Counting the Notes is the National Music Council?s 2002 report summarising the available economic data on the UK?s music industry, explains Robin Osterley.
Through descriptions of each stage at which value is created in the music industry, the report attempts to outline the value of the music sector to the UK?s economy, as well as recognising other less tangible ways in which music adds value to our everyday lives. It shows how composers and publishers, musicians, performers, managers, agents, presenters, recording companies and many others derive income and generate value and revenue. Three key measures have been calculated:

Value added assesses the contribution of the music industry to the total output of the economy. In practical terms, this meant adding estimates of income from employment and self-employment in the various sectors to published operating profits. A total of £3.6 billion is found to be generated from a wide range of activities ? music composition and publishing, live performance, the production and sale of musical instruments, music recording, retailing and distribution, education and training. But given the nature of the music industry, especially the uncertain employment status of many musicians, this figure is at best an imprecise indicator of total economic contribution.

Expenditure on music is somewhat less difficult to pin down. It is calculated by aggregating the key component of such expenditure which are consumer spending (including live performance admissions, sound recording and musical instrument purchase), spending by public and private corporations (including payments for the use of copyright music) and public sector spending, including Arts Council and Local Authority expenditure. A total of £4.9 billion is spent in the domestic market, and estimates suggest that the music industry also makes a significant contribution to the UK balance of payments, generating net earnings of £435m from overseas.

Employment numbers are perhaps the most problematic measure of all. Whilst the number of people employed by substantial companies in the recording and music publishing sectors and those teaching music full-time within the state education system can be ascertained with a high degree of accuracy, a satisfactory estimate of the number of full-time equivalent musicians is elusive. The estimate made in the report is that there were 126,000 full-time equivalent jobs in music in 2000, but this could be some way from the truth given that most musicians are self-employed and many are engaged in a number of economic activities both within and outside the sector. Thousands of individuals in semi-professional bands operating on the live circuit also pursue near full-time occupations elsewhere, and many more combine live performances or recording with the provision of private musical tuition.

It would be unrealistic to think that this report tells the whole story about the contribution the music industry makes to the economy. In addition to the value of music measured here, the industry supports merchandising, radio, and the manufacture and distribution of audio hardware. The design, law, and accounting professions are also dependent upon music for a portion of their income. Music journalism and the publishing of books about music also carry significant economic value. Television broadcasting through music channels and mainstream music shows such as Top of the Pops are linked to significant economic activity in the UK. Other creative industries, especially the film and advertising sectors, are often very reliant upon music for their impact.

What is more, the economic significance of the music industry, huge though it is, is by no means the be-all and end-all of the importance of music. In a world where numbers and statistics are becoming ever more important, we need always to understand the economic impact; but the proof of the importance of music also lies in the sheer joy of making and listening to music which enriches all our lives in so many ways. By looking primarily at the economic benefits we in no way underestimate the intrinsic significance of music nor its effect on the quality of people?s lives. It is absolutely impossible to imagine a world without music; and if it was imaginable, it is certain nobody would want to live there.


Robin Osterley is Chairman of The National Music Council. A copy of the report ?Counting the Notes? is available on the National Music Council website at http://www.musiced.org.uk t: 020 7820 9992 e: nationalmusiccouncil@ukonline.co.uk