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.
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.