The Nordic Music Sector

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  • 1. Dr. Ágúst Einarsson Professor University of Iceland Faculty of Economics and Business Administration [email_address] , www.agust.is The Nordic Music Sector, Nordic Co-operation and Creative Industries Reykjavik 13th of October 2006
  • 2. The Nordic Music Sector The Nordic music industry is a growing industry Related industries, such as music videos and software play an increasing role No clear boundaries between sectors, such as record companies, publishers and distribution Tax reduction could be very effective Education and music schools are among the most important factors
  • 3. Production process in the music industry Composers Musicians Producers Distributors Consumers
  • 4. Characteristics Supporting factors Music education Business education Financing Primary activities Composers Musicians Producers Distributors Consumers Instruments National, international and global impact Enterprises -records -concerts -videos -films -DVD Radio TV Internet Shops/retail Cinema Concert hall Homes Demand depending on quality, utility, taste and price Value Chain in the Music Industry
  • 5. More business education is vital A better coordination between cultural and business policy is needed Export is the key to success, as the Nordic market is relative small More research and better data are required The Nordic Council of Ministers can play an important role in supporting the Nordic music industry
  • 6. 180 120 15 250 240 3.000 - 7.500 3.000 - 7.500 1.000 7.500 - 9.000 6.000 - 15.000 Denmark Finland Iceland Norway Sweden Retail value of records in Million USD Employment in the music industry
  • 7. Global music market is approximately 33 billion USD The Nordic music market is about 3% of the world record market, but represents only 0,5% of the world’s population Denmark’s export of music is 100 Million $ and the turnover of Denmark’s music industry is 900 Million USD. It comprises 0,2% of all Danish industries Sweden is exporting for 920 Million USD of music products In the global industry only 2 of 10 albums succeed to recover production costs through selling. It is a risky business
  • 8. The turnover of the music market in Finland is 700 Million USD The music sector is a significant part of the Icelandic economy, 1% of the GDP The number of students attending music schools has grown by a factor of almost eleven over the last four decades The organisation of music schools in Iceland, with its mixture of private and public enterprises, is excellent Have all cultures the same opportunity to make their influence felt? Small areas often don’t have the financial ability to spread their influence
  • 9. 1.59 1.52 1.48 1.48 1.42 1.39 1.36 1.15 1.14 1.01 1.01 0.98 0.93 0.89 0.88 0.76 0.71 0.44 0.39 Bhutan (2004) Moldova (2004) France (2003) Malta (2001) Germany (2003) Albania (2002) Lesotho (2003) Thailand (1996) El Salvador (2003) Kenya (1994) United Kingdom (2004) China (2003) Indonesia (1993) United States (2004) Greece (2003) Costa Rica (2003) South Africa (2002) Japan (2003) Argentina (2004) 2.60 2.59 2.58 2.54 2.53 2.46 2.43 2.40 2.40 2.38 2.36 2.33 2.10 2.04 2.02 1.98 1.85 1.69 1.64 1,62 Canada (2004) Spain (2002) Australia (2004) Czech Republic (2004) Norway (2004) Switzerland (2002) Finland (2003) Croatia (2003) Italy (2003) Belgium (2003) Mauritus (2004) Romania (2002) Slovak Republic (2003) Austria (2003) Bulgaria (2004) Ukraine (2004) Sweden (2003) Bolivia (2004) Poland (2003) Ireland (1997) 6.18 5.55 5.00 4.85 3.66 3.65 3.53 3.41 3.26 3.20 3.17 3.09 3.08 2.95 2.84 2.78 2.78 2.71 2.62 2,62 Iceland (2004) Estonia (2001) New Zealand (2004) Luxembourg (2004) Latvia (2004) Georgia (2004) Tajikistan (2001) Kazakhstan (2004) Belarus (2004) Iran (2004) Kuwait (2003) Denmark (2004) Netherlands (2004) Lithuania (2004) Russian Federation (2004) Hungary (2002) Israel (2004) Slovenia (2004) Mauritania (2003) Portugal (2002) % Country % Country % Country Expenditures of the general government to cultural activities for 59 countries
  • 10.
    • The Nordic Co-operation
    • Nordic Council established 1952
    • Cultural co-operation, agreement 1972
    • Goals of the co-operation
    • Ways of reaching these goals
    • Three areas:
    • Nordic countries
    • neighboring areas (Baltic States, North-West Russia, Arctic region)
    • European Union (EU) and European Economic Area (EEA)
  • 11.
    • Priorities now are:
    • children and young adults
    • professional work of art and culture
    • minorities
    • non-governmental organizations (NGO)
    • The Nordic ministers of culture are responsible for the co-operation
    • Two funds: the Nordic Cultural Fund and the Nordic film and Television Fund
    • Ten Nordic institutions, including the Nordic Houses
  • 12.
    • Art co-operation in the following institutions:
    • The Nordic Literature and Library Committee (NORDBOK)
    • The Nordic Music Committee (NOMUS)
    • to promote co-operation by awarding grants
    • to increase composition, teaching and number of performances
    • secretariat of the Nordic Council Music Prize
  • 13. The Nordic Center for the Performing Art (NordScen) The Nordic Institute for Contemporary Art (NIFCA) The Nordic Museum Committee EU and EEA activities according to the Maastricht treaty Four Nordic Cultural prizes
  • 14.
    • Reform decided 2005, full effect 2007
    • more flexibility
    • co-operation
    • new working procedures
    • response to the challenges of the cultural life in the Nordic region
    • departure from sector thinking
    • thematic ventures
    • programs with limited time frame
  • 15.
    • Three new programs:
    • The Nordic program of computer-games to increase the quality of games for children and young people
    • Mobility and residence program for artists
    • Program for Nordic art and culture co-operation (cross-sectoral art program)
    • Closing institutions:
    • The Nordic Literature and Library Committee (NORDBOK)
    • The Nordic Music Committee (NOMUS)
  • 16. The Nordic Center for the Performing Art (NordScen) The Nordic Institute for Contemporary Art (NIFCA) The Committee for Children’s and Youth Culture The Committee for Culture and Mass Media Co-operation The Committee for Culture Projects Outside the Nordic Region The Committee for the Nordic Museums Co-operation The Nordic Journalists Center (NJC)
  • 17. Music Culture Creative industries
  • 18. Creative industries libraries, museums music, performing arts, photography, publishing, software and computer services, software, television, radio and media advertising, architecture, art and antiques market, crafts, design, designer fashion, film, video and cinema, interactive leisure,
  • 19. The concept of creative industries is an opportunity for the Nordic countries to become a global center for research, education and innovation in the creative industries An important aspect of any discussion of creation is to realise that creation often takes place in clusters For countries with a relatively low population it is important to stress cultural affairs
  • 20.
    • We can look at the individuals in the separate occupations and classify their work into the following four categories, i.e.
    • primary production,
    • manufacture,
    • services and
    • creative industry
    • Four dimensions instead of three dimensions
  • 21. 0.275 0.262 0.240 0.239 0.234 0.230 0.219 0.199 0.186 0.185 0.177 0.164 0.159 0.132 0.127 Bulgaria Latvia Uruguay Poland Portugal China Georgia Argentina Turkey Chile India Mexico Brazil Peru Romania 0.465 0.462 0.459 0.438 0.414 0.382 0.371 0.365 0.360 0.339 0.335 0.296 0.291 0.282 0.28 South Korea France New Zealand Austria Ireland Czech Republic Greece Spain Estonia Russia Italy Ukraine Slovak Republic Hungary Croatia 0.808 0.766 0.684 0.666 0.637 0.613 0.612 0.611 0.595 0.577 0.548 0.528 0.526 0.525 0.517 Sweden Japan Finland United States Switzerland Denmark Iceland Netherlands Norway Germany Canada Australia Belgium Israel United Kingdom The Global Creativity Index (GCI). 2004
  • 22. 4,33 4,30 4,26 4,24 4,18 4,14 4,08 4,03 4,02 4,01 3,96 3,96 3,94 3,89 3,73 Greece Poland Croatia China Mexico Turkey Russia Brazil Romania Argentina Uruguay Bulgaria Peru Ukraine Georgia 5,29 5,27 5,21 5,15 5,13 5,12 4,85 4,77 4,74 4,60 4,57 4,55 4,52 4,46 4,44 Australia Belgium Ireland New Zealand South Korea Estonia Chile Spain Czech Republic Portugal Latvia Slovak Republic Hungary Italy India 5,81 5,76 5,74 5,70 5,61 5,60 5,58 5,56 5,54 5,42 5,40 5,38 5,37 5,32 5,31 Switzerland Finland Sweden Denmark United States Japan Germany Netherlands United Kingdom Norway Iceland Israel Canada Austria France The World Competitiveness Index (WCI), 2006
  • 23. 0,00 -0,01 -0,03 -0,04 -0,09 -0,14 -0,23 -0,23 -0,31 -0,31 -0,38 -0,39 -0,49 -0,70 -0,82 Turkey China Latvia Brazil Poland Mexico Romania Croatia Uruguay Bulgaria Argentina Russia Ukraine Peru Georgia 1,16 1,15 1,14 1,11 0,96 0,87 0,56 0,52 0,47 0,36 0,27 0,23 0,19 0,16 0,08 Israel Ireland New Zeeland France Estonia Belgium Portugal Chile Spain Czech Republic Hungary India Slovak Republic Italy Greece 2,02 1,80 1,78 1,72 1,54 1,49 1,48 1,44 1,39 1,33 1,31 1,28 1,24 1,18 1,18 United States Denmark Iceland Finland Canada Sweden Switzerland United Kingdom Netherlands Norway South Korea Australia Japan Germany Austria The Index of Information and Communication Technology (ICT), 2005
  • 24. 0,08 0,03 -0,14 -0,15 -0,23 -0,25 -0,28 -0,36 -0,39 -0,50 -0,51 -0,62 -0,68 -0,91 -0,94 Brazil Slovak Republic Turkey Romania Latvia Croatia Mexico Russia Uruguay Poland Bulgaria Argentina Ukraine Peru Georgia 0,96 0,95 0,89 0,81 0,80 0,74 0,43 0,39 0,29 0,24 0,23 0,21 0,17 0,17 0,10 France New Zeeland Ireland South Korea Estonia Belgium Spain Portugal Chile Hungary India Czech Republic Greece China Italy 1,66 1,62 1,60 1,58 1,53 1,35 1,30 1,27 1,23 1,21 1,19 1,16 1,08 1,02 1,01 Iceland Finland Denmark United States Sweden Japan Switzerland Canada Australia United Kingdom Norway Germany Netherlands Israel Austria The Index of Information and Communication Technology (ICT), 2004
  • 25. 11.850 11.670 10.500 9.620 9.590 8.190 8.020 7.870 7.680 6.250 6.250 5.530 5.370 3.100 2.930 Latvia Croatia Chile Russia Mexico Romania Brazil Bulgaria Turkey Uruguay Ukraine China Peru India Georgia 29.200 27.950 27.860 25.070 23.510 22.130 22.000 20.400 19.250 18.400 15.620 14.370 13.190 12.640 12.460 Australia Germany Italy Spain Israel New Zealand Greece South Korea Portugal Czech Republic Hungary Slovak Republic Estonia Poland Argentina 39.710 38.550 35.370 33.170 32.360 31.790 31.550 31.460 31.360 31.220 30.660 30.040 29.770 29.560 29.320 United States Norway Switzerland Ireland Iceland Austria Denmark United Kingdom Belgium Netherlands Canada Japan Sweden Finland France Gross National Income (CNI) per capita at PPP, 2004
  • 26. Potential entrants Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitute products or services Industry competitors Rivalry among existing firms Buyers Suppliers Substitutes
  • 27. Government Firm strategy, structure and rivalry Factor conditions Related and supporting industries Demand conditions
  • 28. The contribution of the music industry to the Gross Domestic product (GDP) in the Nordic countries is from 0,5% to 1% 0,7% 0,6% 1,0% 0,8% 0,7% Denmark Finland Iceland Norway Sweden Estimated proportion of the contribution of the music industry to GDP
  • 29. Huge economic impact through art festivals Film festivals Music festivals Marketing, impulses, tourism Nordic Music Days Valuable artistic and economic contribution