Music: A billion-dollar industry for Detroit

DETROIT, Aug. 30, 2013 /PRNewswire/ -- Everyone knows that Detroit has a musical heritage. But does everyone know how much music business is done in metro Detroit? A unique study puts that value at $1.15 billion.

The study, created by Anderson Economic Group for Crain's Detroit Business, came from a deep dive into the nuts and bolts of the business of music.

Some conclusions:

• Over 7,000 people employed in the local industry, including about 6,000 people at specific business establishments.
• Earnings over $170 million, including $162.5 million at business establishments and $8 million for performers at other establishments such as bars and restaurants, in 2012
• The average worker bringing in roughly $27,000 a year, for workers at music industry establishments.
• The number of establishments in the industry came out to be 486, with an average of 12 workers per establishment; plus over 400 bars, restaurants, and other businesses that feature musical performances.
• Total industry revenue of $1.15 billion, including record sales and gate revenues from entertainment venues.

"As far as I know, this is the only serious study of the employment and earnings in Michigan's music industry," said Patrick Anderson, CEO of AEG. "Music is a part of our culture, but it's also big business in Detroit."

A story about the study is published in the special report on the business of music in the Sept. 2 issue of Crain's Detroit Business. The full report is also available on the Anderson Economic Group website at www.andersoneconomicgroup.com.

Anderson will present the study results in person at the Crain's SoundBiz Music Conference Sept. 26 at Cobo Center. To register to go www.crainsdetroit.com/soundbiz.

Crain's chose Anderson as a partner on the project because of the firm's longstanding track record of impactful economic studies, said Daniel Duggan, managing editor of custom and special projects for Crain's, who managed the music project.

"Anderson Economic Group has made a name for itself when it comes to economic studies," he said. "They have a solid track record, and their studies are highly regarded."

Anderson and his staff spent three months looking at  data from various sources such as County Business Patterns data from the US Census Bureau, demographic and business  data from ESRI, and occupational data from the Bureau of Labor Statistics. They identified specific industry and occupation codes for their definition of music industry, and compared metro Detroit to cities of similar size, most of them in the Midwest.

The team also surveyed over 200 bars and restaurants that host live music, as well as talked with artists and business owners.

Businesses were split in the study into 11 categories based on employment data. The biggest business category by employment size was by far the music venue category, with 3,500 workers, dwarfing the next highest category, schools, which had 800 employees. Music supply stores and the artists themselves were other categories with substantial representations. The Anderson consultants also estimated the number of artists that perform in the evenings and weekends, but have another "day job."

Detroit's music industry was at the top of the rankings for business share of total area earnings compared to the other cities studied -- Indianapolis, Minneapolis, Kansas City, Cleveland, Pittsburgh and Dallas -- with 0.20 percent, tied with Minneapolis and ahead of Indianapolis at 0.17 percent.

By share of total area employment, Detroit came in second at 0.37 percent, behind Minneapolis at 0.52 percent, with Pittsburgh practically tied with Detroit at 0.36 percent.

Other cities were in the range of 0.21-0.25 percent.

Anderson said the value of the industry to Detroit also includes the Detroit "brand" — something that's easy to forget about.

"Music is part of Detroit's brand. It's easy for us here in Michigan to forget, but if you go to Europe or Asia and have a Detroit D on your shirt, people recognize that Detroit brand recognition in a way that is often deeper than we expect."

The Crain's music report also has stories about the power of the Detroit brand for musicians and companies, a look at the future of automotive design as it relates to music as well as a "who's who" of the people in the region's music industry.

For more information about the study, visit the firm's web site: www.andersoneconomicgroup.com.

To read the stories from Crain's or to register for the SoundBiz Conference, go to www.crainsdetroit.com/music

Editors and reporters from Crain's as well as executives from Anderson are available for interviews.

SOURCE Crain's Detroit Business

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