© Katharina Schiffl
New study on the Austrian music industry
The new study "Value Creation of the Music Industry in Austria 2024" by the Austrian Film and Music Industry Association, the Austrian Music Industry Association - IFPI Austria and the music collecting society AKM shows that the Austrian music industry is an invisible giant.
A new, comprehensive study makes it clear that the Austrian music industry is the third strongest sector in terms of added value at 7.5 billion euros, accounts for 2.8 percent of GDP and every musician generates 16 additional jobs - but this powerful economic engine has so far been vastly underestimated. More investment in the music sector would strengthen the entire economy.
The new study "Added value of the music industry in Austria 2024" shows that around 117,000 jobs are directly and indirectly dependent on the domestic music industry - that is as many jobs as in the entire mechanical engineering sector and significantly more than in the IT or financial sector. It generates fiscal effects amounting to 4.35 billion euros, or around 2.8 percent of Austria's GDP.
Comprehensive data for the first time
The study was commissioned by the Austrian Film and Music Industry Association, the Austrian Music Industry Association - IFPI Austria and the music collecting society AKM in order to identify and rectify a glaring statistical problem: The music industry has so far lacked a clear classification in the political and economic system. As a cross-sectional matter, it has a major influence on a large number of economic sectors - for example in the areas of production, trade and services - but this is precisely why no reliable data has been available for individual sub-sectors of the music industry to date. There is no definition of the music industry in Austria, and key areas are not included in the economic statistics. It is not just about music recordings, music publishers or music events, but also, for example, consumer electronics (audio accessories for computers, car radios, storage media) or the use of music in museums.
This study addresses the problem by creating a satellite account for the music industry that takes into account and presents the direct, indirect and induced effects of the sector. The most important results are presented below:
Gross value added 7.5 billion euros
The creatives and music makers throughout Austria alone, with around 7,000 direct employees, represent only a small part of the sector. But this small sector can be seen as a spark for an impressive fire and a powerful economic engine - because the distribution and use of the works and rights created, right through to music tourism, generates gross value added of 7.5 billion euros a year.
"The new study proves once again that the domestic music industry not only creates a red-white-red identity, but is also a significant economic factor," says Franz Medwenitsch, Managing Director of the Association of the Austrian Music Industry - IFPI Austria. "A relatively small creative-producing core triggers enormous economic effects at the end of the value chain."
If the music industry is properly defined, it is one of the largest sectors in Austria: with around 117,000 jobs in total, it is in second place behind the retail sector (127,000 jobs). A small core of around 7,000 people therefore drives an industry that employs around 95,000 people directly and 20,000 indirectly. In terms of gross value added in Austria, the music industry is in third place behind healthcare and land transportation, ahead of energy supply, building construction, food retailing and gastronomy.
Incidentally, the majority of them are female (56.6 percent) and only 17.7 percent of employees in the music industry are self-employed. "Of course, it would be nice if the results of this study not only triggered a brief round of applause for the added value of the music industry, but if it were also followed by active appreciation in the form of genuine - yes, even political - support," says singer-songwriter Ina Regen.
Music professionals provide 16 additional jobs each
"The study shows us that the Austrian music industry has been hugely underestimated due to a lack of meaningful data. The more active and successful creatives are active in the country, the more effects they generate across the entire value chain," says Georg Tomandl. He is not only a music producer, but also Chairman of the Austrian Music Fund and Deputy Chairman of the Professional Association of the Film and Music Industry. "On average, each and every statistically recorded musician is associated with a further 16 jobs in Austria, which are often less visible but make this complex music ecosystem possible in the first place," adds Anna Kleissner, Managing Director of Econmove GmbH and Head of the Institute for Austria's Economy. Although the economic performance of music is just as important as that of the catering or hotel industry, "it lags far behind in terms of perception".
Export driver with dormant potential
It is also clear what is being lost: the high proportion of imports results in a high outflow abroad. This is particularly painful in the production of music for use on radio and TV and at well-known major events. As a direct effect, fees and royalties run into the millions. Public administration and education have comparatively low import quotas. True export drivers with dormant potential are music tourism and foreign students.
On the other hand, the music streaming market, which is becoming increasingly important, is "a financial disaster for music creators", complains AKM President Peter Vieweger.
Investments are returned many times over
For Hannes Tschürtz, the chairman of the Label professional group in the trade association, the conclusions to be drawn from the present study are crystal clear: "The smarter and better we can support creatives in the local music industry, the stronger the value creation effects will be - and with them the entire sector." This results in a kind of instruction for action for Austria's musical future: the key to a stronger domestic music industry - and thus to better exploiting its economic potential - is investment in the music and music industry training sector, "which in itself already has great economic effects," says the professional group chairman. In addition, there is the realistic prospect of fueling sustainably successful artistic projects. "These investments come back many times over," emphasizes Tschürtz.
Singer-songwriter Ina Regen also underlines this assessment with her own experience: "My breakthrough in 2017 with significant daily rotation on the biggest domestic radios and media coverage in TV and print media also surprised me with my entrepreneurial size within a very short space of time. It went from a one-woman show to work orders for over 100 freelancers within just a few weeks."
Austria's small music market is often unable to make the necessary investments on its own, says IFPI Managing Director Franz Medwenitsch. "The state must therefore be prepared to provide sufficient funding for domestic music production and international marketing - i.e. the export of domestic music creation."
Politicians are also called upon to act as legislators: "The Austrian music industry is under pressure. Digitalization, global streaming platforms, increased competition for the attention of music fans and, most recently, developments in generative artificial intelligence pose enormous challenges for the music industry. 'World-famous in Austria' is no longer enough. In order to keep up, the right legal framework is needed - keywords: copyright law, AI law and tax incentives."
A "Master plan for Austria as a music location"
"We must finally begin to understand music in its entirety and thus not only as an entertainment factor, but also as an important driver of value creation and employment in the domestic economy," demands Econmove Managing Director Anna Kleissner. Hannes Tschürtz, Chairman of the Label Professional Group, goes one step further: "It is high time for a master plan for Austria as a music location! We now see the creation of such a plan as our next task." In order to be able to negotiate this with the government, Franz Medwenitsch would like to see a central contact person responsible for the creative industries at government level, i.e. the cross-sectional issue between culture and business.
More Austrian music on the radio - more revenue
In order to leverage the huge potential in view of the global demand for music in various channels and for a wide variety of purposes, Michael Paul, Managing Director of paul und collegen consulting, sees two main levers that need to be tightened together: "In Austria, the bottleneck of the low media presence of younger Austrian artists and their music in particular needs to be widened. And music from Austria needs to be more widely distributed abroad - this requires structures and money to be able to take risks with appropriate investments." IFPI Managing Director Medwenitsch already has a concrete wish for this: "An annual endowment of the music fund up to 5 million euros - VAT on sound recordings and music services down to 10 percent!"
One important lever is the live business, which has a particularly strong spillover effect, especially in tourism and gastronomy. "Live concerts with Austrian music of all genres are popular and well attended, they stand for the diversity and quality of the industry," says AKM President Peter Vieweger. "However, this positive development is not reflected in the national radio stations, which mainly focus on old favorites or international hits and have so far underestimated the positive appeal of Austrian music."
These media appearances are the second important lever and a significant impact booster for revenues in other segments: increasing the share of Austrian music on the radio by just 5 percent would lead to additional annual direct revenues of more than 1 million euros. "These significant results will hopefully also contribute to increased self-confidence among Austrian music creators," says Ina Regen. "The fact that most of us practice this profession as a vocation must no longer be used against us. Our work is important, not only for the mental health of the population, but also as an economic factor for politics."
Measures to strengthen the music sector economically would also have positive tax effects, calculates management consultant Michael Paul. "The tax authorities already collect 4.3 billion euros in taxes from the activities of the music industry." It could be much more. (PWK181/HSP)
AKM President Peter Vieweger, Chairman of the Label Professional Group Hannes Tschürtz, singer-songwriter Ina Regen, management consultant Michael Paul, Econmove Managing Director Anna Kleissner, IFPI Managing Director Franz Medwenitsch (© Katharina Schiffl)