Music contributes $21 billion to New York economy

Music contributes $21 billion to New York economy

New York Mayor Bill de Blasio has outlined his commitment to strengthening the status of the city as the music capital of the world, following the publication of the first-ever economic impact study of the city’s music industry, which found that the music sector contributes $21 billion to the city's economy, supports nearly 60,000 jobs, and accounts for $5 billion in wages.

The study, conducted by Boston Consulting Group, found that New York City is one of the largest music ecosystems in the world and a centre for of digital music innovation. With over 70 digital music start-ups, including Spotify, New York City has twice as many digital music companies as San Francisco and Los Angeles. The study also found that more tickets are sold to live music performances in New York City – 5.4 million in 2015 – than any other city in the world. London is second with 4.2 million concertgoers, followed by Los Angeles with 1.7 million.

The study concluded that New York City’s music ecosystem was "healthy and thriving." It also identified "clear opportunities for local government to make it even stronger," most notably in four areas: Supporting and helping to building thriving local artist communities; creating more performance opportunities for local artists; increasing the economic impact of mass music consumption; and harnessing and expanding the presence of digital music services.

De Blasio said he was keen to build on this foundation to expand the contributions of music to the overall economy of the city. "Music is an inclusive force and economic driver in this City,” said de Blasio. “As we continue to build good jobs for New Yorkers, we see that raw talent and homegrown energy has built a powerful local industry. Together, we will continue to grow that success.”

One of the key signs that de Blasio was taking music seriously was when he appointed Julie Menin as commissioner of the Mayor’s Office of Media and Entertainment (MOME) in February 2016. He also expanded the agency’s portfolio to include music, marking the first time a City agency has been given a mandate to support and promote the music industry in New York.

“This first-of-its kind study details the substantial amount of economic activity that all aspects of this rapidly changing sector of the entertainment industry generate in the City," Menin said. "The study also squarely reaffirms New York City’s status as the music capital of the world. Because of the City’s resilience and resourcefulness, New York has weathered changes in the music industry better than other cities and has come out on top. We look forward to building on that momentum and working with the industry to help it continue to grow and thrive.”

A number of leading executives spoke to Music Week about the report, responding positively to the study and its findings, viewing it as the start of a process, especially in addressing the issue of the cost of living for artists in New York.

"As a New Yorker, I am particularly proud and excited of the Music Industry study," said Daniel Glass, founder and CEO of New York-based label Glassnotes. "Personally, I have great concerns in two areas. One is affordability… Retaining and attracting creative music people, whether they be artists, writers, arrangers, engineers, producers, executives, etc. Number two is early childhood music education, which will instil and inspire that New York City is a place to nourish your musical abilities and grow and breed talent here. This study, as well as the Grammys returning to NYC, will illuminate that we are vital and vibrant."

Justin Kalifowitz, CEO of Downtown Music Publishing, is part of an organisation named NY Is Music, which works with the city and the state of New York to make the region more attractive to music creatives, in particular through tax credit schemes. He views the report as a sign that the narrative is changing after years of lamenting the decline -- or the perceived decline -- of New York compared to other cities such as Los Angeles or London.

"Since music was formally added to her portfolio last year, Commissioner Menin and her team have become quick allies to NYC's music community," he said. "The results of the study they initiated quantify the incredible economic contribution of the broader industry while also providing key data points that both the City and music industry can collectively use in responding to the challenges and opportunities ahead."

The report measured contributions to the local economy in four ways: direct, indirect, induced, and ancillary (also known as tourism). Key findings of the study include:

- Direct impact: The core sectors of the music industry contribute 31,400 jobs, $2.8 billion in wages, and $13.7 billion in economic output. The average annual wage for the direct music industry was $90,000 in 2015, up from $85,000 in 2014.

- Indirect impact: Through transactions with suppliers and vendors to the music business (such as professional services, IT, and telecom), New York City’s music industry has an indirect economic impact amounting to approximately 10,100 jobs, $900 million in wages, and $3.4 billion in economic output.

- Induced impact: When those employed directly or indirectly by the industry spend their wages in New York City, they support approximately 16,100 jobs, $1.0 billion in wages, and $3.9 billion in economic output.

- Tourism spending that can be attributed solely to attending music-related events amounts to $400 to $500 million.

The full report can be found here

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