Report: Here’s how much NZ’s music industry contributes to economy

The New Zealand music industry directly contributed NZ$245 million (A$231.09 million) last year to the New Zealand economy. This was up from $213 million (A$200.9 million) in 2014.

It also added 2,259 full time equivalent employees (FTEs), up from 1,754.

This is according to PricewaterhouseCoopers’ New Zealand Music Industry Economic Report 2015 report, issued late last week.

Said Damian Vaughan, CEO of Recorded Music New Zealand, “After accounting for multiplier effects, the music industry contributed a total of $484 million (A$456.52 million) to national GDP and the equivalent of 4,508 full-time jobs.”

The music industry experienced difficult conditions for many years. But 2015 saw four of five music sectors showing growth, particularly in retail and live music.

Broadcasting Minister Amy Adams said, responding to the report, “It’s incredibly encouraging to see such a positive year for the New Zealand music industry, with four out of five market segments recording increased growth rates.”

The biggest contributing sector was music radio broadcasting with $92 million (A$86.7 million) after earnings of $227.8 million (A$214.8 million). It accounted 679 FTEs. After allowing for multiplier effects, music radio had a total economic impact of $214.5 million (A$202.3 million) in GDP and 1,782 FTEs.

The report emphasised that over the past four years, “The trading conditions in commercial radio have been tough in New Zealand, consistent with global trends, as advertisers are spreading and diversifying their investment across various media as well as changing consumption patterns towards on-demand and mobile streaming services. There are challenges in sustaining momentum in this subsector.”

Live music’s contribution was estimates at $75 million (A$70.7 million), from total sales of $150 million (A$141.8 million) after a huge amount of international acts toured during the year. It was also responsible for 1,111 FTEs.

Music retail, with total sales of $94.6 million (A$89.2 million), contributed $62 million (A$58.4 million). Despite piracy issues, music retail doubled consumption via online streaming which contributed $22.7 million (A$21.4 million) after the sector generated revenue of $36.8 million (A$34.1 million) with Apple Music and Spotify expanding considerably.

Physical sales contributed $23.4 million (A$22 million), from total sales of $31.8 million (A$29.9 million). Downloads added $16 million (A$15.09 million) from total sales of $26 million (A$24.5 million).

Significant also is the rise of support for New Zealand-originated music. In all retail channels, NZ music took 10% of purchase. Figures indicate “out of every $100 (A94.30) of music purchased at retail outlets, $13 (A$12.25) was spent on New Zealand music.”

$13.8 million (A$13.01 million) came from communication and public performance, which in 2015 earned for the NZ music industry earned $42.7 million (A$40.2 million) in royalties outside radio. This sector employed 204 FTEs. From multiplier effects, the figure rose to a total economic impact of $28.9 million (A$27.2 million) in GDP and 352 FTEs.

Synchronisation contributed $2 million (A$1.88 million) and 29 FTEs from gross revenues of $4.1 million (A$3.8 million) and 50 FTEs. Three quarter of the income of this sector came from music.

Arts, Culture and Heritage Minister Maggie Barry pointed out that the contribution music is making to GDP and employment has shown a significant increase between 2014 and 2015.

“We know from the report that there has been a positive impact on the economy over the past three years,” she pointed out. “We are committed to ensuring that support for the industry continues.”

The Government contributes $1.85 million (A$1.75 million) to the New Zealand Music Commission whose work includes music education, domestic growth and export growth of New Zealand music and NZ On Air contributes approximately $4 million per year towards a range of music products.

“We recognise the rich contribution music makes to New Zealand culturally, economically and socially,” said Ms Barry.

The report contains the analysis of the domestic New Zealand music industry only. An analysis of export and overseas earnings will be included in a separate report.

The New Zealand Music Industry Economic Report 2015 was commissioned by Recorded Music NZ, APRA AMCOS and the New Zealand Music Commission with the support of NZ On Air, Te Māngai Pāho, Creative New Zealand, Independent Music NZ and the Music Managers Forum.

The full report can be foundHERE.