7 Methodology

7.1 Who Is A Music Professional?

The fragmentation of the music business into microenterprises and freelance carriers make the work of a musician very complex. Most musicians do not only fulfill the artistic role of a performer, composer, lyricist or composer. In most cases, artists perform two artistic roles, but it is equally frequent that they perform a different, but still music related engineering, educator or managerial role. Given that that average size of creative enterprises in Europe is less than two people, musicians are forced to do several very different things. In the 20th century, larger companies, especially record labels had the necessary marketing, management, engineering staff to take care of this issues, but in the 21st century most musicians need to master all of these skills to a certain extent – at least to the extent that they can hire other, mainly freelance music professionals to help them out.

The reason why official labor statistics and economic statistics do not capture the performance of the music business well is that the classification of economic statistics dates to the 1960s. Two key elements of a popular musician’s work, live performances and sound recordings are in different economic classes. Composer-performers, the typical musicians of popular music do not fit into this categorization. Adding to this complexity the frequent presence of other artistic, technical, managerial or educational functions makes a musician’s work hard to categorize.

The complexity of musician’s work makes professional training very challenging, too. Popular music throughout the world is mainly learned in informal settings. However, this is not the ideal setting to learn the necessary managerial, economic, legal and other skills that are necessary to fulfil the freelance job of a professional musician.

7.2 The Three Income Stream Model of the Music Industry

The three income streams model is essentially a value chain based model that was developed in the United States (Hull et al. 2011) and adopted by the European Commission’s Joint Research Center for European CCI policy purposes (Leurdijk and Ottilie 2012). We made minor adaptations in the three income model for applicability in less developed markets in Central and Eastern Europe.

While in the original American model sound recordings are the “main” income stream, currently, especially in Central Europe the live performance stream earns the most income for a typical musician. The author’s stream is the oldest, traditionally and analytically first part of the music industry that includes revenue streams based on musical works exploited by music publishers and via author’s CMO societies such as SOZA in Slovakia, OSA in Czechia or Artisjus in Hungary. In the US it is called the publishing stream, but in Central Europe it is dominated by authors’ societies, so we modified the label.

The Thee Income Streams

Figure 7.1: The Thee Income Streams

The music industry became divided in 1909 when the U.S. Supreme Court denied copyright protection for phonographic rolls. The phonographic industry which changed from rolls to record plates and later to CDs and digital albums sought intellectual property protection in the form of neighbouring rights. The exploitation of neighbouring rights creates separate revenue streams for record publishes and self-published musicians. From the 1930s the recording industry far surpassed the music publishing business worldwide and became the dominant revenue source for the whole industry till the 2000s.

In the 2010s the live performance stream creates the most revenues in many developed and emerging markets, and it is especially important in Central Europe. The live performance stream has an exceptionally strong input to employment, given that live performances create jobs in transportation, in the venues and the connecting accommodation, food and beverages industries, where many enterprises cannot serve their clients without live or recorded music. Food and beverage services are itself second largest European employer after construction and its tourism-related segment is also a large service exporter. Unlike the other two streams, live performances do not receive but pay musical royalties to the authors. Neighbouring rights are not involved unless the live performances are recorded and published in audio or audiovisual recordings.

7.3 What is CEEMID

CEEMID (Central and Eastern European Music Industry Databases) was created out of necessity following a CISAC Good Governance Seminar for European Societies in 2013. The adoption of European single market and copyright rules, and the increased activity of competition authority and regulators required a more structured approach to set collective royalty and compensations tariffs in the region.

In 2014 three societies, SOZA, Artisjus and HDS realized that need to make further efforts to modernize the way they measure their own economic impact, the economic value of their licenses to remain competitive in advocating the interests Vis-à-vis domestic governments, international organizations like CISAC and GESAC and the European Union. They signed a Memorandum of Understanding with their consultant to set up the CEEMID databases and to harmonize their efforts (Artisjus et al. 2014).

CEEMID by designed aimed to follow the best European practices on statistical harmonization and was already featured as an innovative best practice in the 40th anniversary of Pan European Surveying seminar in 2015. As an initiative born out of necessity, it aimed fill in the gaps of underdeveloped official cultural statics by following the guidelines of Eurostat’s ESSNet (Antal 2015).

From the originally envisioned, centralized, permission-based data structure, due to practical considerations, CEEMID switched to a more flexible, decentralized approach. This approach is based on continuous data integration, which requires permissions to use business confidential information only in use. This allowed a rapid extension of CEEMID to the whole of Europe and go even beyond. As a result of continous data integration it already includes hundreds of indicators foreseen in all pillars of the planned European Music Observatory.

CEEMID works together with music granting agencies, music export offices and collective management societies to reach a representative segment of all professional, semi-professional and amateur artists in the countries covered: Hungary, Slovakia and Croatia, which will be extended this year to Armenia, Austria, Bulgaria, Czechia, Estonia, Lithuania, Poland, Serbia and Slovenia.

7.3.1 Data sources of CEEMID

  • Nationally representative Cultural Access and Participation surveys of music users and film viewers.

  • Anonymous CEEMID Music Professional Surveys and CEEMID Audiovisual Professional Surveys about their work, incomes and costs. See example blog post.

  • Big data sources from various geolocational applications about events and location visits small video.

  • Automatic data retrieval from open data sources, including statistical data and EU-funded research. See example blog post.

While CEEMID is aware of and uses the metadata of CISAC’s, IFPI’s, EAO’s, and other industry sources’ data, it does not contain this data, only when a user with permission for the use of these industry sources requires the integration of such data with other CEEMID data, or user-specific data. While this approach makes sharing results more cumbersome, it provided a path to increase the number of useful indicators from a few dozens to around a thousand. Furthermore, it exponentially increases the value of CISAC’s, IFPI’s or EAO’s data, especially when designing better royalty rates, or creating economic evidence for litigation. Take a look at a simple, non-confidential example blog post.

References

Antal, Dániel. 2015. “Creating Better National Cultural Statistics with Eurobarometer Datasets and ESSNet-Culture Technical Recommendations.” Köln:Germany. http://www.gesis.org/fileadmin/upload/events/EB-Symposium/Poster/Antal_Poster.pdf.

Artisjus, HDS, SOZA, and Candole Partners. 2014. “Measuring and Reporting Regional Economic Value Added, National Income and Employment by the Music Industry in a Creative Industries Perspective. Memorandum of Understanding to Create a Regional Music Database to Support Professional National Reporting, Economic Valuation and a Regional Music Study.”

Hull, Geoffrey P., Thomas W. Hutchison, Richard Strasser, and Geoffrey P. Hull. 2011. The Music Business and Recording Industry Delivering Music in the 21st Century. New York: Routledge. http://search.ebscohost.com/login.aspx?direct=true&scope=site&db=nlebk&db=nlabk&AN=345262.

Leurdijk, Adnra, and Nieuwenhuis Ottilie. 2012. “Statistical, Ecosystems and Competitiveness Analysis of the Media and Content Industries. The Music Industry.” 25277 EN. Edited by Jean Paul Simon. Luxembourg: Publications Office of the European Union, 2012: Joint Research Centre Institute for Prospective Technological Studies (IPTS). http://ftp.jrc.es/EURdoc/JRC69816.pdf.