Economists aren’t the only ones who should be interested in the data from the new “Copyright Industries in the US Economy” report by Stephen Siwek, released earlier today and available here. Anyone who follows the music industry, or the broader media landscape, should find the report interesting, as it enumerates the large degree to which content creation helps drive the economy. According to the report, core copyright industries (including music, movies, publishing, and many others) contributed more than $1.1 trillion to US GDP, and provided employment for about 5.5 million people (or 4% of the entire US workforce).
Big numbers followed by lots of zeros are always fun to look at, but the report really goes much further than most other sources of data to present details of the copyright economy. Public data sources tend to be very good at looking at traditional economic metrics, but specific data on a group of industries as diverse and rapidly evolving as those that specialize in copyrighted materials is hard to come by, and does not always lend itself to easy collection. This report makes extensive use of government data sources, but augments that information with further analysis to provide more detail than is generally available.
For example, one of the challenges is quantifying the impact of digital sales on the US trade balance. At midyear 2014, the music industry derived over 70% of its US sales from digitally distributed products (bit.ly/1ysNg8S), including a rapidly growing share from streaming services. Determining the contribution of those services towards US exports is especially challenging (think about trying to determine the foreign trade contribution when a music fan in France listens to a song by an American artist on a US music label, on a digital music service operating out of Sweden).
As Siwek describes in the report (page 15), he uses enhanced methodology to determine the foreign sales of specific copyright industries. We already know that American music is hugely popular overseas, so it’s no surprise that in in aggregate, four core copyright industries (including music) had foreign sales of more than $150 billion in 2013. That’s more foreign sales than any other industrial sector, including Chemicals, Aerospace, Food, or Pharmaceuticals. And US music alone had more than $6 billion in foreign sales (page 20).
Our takeaway – sound evidence that those who create original material are doing their share for the economy. Not just contributing to GDP, employment, and exports, but providing the basis for a whole range of economic activity ranging from newspapers to cutting edge technology.
Joshua P. Friedlander
Vice President, Strategic Data Analysis, RIAA