Economy stalls – music export grows

Since 2004, Music Export Finland and more recently Music Finland have been publishing reports about the market value and structures of Finnish music export. These reviews have shown a clear growth in the industry, and the latest report supports the trend – even during these difficult financial times, music export remains a growing industry.

In 2014, music export attracted €42.8 million into Finland. Finland’s biggest export champions cannot take full credit for this growth: even the smallest streams are contributing to the river of income.

“Across all genres, there are currently several different-sized operators who have an international presence,” says the author of the report, Jari Muikku of Digital Media Finland.

(A)live and kicking

The report on the market value and market structure of Finnish music export in 2013–2014 examines music exports through five different areas including live music, recordings, copyright, other export earnings, as well as other products and services. Out of these five areas, live music export has shown the most significant growth: from 2012 to 2013 there was a 33% increase, and a further 10% from 2013 to 2014. During the 2010s, the value of live music export has as much as doubled.

Recent structural changes across the industry are thus also affecting export. The relative significance of live music has increased due to the general decrease in recording income. Export income which is specifically copyright-related has not experienced any major changes in recent years.

This time, another interesting trend has emerged from music software and applications, which are included in a category titled “other products and services”.

“Applications are a new phenomenon in the field, and we need to consider to what extent they can be counted as part of music export. I think we should apply an ‘ecosystem thinking’ here – the industry consists of many different sectors which all influence each other, and thus it is important to include these active and rapidly growing areas as well,” Jari Muikku states.

Challenging comparability

There has been a specific focus to align the latest report with other domestic and Nordic music industry reviews in terms of comparability. One of the tools used for pursuing this was to create the above-mentioned division into five key areas. However, differences still seem to remain in the different ways statistics are calculated in each country. Curiously, based on live-music export figures, the Finnish and Norwegian music industries appear to be roughly the same size, whereas Norwegian figures for 2013 recording exports are nearly twice as much as their Finnish equivalents.

NOMEX, a pan-Nordic export organisation platform, carried out a pre-study in 2014 about the comparability of Nordic statistics. A secondary aim was to produce recommendations and suggestions on how to create statistics that are as comparable as possible. While the pre-study found that the statistic figures examined in the 2012 review were somewhat comparable, there were significant differences in terms of methodology and definitions. Across the music industry, definitions of boundaries are unclear: in some countries, music export is considered to include food and beverages sold at a concert, whereas income created by an artist residing abroad is not automatically received in their home country.

Is it worth pruning a growing tree?

At the moment, the Finnish music industry’s greatest concern is the newly formed government’s budget-cutting plans, which threaten to withdraw the export project subsidies currently provided by the Ministry of Employment and the Economy. These subsidies have undoubtedly contributed to the growth of music export.

According to Natalia Härkin, Senior Inspector at the Ministry of Employment and the Economy, helping businesses to become international continues to be an important mission for the Ministry. A growth programme titled Team Finland was implemented in autumn 2014, with creative industries being one of its target areas.

“The music industry has been one of the relatively few sectors whose export figures have grown over recent years. Their export activities have become immensely more professional and methodical compared to the period around the turn of the millennium. They have also created new income streams, and we are expecting a particularly positive development from the opportunities created through digitisation, as well as song export,” Härkin says, outlining the strengths of the music industry.

What does the future look like for music export? While it was not the aim of the report to make predictions, it does refer to another report published by Teosto (Finnish Composers’ Copyright Society) which predicts a tenfold increase in the turnover of music-related internet and application-based services during 2015 alone.

“There is definitely a clear growth potential across the application sector. And the industry may still experience a more rapid growth spurt due to just a few great success stories,” says Jari Muikku.

Translation: Hanna-Mari Latham

Sources:
Jari Muikku (2015). Suomalaisen musiikkiviennin markkina-arvo ja -rakenne 2013–2014. Music Finland (http://musicfinland.fi/fi/palvelut/tutkimukset)
Håkon Kavli, Øystein Lorvik Nilsen & Jon Martin Sjøvold (2015). Musikk i tall 2013. Norsk kulturråd / Arts Council Norway.
(www.kulturradet.fi/no)
Rambøll (2014). Pre-study on music statistics. Comparability of current data. NOMEX
(nordicmusicexport.com)
Musiikkialan startupit Suomessa 2014 (2015). Teosto.
(www.teosto.fi)