Central Iowas Music Economy

Dave Swenson
Department of Economics, Iowa State University
March 2014

Summary of Findings
CentralIowasmusiceconomywasevaluatedinthisreport.Themusiceconomywasdefinedasmusical
performanceorganizations,musicpromotions,independentmusicartists,musicstores,musicradio,
soundrecordingindustries,andmusicalinstrumentmanufacturing.ThecentralIowaeconomy
evaluatedincludesDallas,Guthrie,Madison,Polk,andWarrenCountythecountiesconstitutingthe
DesMoinesWestDesMoinesMetropolitanarea.
Asdefinedforthisstudy,centralIowasmusiceconomyisaprominentcomponentoftheregional
economy.
Theindustriesstudiedhad968jobholdersemployedbymusicindustryfirmswhoearned
$23.85millioninlaborincomein2013

Whenthatinformationwasenteredintoaninputoutputmodeloftheregionaleconomy,
CentralIowasmusicindustrysupported,whenaccountingforallmultipliereffects:

1,322totaljobsinthefivecountyregion,
$39.62millioninlaborincome,and
$65.81millioninregionalvalueadded,anumberthatisanalogoustoregionalgross
domesticproduct(GDP).
TheCentralIowaeconomyisimmense.Thereweremorethan415,000jobsintheregion,andthe
regionproducedover$46.1billioninoverallGDPin2013.Althoughthemusiceconomyisobviously
quitesmallincomparisontothewhole,itnonethelesscomprisesasubstantialfractionofthecreative,
artistic,andentertainmenteconomyandcontributesstronglytotheoverallqualityoflifeenjoyedinthe
region.
2

Introduction
DifferentelementsofIowasandcentralIowascreativeeconomyhavebeenanalyzedovertheyears,
themostrecentofwhichwereevaluationsofallBravofundedactivitiesandaseparateevaluationof
theDesMoinesOpera.Thepurposeofthosestudieswastodemonstratetheregionaleconomic
contributionofselectedculturaleventsandentertainmentvenuesinthemetropolitanarea.Thisshort
studylooksatahardtomeasuresubsetofthemetroseconomicvitality:theregionalmusiceconomy.
Itisinitiallydifficulttozeroinondefiningandlimitingdimensions.Firmsthatmakemoneyfrommusic
rangefrompromoters,restaurantsandbars,tomusicstoresandserviceprovidersthatrepairmusical
instruments.Forthisanalysis,itwasdeterminedthatthecentralIowamusicindustrywouldbelimited
totheelementsoftheeconomythatgeneratedincomefrompromoting,performing,orotherwise
distributingmusicintheregion.Thatconstrainedthemeasurementtothefollowingeconomicactivities
inthecentralIowaeconomy:
Table1
Musical performance organizations
Music promotions
Independent musical artists
Music stores
Music radio
Sound recording industries
Musical instrument manufacturing

Dininganddrinkingestablishments,whereanoticeableamountofmusicalactivitytakesplace,donot
producemusic
1
;rather,theyusemusicalperformancestoenticedininganddrinking.Thevalueofthe
musicalactivityismeasuredaspaymentstopromotersortotheactualmusicians.Genuinemusical
promotions,however,infactdo,bytheirorganizingactivities,generatemusicandmusicperformance
attendance;andthebulkoftheirgrosssalesarelinkedtomusicalproductions.For2013,forexample,
asTable2shows,justthreevenuesinthemetropolitanareaaccountedforover86,000attendees.
Grossticketsalesfromthosevenueswereimportantcomponentsofthebaselinevaluationofthe
regionsmusicindustry.

1
Ifdiningordrinkingestablishmentsinfactactasmusicalpromoters,itisnotpossibletosortoutthateconomic
activityfromtheircoreoperations.Ifentertainersarefromthelocalregion,paymentstothemshowupinour
analysisofindependentmusicalartists.Ifpaymentsaccruetooutofregionartists,thenallthatismissedarethe
profits(orlosses)bythosevenuesonthepromotion.
3

Table2
Major Central Iowa Music Venues
2013
Attendance
Iowa State Fair 52,013
80 / 35 15,720
Hoyt Sherman 18,586

Thereareotherelementsofgenuinemusicactivitythatareimpossibletoquantify.Forexample,there
aremanyindependentmusicteachers,butthereisnofeasiblewaytocountthosepeopleletalonethe
economicvalueoftheirwork.Thereare,ofcourse,manymusicandvoiceteachersaspartofthe
privateandpubliceducationsystemsinthemetropolitanregion,butthoseprofessionalsarerightly
classifiedaseducators,andtheproducttheyconveyistheabilitytoperformmusic.Thoseactivities
cannotbecounted,willynilly,aspartofthemusicindustryanymorethanadriverseducationteacher
couldbecountedaspartofthenationsautomobileindustry.Finally,musicisconsideredessentialfor
ballet,otherdance,andforstagemusicals.Thosemusicalactivitiesarenotcountedinthisevaluationas
thereisnoreasonablewayinwhichtoapportionthemusicalcontributionortodeterminewhetheror
notthoseactivitieswerenotalreadycountedintheothercategories(i.e.,independentmusicians).
Arriving at Reasonable Baseline Estimates
ComponentsofimportantportionsofIowasmusicindustryhavebeenmeasuredinaperiodicsurvey
conductedbyBravo,theDesMoinesareaumbrellaorganizationthatprovidesfundingandsupportfor
areacultural,entertainment,andheritageorganizations.Thatsurveycontainsinformationabout
employment,payroll,totalexpenditures,andthenumberofvisitorstothosedifferentvenues.That
datasetprovidedverygooddataforthefollowingBravosupportedorganizationsthatarekeysuppliers
ofmusicalentertainmentinthemetro:

4

Table3
Des Moines Metro Opera
Des Moines Symphony
Des Moines Choral Society
Des Moines Community Orchestra
Des Moines Diversity Chorus
Des Moines Gay Men's Chorus
Des Moines Vocal Arts Ensemble
Greater Des Moines Music Coalition
Heartland Youth Choir
Iowa Youth Chorus
Music Under the Stars

Musicalperformersandmusicalpromotionsdatafortheregionwerederivedfromnationaldatafrom
theBureauofLaborStatistics(BLS)thatwerethenapportionedfirsttotheIowaeconomy,andthento
thecentralIowaeconomyonaprorata.Thosedatawereusedtodiscernboththenumberof
businessesandemployeesengagedinpromotionandperformance,aswell,separately,ofthenumber
ofoccupationsthatalignedwiththoseindustries.Retailmusicstoresdatawereobtainedfromthe
CountyBusinessPatternsdataforthemetropolitanareaandcalibratedinpartby2007CensusofRetail
datafromtheU.S.CommerceDepartment.Therearenoreliabledataonmusicalinstrumentrepair,
thoughitwasassumedthelionsshareofthatserviceishandledthroughareamusicstores.
MusicradioforcentralIowawasestimatedbyidentifyingthemajorarearadiostations,controllingfor
thosewithprimarilymusicalformats,andthenmeasuringmarketsharesasgaugedthroughArbitron
ratings.Thatevaluationdeterminedthatcloseto50percentofradiostationoutput(orlistenership)in
theregionwasprimarilythroughtheairingofmusic.
2
Again,theprimarycriteriaforinclusionwere
entitiesthatpromoted,performed,orproducedmusicaloutput;asmusicisthebasisforadvertising
support(orpublicunderwritinginthecaseofIowaPublicRadiosmusicprograms),thenthosemedia
outletswerecountedaspartoftheregionsmusicindustry.Thosevalueswerethenderivediteratively
fromemploymentandpayrolldatafromtheBLSforradiobroadcasting.
Finally,theBLScontainsinformationonsoundrecordingbusinessesintheregion.Itwasassumedfor
thisanalysisthatcapacitydealtwithmusicrecordinginthemain.Therewasalsoinformationinour
modelandfromtheBLSthatallowedustoinfertherewereatleast10musicalinstrument
manufacturingjobsintheregion.

2
Itmayappearthattheinclusionofmusicradioandtheexclusionofdininganddrinkingvenuesthatsponsor
musicisarbitrary,buttheargumentforinclusionisthatbutforthemusicalprogramming,thoseradiostations
wouldnothavethelistenershiporthesponsorship(oradvertising)thatunderwritestheirbusinesses.Wereitnot
formusic,thestationwouldhavenorevenue;thesamecannotbesaidfordininganddrinkingestablishments.
5

Table4containstheinitialestimateofthesizeofthecentralIowamusicindustrybeforeconsideringall
multipliedthroughlinkages.Themajormusicproducing,performing,orsupportingindustriesinthe
regionareestimatedtohavesupported968jobsand$23.85millioninlaborincomepaymentstoall
employeesinthoseindustries.
Table4
Initial Economic Values Employment Labor Income
Musical Performance & Promotion 610 7,267,778
Music Stores 224 6,018,271
Music Radio 103 8,412,935
Sound Recording 21 1,549,709
Musical Instrument Manufacturing 10 601,333
Total 968 $ 23,850,026

Thesedatawereusedtoinitiallyshocktheappropriaterespectivesectorsinaninputoutputmodelof
thecentralIowaeconomytodeterminethepotentialtotaleconomiccontributionoftheseindustriesto
theareaeconomy.
Economic Analysis Foundations and Results
Theregionaleconomiccontributionofthemusicindustrywasestimatedusinganinputoutputmodelof
thecentralIowaeconomy.Inthesubsequenttablestherewillbefourtypesofeconomicoutcomes
described.Thefirstisindustrialoutput,whichisthevalueofproductionoverthecourseofayear.For
themusicindustryofcentralIowaestimatedannualexpendituresareusedasanapproximationofthe
outputvalueofthecenter.Valueaddedisthenextindicator,anditiscomposedofthewagesand
salariespaidtoworkers,theirbenefits,returnstomanagementpaidtoproprietors,investment
incomes,andallindirecttaxesthatarepartoftheproductionprocess.Valueaddedisthesamethingas
GrossDomesticProduct(GDP),whichisthepreferredmeasureofeconomicactivityonanannualbasis.
Laborincomeisasubsetofvalueadded.Itiscomposedofwagesandsalaries,employeebenefits,plus
proprietorsincomes.Thelasteconomicoutcomeisjobs.Jobsincludebothfulltimeandparttime
workers,andtherearealwaysmorejobsinaneconomythanemployedpersonsasmanypeoplehold
morethanonejob.Inthemodelingprocess,jobsaretheannualizedjobvalueforaparticularindustry.
So,ifanorganizationseasonallyhires100personsforashortperiodofemployment,thatvaluemight
bereducedto10personsorevenfeweronanannualizedbasisforthepurposesofmodeling.
Therearefourlevelsofeconomicactivityreported,aswell.Directactivitiesrefertotheactualindustry
orindustriesthatweareinitiallymeasuring;herethatisthemusicindustryofcentralIowaandthe
valuesalignwithfiguresdisplayedaboveinTable4.Indirectactivitymeasuresthesumofinputs
requiredbythedirectfirms,toincludeallgoodsandservicesrequiredtooperatetheirbusinessesor
services.Whenworkersinthedirectfirmsandtheindirectfirmsconverttheirincomesintohousehold
6

spending,theyinduceafinalroundofeconomicactivitytomeethouseholdneeds.Thesumofdirect,
indirect,andinducedactivityconstitutesthetotaleconomicactivityassociatedwithaparticulartypeof
industrialevaluation.
The Findings
Table5containstheregionaleconomiccontributionsofthecombinedmusicalperformance,which
includesindependentartistsandmusicorganizations,andthepromotionsectors.For2013itwas
projectedthatcombinedsectorhad$30.5millioninoutput,whichrequired610jobsearning$7.3
millioninlaborincomes.Thoseperformersandpromotersrequired$9.43millionininputsfromthe
centralIowaeconomy,whichinturnsupported86jobsmaking$3.7millioninlaborincomes.Whenthe
directandindirectjobholdersconvertedtheirearningsintohouseholdspending,theyinducedanother
$7.54millioninregionaloutputand$2.71millioninlaborincomestoanother60jobholders.
Combined,thissectorexplained$47.54millioninregionaloutput,$27.7millioninvalueadded(orGDP),
ofwhich$13.68millionwaslaborincomepaidto755jobholders.
Table5
Musical Performance & Promotion Economic Contributions
Impact Type Employment Labor Income Value Added Output
Direct 610 $7,267,778 $16,788,431 $30,461,873
Indirect 86 $3,704,001 $5,995,012 $9,425,832
Induced 60 $2,708,955 $4,876,463 $7,648,646
Total 755 $13,680,734 $27,659,906 $47,536,351

Table6containstheestimatesforregionalmusicstores.Inall,thosestoreshad$11.97millionin
regionaloutput
3
,whichrequired224jobholdersmaking$6.02millioninlaborincome.Thosestores
required$3.04millionininputsfromtheareaeconomy,whichpaidout$1.11millioninlaborincometo
21morejobs.Whenthedirectandtheindirectworkersspenttheirlaborincomes,theyinduced$4.98
millioninadditionaloutputintheregion,whichsupported39morejobsand$1.76millioninlabor
income.Summed,themusicstoresexplained$19.99millioninregionaloutput,$14.1millionofvalue
added,and$8.89millioninlaborincomereceivedby284jobholders.
Table6
Music Stores Economic Contributions
Impact Type Employment Labor Income Value Added Output
Direct 224 $ 6,018,271 $ 8,914,789 $ 11,969,473
Indirect 21 $ 1,112,594 $ 2,014,448 $ 3,042,574
Induced 39 $ 1,762,444 $ 3,173,406 $ 4,976,598
Total 284 $ 8,893,308 $ 14,102,643 $ 19,988,645

3
Retailoutputisnotthesameasgrosssalesatthecashregister.Ininputoutputaccounting,thetotalcostsofthe
goodssold(includingwholesalemarkupsandtransportcosts)arenotcountedasoutput.Thosetransactionsare
apportionedtothesectorsortheregioninwhichtheyoccurred.Onlytheretailersmargins(overhead,labor,etc.)
arecountedasoutput.
7

Table7displaysthecombinedmusicradio,soundrecording,andinstrumentmakingcontributions.Just
thetotalswillbeconveyed.Inall,thoseentitiesincentralIowaaccountedfor$42.6millioninoutput,
$24.05millioninvalueadded,$17.1millioninlaborincome,and283jobs.
Table7
Music Radio, Instrument Manufacturing, and Sound Recording Economic Contributions
Impact Type Employment Labor Income Value Added Output
Direct 132 $ 10,563,977 $ 13,408,155 $ 24,139,697
Indirect 77 $ 3,109,010 $ 4,563,843 $ 8,919,693
Induced 74 $ 3,377,134 $ 6,077,331 $ 9,533,130
Total 283 $ 17,050,121 $ 24,049,329 $ 42,592,520

Table8sumsalloftheprecedingvalueswithfullrecognitionthattherewillstillbeaminoramountof
doublecounting
4
.Inall,thesectorschosenforanalysisexplained$110.12millionincentralIowatotal
industrialoutput,$65.8millioninvalueadded(orGDP),ofwhich$39.6millionwasintheformoflabor
incomepaidto1,322jobholders.
Table8
All Music Sectors Economic Contributions
Impact Type Employment Labor Income Value Added Output
Total 1,322 39,624,163 65,811,878 110,117,516

Summary
Thephraseeconomiccontributionhasbeenused,notthephraseeconomicimpact.Thevast
majorityofmusicalproductionandothermusicalperformancesorperformersintheregionserve
regionalaudiences.Accordingly,itrepresentsentertainmentorpersonalfulfillmentspendingthat
wouldhaveoccurrednonethelessintheregionaleconomy.Eventslikethegrandstandshowsatthe
IowaStateFairor80/35willbothdrawfrombeyondtheprimarymetropolitanarea,butthereisno
reliableestimateofoutofregionvisitorshipineithercase,sothebestthatcanbesaidasthataminority
fractionofthosesaleslikelyaccruedtononregionresidents.

4
Aftereachitemizedcomponentwascomputed,Imanuallysubtractedelementsthatwouldhavebeendouble
counted.Forexample,Isubtractedindependentartistpurchasesfromthemusicalorganizationssothatthose
regionallysuppliedinputswerenotcountedtwice.Thatadjustmentdoesnoteliminatealloftheduplicative
transactions;itdoes,however,eliminatethebulkofthem.