Together 18 per cent: the music industry ecosystem is growing
Berlin/Hamburg, 25 November 2024 – ‘The music industry grows and makes others grow’ – that is the core message of the 2024 Music Industry Study. The first results on the economic performance and significance of the music industry as a whole were presented and discussed in September as part of the Musikdialog Hamburg. The final report of the study, which has now been published, shows that In the music industry, everyone grows together – because the positive trend in the overall figures is reflected in every single sub-sector. At the same time, the industry is characterised by particularly close interrelationships, which means that it shares both successes and risks. Cost increases in concert production, for example, lead to higher revenues on the one hand, but on the other hand, they put smaller music venues and the promotion of young talent in the live sector under particular pressure.
The German music industry is a significant and dynamically growing economic sector that generated revenues of around 17.4 billion euros in 2023. The associated gross value added was approximately 6.6 billion euros. This means that the overall performance of the highly interconnected sub-sectors has grown by 18 per cent over the past five years (2019: 14.8 billion euros). Gross value added even increased by 20 per cent over the same period. With a total of 156,000 people in employment in 2023, the industry's role as a relevant employer has also continued to grow since 2019 (+4%). The industry discussed these figures of success on 18 September at the traditional Musikdialog Hamburg at the invitation of the Senate Chancellery Hamburg and the Hamburg Ministry of Culture and Media with the First Mayor Dr. Peter Tschentscher and Senator for Culture Dr. Carsten Broda. At the same time, a warning was issued: increases in turnover do not necessarily mean increases in profits.
The completion of the final report of the study now confirms in detail what has already been discussed for the music industry as a whole at Musikdialog Hamburg: all the individual sub-sectors of the music industry also grew in 2023, by up to 20% compared to 2019.
Sales and employment figures for the sub-sectors of the music industry
The sub-sector with the highest turnover is ‘music events’, with 5.6 billion euros and 58,000 employees, followed by ‘music recordings’ (4.2 billion euros and around 23,000 employees) and ‘musical instruments’ (2.9 billion euros and 14,600 employees). Other sub-sectors include music publishers (€610 million), music teaching (€585 million), collecting societies (€1.5 billion) and the creatives themselves (€930 million).
Taken together, all sub-sectors of the German music industry make a significant contribution to the country's economic development. However, as their economic relevance increases, so does their social responsibility. The industry's salary and wage structure is revealing in this context: with a gross value added of €6.6 billion in 2023, €3.2 billion was paid out in wages and salaries. Compared to €2.4 billion in 2019, this is an increase of 33%.
Close interconnection and great appeal
The way in which the sub-sectors of the music industry generate their revenues also reflects their sense of collegiality and solidarity – in close interconnection, measurable and readable in the advance payments: In 2023, music companies will source around 80% (8.5 billion euros) of a total of 10.5 billion euros in intermediate inputs (purchases of goods and services) from other companies in the music industry (vertically integrated industry). This interdependency is particularly strong compared to other economic sectors (the German automotive industry and the finance industry source 44% and 34% of their intermediate consumption from their own industry). While this interdependency creates internal dependencies, it also makes the music industry a bit more independent from developments in other economic sectors.
And while in the music industry the success of one determines the success of the other, it also makes other industries shine: entire industries are based on the products of the music industry or would be unthinkable without them. For example, music content serves as an essential input or music equipment as necessary technology for economic activity in industries such as broadcasting or as complementary goods for consumers on music tours or of electronic devices. In 2023, these so-called spillover effects amounted to a turnover of around 28 billion euros.
The figures in relation
The results of the sub-sectors are a further success story for the music industry, given the still noticeable effects of the multiple crises caused by the Corona pandemic and the war in Ukraine, especially on the live industry, the dynamic developments in the streaming market or the tense situation for retail in urban areas.
The key figures for gross value added and employment reveal differences between the relative shares of the various sub-sectors of the music industry. Live music events had the largest share of gross value added in 2023, accounting for 38% of the music industry's gross value added. This was followed by the sub-sectors of musical instruments and music recordings, with 20% and 19% respectively.
A different picture emerges when we look at the proportional distribution of the workforce in the individual sub-sectors. Although the music event sub-sector was still the largest sub-sector, accounting for 37% of all those employed in the music industry, it was followed by music teaching (18%), creatives (17%) and music recording (15%).
Overall, the success figures of the music industry reflect the fact that people are currently looking for cultural events and experiences. Music, shows or spoken word in all their modes of consumption and participation can offer them this – which, in addition to its proven economic significance, also gives the music industry social responsibility.
Press release ‘Music industry grows and lets others grow’ (18 September).
The study Music Industry in Germany 2024 was completed by the economic consultancy firm Oxford Economics under the direction of Johanna Neuhoff on behalf of GEMA, GVL and leading industry associations of the music industry as the Forum Musikwirtschaft (BDKV, BVMI, DMV, IMUC, SOMM, VUT) and EVVC. The study was funded by the Hamburg Ministry of Culture and Media and the Federal Ministry for Economic Affairs and Climate Protection.
