovery is urgent and immense. A new report we have published makes clear the music business can play an important role in this effort.
Our report documents music’s growth into one of the pillars of the American economy, adding $170 billion to our nation’s economic growth and supporting nearly 2.5 million jobs in everything from core operations like recording, streaming and performances and many adjacent businesses that rely on music’s power. From video crews and venue staff to streaming platforms and social media, music is a powerful engine creating opportunities in virtually every corner of the national economy.
Overall, we found that jobs supported by music activities jumped over 18% between 2015 and 2018, with an average annual growth of over 5%. With more than 230,000 establishments operating nationwide during this period, the music community and everyone who works in it can take great pride in helping millions of people find sustainable, high-wage careers.
Trending on Billboard
While pandemic-related closures have temporarily – but profoundly, we expect – taken their toll on the music sector, this pre-COVID data provides a vital pre-shutdown benchmark of where things stood when the crisis hit – and where they were headed – a narrative that centers music as a powerful engine for recovery.
It’s too early to tell exactly how much damage the pandemic has done to the economic activity music otherwise would have generated. Artists and record companies have worked throughout the shutdown to find safe ways to continue the recording process and stay connected with fans. And the industry’s early adoption of streaming distribution kept the music – and royalties – flowing for performers and songwriters far more than would have been possible just a decade ago.
From living room livestreams to major investments in artist technology and socially distant recording and promotion, labels and their creative and commercial partners have clearly innovated to keep the industry’s foundational lights on, hopefully softening the immediate economic blow at least somewhat while ensuring music’s core infrastructure will be ready to go when reopening begins.
Related
But even with those efforts, the near complete shutdown of live performances and the broader limits on recording, promotional activities, advertising spends, and even routine office work has exacted a terrible toll. Just as our research shows music’s power to generate follow-on activity – finding that every dollar spent directly in the music business produced an additional fifty cents of activity in adjacent businesses from craft services on a video shoot to airplane tickets on the festival circuit – it also makes clear that when that engine slows, the costs ripple far and deeply.
That’s why recovery efforts should include a major push to get generative, additive industries like music fully back on their feet.
The biggest part of this, of course, is re-opening live performance and touring. Policymakers have been wisely focused on that need, thanks largely to the active and effective cross-industry “Save Our Stages” collaboration among venues, record companies, performing rights organizations, publishers, artists, songwriters, and more. The next COVID package being considered by Congress would be wise to include more recovery funds for these community cornerstones.
But music’s power to lift the broader economy doesn’t stop there.
Alongside traditional streaming, for example, recent years have seen the rise of innovative new music-powered platforms from TikTok to Peloton. While it took some time to establish the economic ground rules for these new uses of music, record companies have forged new business and licensing models across these platforms to make sure artists, musicians, and songwriters are fairly paid for these fast growing uses of their work. Policymakers can support those efforts by continuing their careful oversight of tech platforms and the digital economy and standing up for core principles – like strong copyright and the bedrock requirement that all uses of music be properly licensed and fairly paid.
Finally, our research identified a number of states where music has historically “overperformed” — and where getting music fully back into the game will pay added dividends.
In Tennessee, for example, music contributes twice the national average to local GDP. California, New York, Pennsylvania, Florida, and Texas each went into the pandemic with multi-billion-dollar music establishments, each supporting tens of thousands of local jobs. In these communities, work to re-start music will go especially far in boosting local economies.
We know music’s power to inspire, uplift, and connect. But this new data shows it can create the jobs we need to help communities around the country get back up on their economic feet.
Robert Stoner is a principal at Economists Incorporated, San Francisco. Jéssica Dutra is senior economist at Economists Incorporated, Washington DC. Read their full report (“The U.S. Music Industries: Jobs & Benefits”) here.
