A recently produced study of live music in Australia makes a thoughtful contribution to the discussion around the importance of a vibrant music scene. The Economic & Cultural Value of Live Music was released earlier this month by the University of Tasmania and Australia’s Live Music Office, as well as partnering organizations, Creative City Sydney, the City of Melbourne, and the Government of South Australia.

Big Benefits

The headline in this report is that for every dollar spent on live music in Australia, three dollars of benefits are driven back into the community. This cost-benefit analysis framework makes this study unique. It tries to capture the economic benefits of live music under three categories: commercial, civic, and individual.

As a starting point, the report demonstrates that the usual way of measuring live music benefits (by using information gathered from producers of live music) captures less than half of the real value. Producers can report on such things as ticket sales and food and alcohol sales. However, data is often limited to activities like festivals or licensed live music venues, often not capturing the full scope of live music presentation. In addition, according to the report, “producers are unlikely to be able to reliably account for the secondary markets that exist within their venues, such as ticket scalping and merchandise sales.” Further, this initial spending also triggers things like accommodation and travel expenditures, and according to the study, things like memberships and subscriptions, clothing, phone and internet.

For that reason, in addition to interviewing producers of live music, the researchers surveyed consumers.

When all of these categories of value are calculated, the researchers estimate that live music delivers benefits of $15.7B to the Australian economy.

A Spotlight on Live Music Capital 

One the areas explored in depth in this report is the impact live music has on commonly accepted forms of capital: physical, human, social and symbolic.

Physical capital refers to the physical assets that are created by the live music scene. There is a large list including performance spaces, rehearsal spaces, training institutions, production companies, touring companies, acoustic manufacturers and media. The report also includes the “neighbourhoods where musicians and other creative individuals choose to live.”

Human capital refers to the knowledge and skills, education and training, and physical and mental wellbeing that results from live music.

The community benefit most commonly identified by both consumers and producers of music is social capital. To put it simply, live music encourages a sense of community. In Toronto, people reported observing the same thing during Panamania events this summer.

Finally, symbolic capital is the value of being known or recognized. This can apply to individuals as well as regions, cities, and venues. In The Mastering of a Music City, we reference the ways in which a music scene contributes to a city’s brand or identity.

Putting an Economic Value on Live Music Capital

The commercial benefits were valued at $AU2.1B. This is a combination of profits achieved by producers of live music after the net costs are subtracted; a productivity calculation for those businesses, and an additional productivity calculation for those consuming music – essentially, the degree to which live music consumption made them more productive at work.

Civic benefits include the number of jobs generated by live music in Australia. This study estimates that 65,000 full-time and part-time jobs have been created, valued at $AU2.2B, as well as the taxation revenue of $AU950.6M. The job calculation is based on consumer spending modelling and the authors note it is very conservative which will explain why it differs from other studies in Australia.

The individual benefits are calculated to include both the actual spending by consumers, as well as what they would have been willing to pay. The actual market value of what consumers spent on live music was estimated at $AU5B with an additional surplus value of $AU5.4B.

Live music delivers strong ROI

In order to assess the true meaning or value of live music, the researchers compare this net benefit ($15.7Billion) to the cost of inputs ($AU5B) in order to come up with the benefit-cost equation of 3:1 –for every dollar invested in live music, more than three are returned.

This report is the most comprehensive valuation of live music I have come across. So often we speak generally about the social and cultural benefits of live music but seldom do we assign them an economic value. In trying to do this, the researchers bring a greater understanding to the multitude of benefits of live music and provide a strong argument for continued government investment in Australia. The Live Music Office in Australia was also a valuable contributor to The Mastering of a Music City.

Later this year, I will be speaking about our report at the Melbourne Music Symposium, an invitation-only event, along with Robert Kronenburg, Roscoe Chair of Architecture at the University of Liverpool, and Producer and Musician James Black.