Managing Director & Senior Partner; Global Leader, Strategy
Related Expertise: Media Industry, Economic Development, Digital, Technology, and Data
It’s hard to talk about the history—and the business—of music without talking about New York City. It is the place where genres have been defined, where the biggest stars play the most storied venues, where record labels have built major operations—and major talent. New York City has had a huge influence on how music is created and commercialized, and it continues to do so. At the same time, music has had an impact on New York City. In addition to creating hits, the music industry creates jobs, spending, and business revenue.
To better understand this economic impact, as well as the trends that can potentially spur or hinder it, the NYC Mayor’s Office of Media and Entertainment commissioned a detailed assessment of the local music ecosystem. Produced in conjunction with The Boston Consulting Group, the resulting report—Music in New York City: Economic Impact, Trends, and Opportunities—reveals just how important a role music plays in the city’s economy. All told, New York City’s music ecosystem supports nearly 60,000 jobs, accounting for some $5 billion in wages, and generates a total economic output (in business revenue and self-employment receipts) of $21 billion.
These are eye-opening numbers that are also notable for the growth rates associated with them. Total music-related jobs and wages are growing at annual rates of 4% and 7%, respectively, outpacing total city jobs and wages, which are growing by 3% and 5%, respectively. But not all music-related output is created equally. The report breaks down the total economic impact into its underlying components:
The study also reveals how the pillars of the music ecosystem affect the city’s economy in different ways. Mass music consumption, consisting of marquee live performances, broadcasting, and streaming, is responsible for the largest share of total wages and output, at approximately 30%. Local artist communities, meanwhile, represent more jobs—approximately 12,000—than any other pillar, yet the average annual wage, at roughly $50,000 a year, ranks lowest (number one on the chart: the global record business sector, with an average wage of $126,000 a year). In fact, median wages for artists are likely significantly lower considering that New York City houses a significant number of superstars who can earn up to $100 million a year. (American Community Survey data suggests that median wages for musicians, singers, and related workers may be about $30,000 a year.)
Understanding the dynamics of New York City’s music industry is doubly important today. Worldwide, the music business is undergoing profound shifts; changes that aren’t just affecting the industry but in many ways reshaping it. Digital technologies and the new services built upon them have been disruptive: music is being made and distributed in all-new ways. This is creating both opportunities and challenges. The report homes in on how—and where—these are appearing within New York City’s music ecosystem. Among its findings:
Even in the midst of digital disruption, New York City still enjoys significant “old school” advantages over other music cities. It is home to the leading players in advertising, media, and finance—industries that provide critical support to the music business. The city also boasts a seemingly insatiable appetite for mass live-music consumption. Marquee events regularly sell out, often in minutes, yet the city’s major venues sell fewer tickets per capita to 18- to 54-year-olds than cities like London and San Francisco. This suggests that more venues and music festivals could be added to the city’s roster without cannibalizing existing ticket sales.
Findings like these raise a key question: What can New York City’s government do to help its music industry seize the opportunities and beat back the challenges? The report recommends a multipronged approach:
As the music business enters a new era, New York City can, once again, play an essential role in shaping the landscape. And it can reap significant economic benefits in the process.
The original version of the report was published by the New York City Mayor’s Office of Media and Entertainment.