In 2020, the U.S. music business contributed $212 billion to the nation's gross domestic product, up from $180 billion in 2017, according to the latest iteration of a 50 State of Music report that incorporates data provided by independent record companies, organizations rights of execution. independent music venues, music museums and other organizations.
The booming music industry has also been good for the job market. From 2017 to 2020, the number of jobs supported by the music industry grew 1.9% annually from 2.17 million to 2.54 million, while overall U.S. employment growth was flat, the study found of the report by two economists from the company Secretariat. Direct employment — music industry jobs — rose from 1.13 million to 1.32 million over the same period, while indirect and induced employment improved from 1.04 million to 1.22 million. Indirect employment includes jobs resulting from the goods and services used by direct employment. Induced employment represents the jobs created by the additional expenditure of direct and indirect workers.
Fueled by streaming services and a revitalized vinyl market, recorded music revenue in the U.S. grew from $5.78 billion to $8.02 billion from 2017 to 2020, according to the IFPI. This growth coincided with a boom in the music business. During that four-year period, the number of music industry businesses and institutions — spanning entities from brick-and-mortar to digital companies — grew from 227,000 to 252,000.
Putting a dollar figure on the US music industry, the report effectively highlights the stakes in failing to prevent the threat artificial intelligence (AI) poses to business. A thorough study of music's economic impact is important for an industry that often seeks legislative intervention against new technologies and threats to copyright. If the revenue and employment of music businesses are hurt by AI, the losses will create a ripple effect that touches other businesses and workers.
“As Congress and state leaders struggle to figure out smart guardrails and innovative policies for the age of artificial intelligence, we are facing a truly unique, once-in-a-generation inflection point,” he wrote. Mitch GlazerPresident/CEO of the RIAA, which funded the study behind 50 States of Music. Glazier went on to welcome “new opportunities, sounds and experiences made possible through responsible AI innovation” but warned of the dangers of “irresponsible and unethical AI”. Unauthorized and uncompensated use of copyrighted music to train AI models “threatens to tear a hole in the fabric of America's music communities” and shift the economic impact of music to “global tech giants at the expense of artists , writers and music companies that shape America's 50 states,” he added.
California, where music contributes $51.4 billion to the economy, has the largest impact of the 50 states in terms of earnings, employment and value added. Texas, home to nearly 128,000 songwriters (per ASCAP, BMI, SESAC and GMR), ranks second at $26.6 billion, while New York is a close third at $24.9 billion. Florida, home of the Latin music industry, is fourth with $9.3 billion. Driven by country music in Nashville and blues in Memphis, Tennessee ranks fifth with $7.5 billion. And Pennsylvania, where music supports nearly 115,000 jobs, is sixth at $6.3 billion.
The report's authors used data from sources such as the Census Bureau, the Bureau of Economic Analysis and private sector data sets. The economic impact of music was calculated by estimating its direct revenue and employment and then using what is called the RIMS II multiplier — statistical tools developed by the Bureau of Economic Analysis — to estimate the downstream effects of direct revenue on local economies.
