The Great Musical North
2009 November 12
New research from our Insights series out today: The Great Musical North.
An excerpt:
While the public perception exists that Canada is a hot spot for music and musicians, a comparison with the global leader in music production – the United States – helps us to separate perception from reality. We find that Canada has considerably greater per capita musical activity than the United States in terms of record labels, recording studios, and licensing houses. But the United States has much higher-earning businesses that are more heavily clustered in fewer places – especially Nashville, Los Angeles, and to a lesser extent, New York.
And the big chart:
Very informative! It would be interesting to conduct a per capita comparison of U.S and Canadian profits stemming from the sales and publishing of their respective domestic artists. This might indicate in part why U.S. establishments are faring much better. American artists can more easily gain exposure in Canada and elsewhere – both in terms of physical distribution and touring – than Canadians can in the United States. American artists’ sales and publishing likely constitute a larger segment of the Canadian market than vice versa.
And while Canadian labels profit from the distribution and sales of American artists, their share of the profits is much smaller than what goes to the American parent company. In other words, a higher proportion of foreign-owned music sold in Canada equals smaller revenue streams for Canadian labels and publishers.
These are fascinating data. I would take issue, however, with some of the interpretation of industry concentrations. First, you almost have to drop Nashville since it is so distinctive and so special. There is just no way that any city in the world is going to compare to Nashville’s massive concentration of recording industry establishments in a relatively small city, clustered around, more or less, a regional genre (country) with national and global appeal that, for a variety of reasons, HAS to be produced there, not New York and Los Angeles. Not to mention that Nashville is, more or less, a company town, with one dominant industry, namely, music. This is an amazing and beautiful thing in many ways. However, as Jane Jacobs famously argued, cities that specialize in One Thing burn bright but often burn out quickly, like Manchester or Detroit.
If you leave aside Nashville, then the difference between the top U.S. and Canadian cities is a lot smaller (3.43 to 3.13) and, more strikingly, the top 3 Canadian cities ALL have higher LQ’s than does New York. This tells me that whatever is driving the higher earnings per establishment is probably not industry concentration in cities, since the top Canadian cities are basically as concentrated as the top U.S. cities. But to really tell, you’d need to look at earnings per capita at the metro level. Why not try that?
A simpler hypotheses is to me simply the fact that Los Angeles and Nashville (and the U.S. more generally) are the production centers of popular music worldwide, which earns a lot more money than indie or Americana or Canadiana music. You could confirm/analyze this by merging the Insight results with our myspace genre data and asking how far genre-form concentration goes toward predicting industry receipts. I would bet that the centers of various forms of pop music (Los Angeles, Nashville, and I’d add Atlanta for rap/hip-hop) have earnings that go way beyond what their population, density, and record industry concentration would predict. Of course, this is an empirical hypotheses and so can be refuted; but we have the data, so let’s find out!
The other issue I have is with the suggestion in the last sentence that Canada should strive to compete with American cities by going for greater industry concentration. One of the markers of moments and places of musical creativity has typically been many, many smaller studios in search of new musical forms and talent outside of existing and central focal points of the music industry (see Tschmuk and Peterson for more on this). It may make more sense for Canada to aim to maintain and heighten its indie ferment, not try to compete with Nashville and Los Angeles at a game it can’t win. And if the general trend in the music industry is toward pop hits making less money but more bands making decent money (a “middle-classification” trend), then Canada would be very well-positioned.