ArtsWatch: The Arts' Economic And Social Impact

New research demonstrates the financial heft of arts sectors
May 02, 2011 -- 7:32 am PDT
By Philip Merrill /

The Recording Academy actively represents the music community on such issues as intellectual property rights, music piracy, archiving and preservation, and censorship concerns. In pursuing its commitment to addressing these and other issues, The Recording Academy undertakes a variety of national initiatives. ArtsWatch is a key part of an agenda aimed at raising public awareness of and support for the rights of artists. To become more involved, visit Advocacy Action @ and sign up for Advocacy Action E-lerts.

On April 28 the National Endowment for the Arts released its report "Time And Money: Using Federal Data To Measure The Value Of Performing Arts Activities" — a thought-provoking compilation of statistics covering arts organizations' budgets and revenues, consumer spending and time use, and state-of-the-art directions for future research such as value-added and quality-of-life measures. The report also teased an upcoming study of the value added by cultural industries. NEA Chairman Rocco Landesman said, "Beyond the economic fact that the arts generate significant revenue, the arts are a shared, social activity, and that's something that enhances the civic life of our communities." The report was released during the April 27–29 National Mayor's Summit on City Design in Chicago, a gathering of mayors and design professionals centering around the work of the Mayors' Institute on City Design — a partnership between the American Architectural Foundation, National Endowment for the Arts and the United States Conference of Mayors. In the past, intellectual property economic impact studies have been a feature of antipiracy arguments, evidenced by studies prepared by Economists Inc. Principal Stephen E. Siwek. This NEA study and two others described below suggest the statistical conversation can be expanded from the harms of antipiracy to the arts' many benefits and opportunities.

The city of San Diego Commission for Arts and Culture and Mayor Jerry Sanders presented a report on April 7 detailing how 70 arts and cultural organizations receiving support from the city provided "significant return on investment by positively impacting our economic and community vitality" in 2010. Sanders said, "Every investment we make in the arts today has a lasting benefit to our economy and the other bottom line: our quality of life." According to the report, the 70 organizations that received $6.4 million from hotel room taxes spent $173 million, have more than 7,000 employees and produced events that were attended by 1.48 million San Diego visitors.

On April 25 Georgia Music Partners released its sponsored study, "Economic And Fiscal Impact Analysis Of The Music Industry In Georgia" estimating the multiplier effect caused by resources "brought into the state by the music industry." Based on 2009 data, the executive summary estimated the music industry in Georgia supports almost $3.8 billion in economic output, compensates 19,955 employees with more than $888 million in salaries and benefits, and that resulting revenues to state and local governments total more than $313 million. A 501(c)(6) not-for-profit organization, GMP was formed in 2010 to ensure that state economic development programs and tax incentives appropriately address the distinctive characteristics and needs of Georgia's music community. The organization's leadership includes Recording Academy Atlanta Chapter President Tammy Hurt, Chapter member Simon Horrocks, and Senior Executive Director Michele Rhea Caplinger.

The RIAA launched its new and improved website on April 25. The redesigned home page features expanded resources including a guide to legal music services and blogs, a prominent display of recent gold- and platinum-certified recordings and a refined certified recordings search engine producing results that include click-to-buy links to Amazon and iTunes.

On April 26 U.S. Immigration and Customs Enforcement reported that 120 piracy-friendly websites have been seized by ICE's Operation In Our Sites program and administrative forfeiture has been completed for 65 domains. These sites now host a public service announcement, raising awareness that free downloading costs real people their jobs. Since Operation In Our Sites was launched in June of last year, the formerly infringing Web addresses have received 45 million hits — a significant and targeted educational opportunity to spread this antipiracy message.

For the first time SoundExchange has caused a Web radio station — SWCast Network — to be shut down by its Internet service provider for failure to pay online royalties dating back to 2005. The site was shuttered on April 17, and to resume service SWCast must pay $300,000 plus late fees.

Online music video platform Vevo launched in the United Kingdom on April 25. UK users are now able to access content via or Vevo Mobile, which is compatible with Google's Android and Apple's iPhone and iPad. Efforts to license Vevo in more countries are underway and additional foreign launches are anticipated by the end of 2011.

Britain's graduated-response Digital Economy Act should start being written into actual regulations soon since High Court Justice Kenneth Parker ruled against a majority of Internet service providers' protests on April 20. The lone claim upheld was the act's imposition on ISPs for a portion of the administrative costs involved in notifying customers accused of infringement. This provision is expected to be excluded from forthcoming regulations. Justice Parker said, "The Digital Economy Act proceeds on the premise, first, that a significant number of infringers do not at the moment fully appreciate that what they are doing seriously infringes the legal and moral rights of others and that, although individual behavior of this kind may seem trivial and excusable, the general effect may well be very damaging to the creative industries, a notorious example of what is sometimes called the tyranny of small decisions that have ruinous economic consequences."


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