Sound Diplomacy, whose other clients consist primarily of city governments across Europe and Latin America, is also running similar music impact audits across the Midwestern and Southern U.S. -- including for Indianapolis’ Indy Music Strategy and for the Shoals and the city of Huntsville in northern Alabama.
None of these regions likely come to mind when one thinks of the phrase “music city” -- a coveted title historically reserved for metro areas like New York, Los Angeles and Nashville that house the modern-day headquarters of major labels, publishers, artist-management firms and booking agencies.
From Sound Diplomacy's perspective, that is precisely the point. The consultancy's unconventional first clients highlight the challenges and opportunities facing cities that are not traditional industry hubs, but are nonetheless culturally significant, in supporting and protecting local creative economies for future generations.
At the national level, there is ample evidence that music and other forms of intellectual property serve as vital drivers of commerce and tourism. According to a report from the U.S. Patent and Trademark office, over 38 percent of the country’s GDP in 2014 came from “IP-intensive” industries, equivalent to $6.6 trillion in value. In April 2018, the nation's leading destination-marketing company Brand USA launched its long-term “Hear the Music” campaign to market key American "music cities" to international travelers, highlighting the likes of Aloe Blacc and The Wooks as featured artists.
Yet governmental arts funding in the U.S. seems to be perpetually precarious. In Jun. 2017, the Trump Administration proposed killing all sources of federal funds for culture, including but not limited to the National Endowment for the Arts and the National Endowment for the Humanities; shortly thereafter, Rep. Glenn Grothman (R-WI) proposed an amendment to a federal spending bill that would have reduced funding for the National Endowments for the Arts and Humanities by 15 percent, although the House of Representatives quickly rejected the proposal.
Despite evidence of growing creative entrepreneurship at the city level, many local music and arts budgets have also faced steep cuts over the last several years.
Yet select city governments are starting to build structures that give artists and music-industry stakeholders a seat at the table in drafting local legislation -- e.g. the Georgia Entertainment Caucus, founded in late January and co-chaired by BMI vp creative Catherine Brewton -- and Sound Diplomacy has ambitions to scale this commitment to local music communities across the U.S.
“I believe Trump’s election has made people think more about how they want to express themselves separately from the federal government,” Shain Shapiro, founder and president of Sound Diplomacy, tells Billboard. “More cities are taking ownership of their brand, and we’re seeing a lot of state and regional governments thinking more deeply about what culture means to them, and how they want to express that. I do believe the future of governance is in cities, and that cities are where the solutions are.”
Across the board, the lack of music-friendly legislation often boils down to a baked-in perception that music is merely a cultural asset, and not a commercial one.
In interviews with Billboard, multiple local government officials working with Sound Diplomacy repeated the phrase “punching above our weight,” to describe the historical disconnect between their cities' deep-rooted musical legacies -- e.g. Wes Montgomery in Indianapolis, Louis Armstrong in New Orleans, Rick Hall in Muscle Shoals -- and the extent of actual investment in policies and infrastructure for homegrown music entrepreneurs and businesses.
Sound Diplomacy argues that closing this gap between national reputation and local infrastructure requires mediators who can translate effectively between the priorities of the music industry and those of politicians -- and who can set benchmarks for measuring not just the music industry's own revenue, but also the art form's wider impact on health, real estate, quality of life and other factors.
“The whole point of Sound Diplomacy is to be the music people for non-music people,” says Shapiro. “I don’t need to convince people in the music industry of music’s value. Our industry tends to live in a bit of an echo chamber. If we spend more energy on communicating the external value of music to everyone else, and building benchmarks around that, rather than just focusing on the internal value of music to ourselves, we’ll see better regulation and more music offices that are funded.”
Shapiro tells Billboard that compared to Sound Diplomacy's other clients abroad, the consultancy's U.S. projects are disproportionately focused on music as a driver of economic development.
For instance, northern Alabama has already committed over $4.1 billion to more than a dozen new economic-development projects, and is treating its evaluation of music with the same level of rigor. “The city [of Huntsville] is responsible for bringing in a $1.6 billion Mazda manufacturing plant,” says Shapiro. “That’s our competition.”
Part of Sound Diplomacy's approach to studying local music scenes involves treating music as an "economic cluster" and mapping its activity accordingly, similar to what federal and state governments build for visualizing household income, real estate permits, life expectancy and health insurance rates. “We can map anonymous, aggregate data on activity like how much music is being consumed in what postcode over a certain period of time, against other datasets like land use, and then identify what we call ‘music deserts’ -- areas where music is being consumed but where there’s no infrastructure to support it,” says Shapiro.
In this vein, as a driver of economic development, a city-level music strategy also arguably needs to legitimize local music companies as peers to, and collaborators with, businesses in other industries.
“If you build a music strategy in a vacuum, you might have all the arts institutions on board, but you might not be able to rally the local entrepreneurs and small businesses that have such a significant impact on our local music community as well," Michael Huber, president and CEO of the Indianapolis Chamber of Commerce, tells Billboard. "We really want to expand the model and conversation by connecting small businesses with our musical assets, which is why we as a chamber of commerce and economic development are getting involved.”
New Orleans in particular is following in the footsteps of cities like Austin and Memphis by taking deliberate steps to connect its local music and tech ecosystems, particularly for applications in music licensing and rights tracking.
“With the rise of technologies like blockchain, we're at the precipice of a major disruption around how we keep track of IP ownership in music,” Michael Hecht, president & CEO of GNO, Inc. tells Billboard. “One of the challenges with the rise of streaming is that many artists still have trouble monetizing and getting paid properly for their mechanical rights. As one of the fastest-growing tech markets in the country in terms of job growth, we in New Orleans think we have an opportunity to be at the forefront of this next wave.”
Hecht points to local companies like licensing startup AudioSocket and IT services firm DXC Technology -- which chose to open a new office in New Orleans in May 2018, out of a total of 30 city applicants -- as potentially valuable partners to homegrown music businesses.
New Orleans’ music strategy is also homing in on increasing job creation and value capture within local borders, instead of outsourcing key business functions to stereotypical "music cities." For instance, New Orleans-based rock band The Revivalists are currently signed to an out-of-state record label (Loma Vista Recordings) and booking agency (Paradigm); reading between contractual lines, this implies that 85 percent of the band’s record sales and 10 percent of the band’s booking fees aren’t being captured in their home city.
“We realized we’ve effectively allowed ourselves to be culturally colonized, in that we produce the raw material but other cities have done a much better job of capturing the value from that material," says Hecht.
Solving this problem requires not just encouraging artists to sign with more local labels, publishers and agencies, but also giving said artists and companies the affordable infrastructure and incentives to develop themselves locally in the first place.
There already exist some tax-based incentives such as Louisiana's Sound Recording Program, which provides an 18 percent tax credit for sound recording projects made in the state. Many potential policy-based solutions aimed at improving the sustainability of artists and their teams also center around real estate -- e.g. the establishment of cultural and musical land trusts to ensure more affordable housing and creative space, or improved zoning and permitting regulations that encourage creation of both all-ages and 21+ concert venues.
Another priority in select markets is bridging the gap between older and younger generations of artists, which face different pain points and demands from having grown up in vastly different industry climates.
“One aha moment from our work with Sound Diplomacy so far is that there seem to be two camps in [our region]: a younger camp of up-and-coming musicians who are looking to develop themselves, and an older camp of music legends who have been here for decades,” Rob Carnegie, president & CEO of the Florence/Lauderdale Convention & Visitors Bureau, tells Billboard. “The two camps very much respect each other and are friendly, but from a working and collaboration standpoint there’s a bit of a disconnect, and also a mentoring opportunity. In terms of policy, I think the gelling of these two demographics is something that really has to grow and develop, because there’s very little of that happening right now.”
As for the value that big-name labels, publishers and agencies from outside can add to a burgeoning local music economy, the jury is still out. While Hecht is set on persuading major music companies to open new offices in New Orleans, such an approach has not boded so well elsewhere.
For instance, at the heart of the conflict currently underway between the Chicago Independent Venue League and the Office of the Mayor -- in response to Lincoln Yards, a proposed $6 billion mixed-used development to be built in partnership with Live Nation -- is the argument that city governments will jump to give outsized incentives to larger, consolidated corporations before supporting independent and DIY communities that are already active on the ground.
In any attempt to balance local needs with outside corporate interests, one crucial lesson is that there's no one-size-fits-all model for economic development, particularly for such a subjective, sensitive and malleable sector as music and culture.
“You can’t just copy and paste the story of Memphis, Nashville or New Orleans and make it into Indy’s story,” says Huber. “Each of those places has a character that’s very singular to their city. What we need to do is do a thorough digging in the dirt and unearth all the unique pieces that make us who we are, and how those pieces could be better connected. Hopefully from that comes greater clarity of the story we should tell.”
That said, local music strategies still need some level of cooperation from music-industry incumbents when it comes to effective measurement of audiences and consumption -- one area where Sound Diplomacy is still struggling.
“One of our biggest challenges is getting data from the music industry,” says Shapiro. “Music gets its power in part from its role in civics -- from showing how we as an industry can help solve other people’s problems in real estate and quality of life. But we’ve had nothing but problems in getting the information we need, especially from music streaming providers and ticketing companies.”
Sound Diplomacy does receive some postcode-specific, anonymized data from PROs, as well as ticket sales data from select local venues, but is continually fighting to get larger record labels and streaming services on board as well.
“If the industry actually cares about its talent development pipeline, it should be engaged more seriously in local and urban issues," says Shapiro. "My dream would be for the music industry to see the long-term benefit in becoming more active urban citizens.”