Music industry worth £3.5 billion to UK economy

The UK music industry was worth £3.5bn (A$6.3 billion) to the British economy in 2012. This is according to new figures released early this morning (Australian time) from UK Music, the trade body for the recorded and live music industry.

This figure is much higher than previously thought.

Broken down, musicians, composers, songwriters and lyricists generated £1.6 billion ($2.9 billion) and employ seven out of every 10 people who work in the sector. Live music made £662 million ($1.2 billion), the recorded music sector was worth £634 million ($1.1 billion), while music publishing made £402 million ($732.4 million). Music representatives, a category covering trade bodies, managers and collecting societies, made  £151 million ($275 million). The recording sector – including music producers, studios and their staff – was responsible for £80 million ($145 million).

In a statement in the new report, UK Music declared: “Music is one of the most investment-intensive industries in the economy. Record labels were integral to the development of the music industry and remain fundamental to the industry today – not least as they remain the largest investors in music talent – investing up to 20% of revenue in artists and repertoire.

“In 2012, labels and publishers invested more than £450 million ($820 million) in artist and repertoire. In addition, music collecting societies are investing significantly into repertoire databases and other data infrastructure to keep the UK’s competitive advantage in global digital markets.”

Until now, it has been difficult to effectively measure the worth of the music industry, UK Music pointed out. The Office for National Statistics tends to lump music together with other creative sectors such as dance, comedy, theatre, opera and art. UK Music found that 86% of figures from record labels and music publishers are stored “using inaccurate codes.” Smaller companies and freelance workers earning less than £79,000 ($143,000) are not included in statistics.

The UK Music approach was to base it on GVA (Gross Value Added), employment and export, all of which were painstakingly compiled.

In terms of export value, the industry contributed £1.4 billion ($2.5 billion) to the economy, with music publishing leading the way with £509 million ($927 million). Recorded music contributed £305 million ($555 million) and live music £152 million ($276 million). Music export value was 40% of its GVA, which is 5% higher than the average in the rest of the UK economy.

The British music industry employs 100,000 full-time workers. The U.K. live music business has the second highest number of employees (13,500), with the recorded music industry – comprising labels, distributors and physical manufacturers – employing just under 10,000 full-time staff.

The first of what will become an annual study, The Economic Contribution of the Core UK Music Industry report can be downloaded here.