Written by Michael Cass
The music industry, from the megastars you know to the mostly anonymous people writing their songs, tuning their guitars and driving their buses, has a $9.65 billion annual economic impact on the Nashville region, according to a study to be released Monday.
The study, conducted by the Nashville Area Chamber of Commerce and expected to be released by Mayor Karl Dean's office, found there are 4.19 times as many music industry jobs in Nashville, relative to its size, as there are in the nation as a whole - more than the combined rates of Los Angeles (1.61), New York (1.13) and Austin, Texas (1.39).
The 27,000 jobs directly supported by the industry and the additional 29,000 with indirect ties to it account for more than $3.2 billion in income, the report says.
"The music business is such an important part of the city's identity and its economy that having concrete information about its true impact is important to us," Dean said in an interview.
The numbers are significantly higher than those Belmont University and chamber researchers found in a 2006 study, which said the industry had a $6.4 billion economic impact and directly supported 19,000 jobs. Dean and other officials said the chamber's review was more comprehensive this time around.
But that growth hasn't been without challenges.
The Nashville-based International Bluegrass Music Association is moving its annual, multi-day "World of Bluegrass" events from Music City, where they spent the past eight years, to Raleigh, N.C., for its 2013 through 2015 editions. The National Folk Festival, which had planned to be here for three years, folded up its tents after just one year of free music, dance, storytelling and other offerings.
The music industry also has changed in fundamental ways that have made it tougher for recording artists and songwriters alike to get their piece of the pie. The digital revolution, by allowing fans to cherry-pick songs for $1.29 each from iTunes or simply listen for free on Spotify or Pandora, has upended the album as the main vehicle for delivering music, which has significantly reduced sales and royalty numbers.
"If all people do now is go get the hit single and not that track 7 (on an album), that has a particularly hard impact on the pure songwriter," said Christopher Bavitz, managing director of the Cyberlaw Clinic at Harvard Law School and a former senior director of legal affairs for EMI Music North America. "Nashville is one of the few places in this country where the pure songwriter has continued to be able to make a living, at least up until recent years."
"I'm no economics guru, but I think there will always be hit songs," Country Music Hall of Fame songwriter Bobby Braddock said. "With the demise of the CD, the business is just moving in the direction of being very singles-oriented, sort of like it was in the '50s."
The changes also have wreaked havoc on record labels, which have consolidated, merged and laid off many employees as they grasped for ways to stop the financial bleeding.
But Dean and others said they still see plenty of possibilities for Nashville to build on its large music business foundation.
The chamber study says the industry's economic impact could double by 2025 if Nashville becomes more of a "global media city." Dean, who will leave office in about two years, distanced himself from that idea, saying it's not a goal.
The mayor also tried to lower expectations by saying that it's not imperative for Nashville to lure "THE headquarters" of international or national record labels, some of which already have hubs here, especially in the country and Christian markets.
"You've got to acknowledge the financial impact of New York and Los Angeles and the history that's developed there," he said.
He said performance rights giant BMI, which moved many of its operations here in the 1990s, is a model of what the city can do. He acknowledged wooing some companies to make similar moves during multiple visits to their headquarters over the past five years.
"A lot of it just takes time," Dean said, declining to name his targets. "Whether it all comes to fruition while I'm mayor or afterwards, I think it's a worthy endeavor. We don't have a specific goal. I think my job, and the chamber's job, is to create a city that has economic opportunity for our citizens and that is dynamic and has an expanding tax base."
He said he now can start using the new data to support his economic development pitches. He often travels with Randy Goodman, a longtime Music Row executive and the co-chairman, with Dean, of the Music City Music Council, which commissioned the study.
Goodman, who was president of Lyric Street Records when The Walt Disney Co. closed it in 2010, said Nashville can play to its strengths and some of the industry's weaknesses. With executives fretting about how to cut costs, the city can highlight its low costs of living and doing business.
"Everybody should be a target," Goodman said. "Let's go and have a conversation with them, because at least we need to tell the story."
Bavitz, who teaches a Harvard Law School class called "Music and Digital Media," said opportunities could be particularly ripe in the digital arena.
"It's not like music is going away," he said. "Is there still opportunity in the music business? I think there is. It's not going to be necessarily the major record companies and major publishers in the form that we've come to know them so well over the last 50 years."
Attracting new business can cost taxpayers, and the chamber study says the city needs to be ready to offer financial incentives, though it notes that the music industry "arose independently over many decades without overt government support or incentive. In fact, little of this was sought or given."
"Incentives can range from broad categories supporting all firms to venture capital and enterprise investment that promotes artists, technical staff and firms," the report says. "For the well-being of the city and region overall, favoring a sufficiently broad set of incentives can be desirable where a multi-sector creative set of industries is incentivized."
Dean, who has used incentives on a regular basis in negotiations with other types of companies, said he doesn't "go into a conversation with somebody and say, 'We're going to offer you X if you move to Nashville.' " Instead, he said, the idea is to show how rental rates and home prices compare with those in other cities companies might be considering.
"That's the main argument," he said.
The study also talks about making it easier to travel to and from the other three big music industry centers, New York, Los Angeles and London. Dean said a direct flight to San Francisco is needed, too.
City's songwriters earn some respect
Nashville's cultivation of its signature industry isn't as obvious as it might seem. Goodman said previous mayors seemed to take Music Row for granted, so they didn't give it anywhere near the type of attention Dean has.
Goodman said former city officials sometimes taunted him in meetings by asking, "Well, where are you going to go?"
"And I'm thinking, 'That's your answer?' " he said. "It was astounding sometimes."
Things have come a long way in the past 50 years. Songwriters, once seen as a quirky population for the powers that be to put up with, are now a group the city celebrates, veteran songwriter Chris Gantry said.
"In 1963, the city did not look kindly on these beautifully insane people who wrote staggering, honest works of art,"said Gantry, writer of "Dreams Of The Everyday Housewife" and many other notable songs. "Today, thank God, artists are elevated to regal artist stature. Back then, you were just a bug to get stepped on."