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What is the value of music? Economically, socially, for culture. A broad-based study with various partners such as Augsburg, Bremen, Cologne and the Hannover region shed light on this. It was presented by Lucas Knoflach, Managing Director of Sound Diplomacy, at this year's Most Wanted in Berlin. We talked to him about it.
CCB Magazine: Hi Lucas. Since May 2020, you are the Managing Director of Sound Diplomacy's German office. Please tell me, what do you do at Sound Diplomacy?
Lucas Knoflach: Sound Diplomacy is a global consulting agency, we advise cities, regions, countries, but also organizations worldwide to develop the music ecosystem and the night-time economy. We work primarily in the music and nightlife sectors, but also in the creative industries. It's not only about economical value, but also about social and cultural aspects. For cities and regions, we want to find out what value music and night culture have for them and how they can be developed in a sustainable and deliberate way.
CCB Magazine:In cooperation with the Initiative Musik and the MusikZentrum Hannover, you conducted a broad-based study on the value of music, which you presented at Most Wanted. What areas did you look into?
Lucas Knoflach:In total we examined seven sub-sectors: the creatives, music events and venues, music recordings and publishers, public and private music schools, the manufacture and retail of musical instruments, radio broadcasting, and audio devices and loudspeakers. The focus was on the economic analysis. In addition, we looked at soft factors to also capture the social value of music. In this context, we conducted 28 interviews with various stakeholders.
The goal of the study was to gather comparable economic data on the music ecosystem at the regional level. Particularly with a view to cities and regions that might not otherwise be in the spotlight, our study shows the potential of the music ecosystem, also outside the traditional music hubs
CCB Magazine:What are the key findings of your study?
Lucas Knoflach:In the territories assessed, the direct revenues of the music ecosystem amounted to 10.5 billion euros in 2019. In total, around 84,600 people are employed in the music ecosystems in these territories. In addition, the findings in the study highlight the interconnections between the music ecosystem and the local economy. For example, 1 euro of gross value added in the music ecosystem leads to over 1.3 euros of gross value added outside the music ecosystem. It can also be noted that the event and venue sub-sector is the most important in terms of employment. A large number of marginally employed and self-employed people work in this sector. The study was able to show that the music ecosystem within the territories assessed areas grew more strongly than the overall economy, with a revenue growth of 22 percent between 2014 and 2019, whereas the overall economy grew at around 18 percent. Territory-specific positive and negative trends could be identified. Now, a data basis exists for future decisions.
CCB Magazine:In Berlin, many people emphasize that the club scene is a core element of the city. How important are music and clubs for tourism?
Lucas Knoflach:Berlin was not included in our study. But there is a study by the Clubcommission that confirms how important the club scene is for Berlin: A quarter of all tourists come to Berlin because of the clubs. Every year, the clubs generate a turnover of around 170 million euros. In general, it can be said that music experience and nightlife play a central role in tourism, and not only in Berlin. Concerts, clubs, etc. always strengthen the local economy as well, from local artists and promoters to hotels and restaurants.
The study was able to show that the music ecosystem within the territories assessed areas grew more strongly than the overall economy, with a revenue growth of 22 percent between 2014 and 2019, whereas the overall economy grew at around 18 percent
CCB Magazine:Is there a finding from the study that surprised you?
Lucas Knoflach:The results show that general developments in the individual subsectors of the music ecosystem allow only for limited conclusions to be drawn about regional developments. This can be illustrated, for example, in the case of events and venues: On study average, this sector was able to increase its gross value added by more than 20 percent between 2014 and 2019, but the available results show that this subsector has developed very differently from region to region. For example, gross value added doubled in one area, while it halved in another. This shows how important it is to collect regional data in order to be able to take the appropriate measures in terms of funding and strategies for the further development of the respective music ecosystem. Otherwise, the figures of the study confirm many things that are characteristic for the music ecosystem, such as the large number of nano-self-employed and freelancers, especially in the sub-sectors of creatives, music schools, and events and venues. Through the KSK data, which relates to creatives and music schools, one can see that a gender pay gap between men and women continues to exist, with the latter receiving a lower income.
CCB Magazine:What is also conspicuous about the study is that two major candidates are missing. Hamburg and Berlin, Germany's largest music and cultural centers. Is a study on the value of music in Germany at all meaningful if two of the most important objects of research are missing?
Lucas Knoflach:The goal of the study was to gather comparable economic data on the music ecosystem at the regional level, to understand its influence, and also to identify strengths and weaknesses. As a collaborative project, there was interest from several cities and regions that joined the study. For some of the study partners, comprehensive figures were collected for the first time. And with Cologne and Munich, we have included two very important music hubs in Germany, the figures underline this once again. I am convinced that every city and region can benefit by investing in the music ecosystem and taking a comprehensive view of music. Particularly with a view to cities and regions that might not otherwise be in the spotlight. Our study shows the potential of the music ecosystem, also outside of the traditional music hubs.
We have seen a lot of musicians give up their jobs or been forced to choose another, more secure profession.This also applies to the live sector, where employees such as technicians have migrated to other areas and we might therefore see a shortage of staff when concert life picks up again and demand increases
CCB Magazine:Let's leave the economic aspects aside. The study emphasizes that the overall social value of music should also be recorded. Can this be measured at all? What was the result?
Lucas Knoflach:This is an exciting topic. As you say, it's difficult to capture and quantify. Undeniably, music plays an important role in our society, but there is actually little hard data on that. It's much easier to measure the economic value. The pandemic, it can be said, put a spotlight on the social and cultural factors of music, also due to the absence of live music. It became clear how important it is for people to be able to enjoy live events or to make music together. During the pandemic, unsurprisingly, the numbers for streaming went up. On the other hand, we have seen a lot of musicians give up their jobs or been forced to choose another, more secure profession. That is regrettable. This also applies to the live sector, where employees such as technicians have migrated to other areas and we might therefore see a shortage of staff when concert life picks up again and demand increases.
CCB Magazine:Does this mean that the pandemic has led to a kind of shakeout in the music sector? And if so, what does that mean for the economic and social-cultural value of music?
Lucas Knoflach:Overall, a greater awareness of value can be seen. In many areas, however, the pandemic has also revealed and intensified problems that already existed before the crisis. This is where we need to start in order to drive long-term change to strengthen the music ecosystem in cities and regions, to create better conditions for musicians, to secure and provide spaces, and to create better framework conditions overall. This benefits not only the music ecosystem, but also the economy and society as a whole. Music should be deliberately included everywhere.
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