Memphis music sings sweet tunes to local economy.

The national and international visions of Memphis are defined by the city's musical heritage. Ask people outside the Mid-South what they know about Memphis, and they will tell you about Memphis music. They may not know that Memphis is the home of Federal Express, Promus Hotel Corporation, or AutoZone, but they will know about Elvis, Beale Street, and the Blues.

Nashville is a classic example of music as a determinant of the public's image of a city. Few people outside Nashville could name any of its major employers or sports teams, but they do know that it is the home of country music. Unlike other industries, music can and does define what the city is to the world.

Two studies conducted by the Bureau of Business and Economic Research (BBER) at The University of Memphis are Featured in this article and will describe some of the economic aspects of the music industry and its resulting influence on the Memphis community. The first study is an analysis of a music-oriented special event, the Memphis in May Music Festival, and the second is an analysis of a cultural event, the Titanic Exhibit.

The Value of Economics and the Arts

Any article written by all economist about music or the arts should begin with a basic, but essential, disclaimer. The "value" of music and art is not synonymous with their "economic value." Artistic and musical values extend far beyond the ability of economists to quantify the simplistic benefits of employment and income opportunities generated by the industry. Some music and art has limited economic value but can, in general, hold great societal value. Judgments about the value of many activities cannot be (nor are they intended to be) determined by economic measures. But, these measures can provide some insight into the economic aspects of an industry.

The beneficial impact of tourism on the Memphis economy is undeniable. In every case, special events that attract tourists and generate local spending and employment frequently demonstrate positive benefits that offset event costs. Local events may add to the quality of life in Memphis and may provide improved choices for consumers, but tourists inject new dollars into the Memphis economy. Tourism tends to be a "clean industry" which supports local events and benefits the entire Memphis community.

Music-related attractions like the Beale Street Historic District, Graceland, and Memphis in May, to name a few, are major tourist attractions. The Beale Street Historic District attracted more than three million people in 1996 and has certainly continued its growth since that time. Two Beale Street businesses, B.B. King's Blues Club and the Rum Boogie Cafe, attracted an estimated 225,000 and 220,000 people, respectively, in 1996. In that same year, Graceland reported that its admissions totaled over 700,000 people, while the Memphis in May International Festival attracted approximately 500,000 people. Although only a portion of the people who attend an event or attraction are tourists, Memphis music is obviously one activity that tourists enjoy. In spite of the disappointments in the commercial music scene, thousands of people are involved with the other aspects of the music industry, and Memphis music is alive and well. Among the many for-profit, music-related businesses are the following Standard Industrial Classifications: SiC Code Industry Classification 2741 Music, sheet: publishing and printing, or publishing

only - mfg 3999 Musical Chests - mfg 3931 Musical instrument accessories: e.g., reeds,

mouthpieces, stands, traps - mfg 3651 Musical instrument amplifiers - mfg 3161 Musical instrument cases - mfg 7699 Musical instrument repair shops 5932 Musical instrument stores, second hand - retail 5736 Musical instrument stores - retail 3931 Musical instruments, including electric and electronic

- mfg 3944 Musical instruments, toy - mfg 5099 Musical instruments - wholesale 7929 Musicians 3651 Recording machines, music and speech: except dictation

and telephone answering machines - mfg 7389 Recording studios on a contract or fee basis 3652 Records, phonographs - mfg 8999 Music arrangers 2732 Music books: printing or printing and binding, not

publishing - mfg 2731 Music books: publishing and printing, or publishing only 3999 Music boxes - mfg 3651 Music distribution apparatus, except records or

tapes - mfg 7993 Music distribution systems, coin-operated 7389 Music distribution systems, except coin-operated 6794 Music licensing to radio stations 3931 Music rolls, perforated - mfq 6794 Music royalties, sheet and record 8299 Music schools 3931 Music stands - mfg 7812 Music video production 2759 Music, sheet: except lithographed or gravure

(not publishing) - mfg 2754 Music, sheet: gravure printing (not publishing) - mfq 2782 Record albums - mfg 3652 Record blanks, phonograph - mfg 5961 Record clubs, mail-order - retail 5735 Record stores - retail 3651 Recorders, home tape: cassette, cartridge, and reel - mfg 3825 Recorders, oscillographic - mfg 3572 Recorders, tape: for computers - mfg 3679 Recording and playback heads, magnetic - mfg 5084 Recording instruments and accessories - wholesale 3679 Recording heads for speech and musical equipment - mfg 7922 Agents and managers for entertainers 8999 Song writers

Every event and component of the music industry has an impact on our economy. Musical events which attract consumers (whether local or not) do so because private costs or prices are less than or equal to individual benefits. When public externalities become important, public subsidies can be justified to support otherwise private activities. Memphis in May and the Wonders Series are two examples of public/private initiatives in Memphis that periodically require public support.

When the public invests tax dollars in events, several things should happen. First, the size of the subsidy should not exceed the external benefits generated by the events. Second, the benefits that could be derived from alternative uses of the money should be considered. Finally, individual consumers should support the events whenever possible since the decisions of consumers reflect the value they place on an event.

But, one should keep in mind that like commercial music, special events are only one part of the Memphis music industry. Music is a basic part of the economic structure of the community. Commercial music studios, producers, promoters, bands, lawyers, singers, musicians, retail establishments, teachers, professors, and others form parts of the complex fabric of the music industry in the city. Music would form an important part of the Memphis economy even in the absence of special music events and major recording studios.

It should be noted that Memphis singers, musicians, recording studios, and the commercial side of the music industry have struggled for decades in Memphis. In a series of articles in the April 30,1998, The Memphis Flyer, the trials of local bands, singers, musicians, song writers, producers, and promoters trying to make it to the top sound a lot like justification for developing a '90s' version of the Memphis Blues.

How Big Is the Music Industry?

No detailed data on the size of the music industry exist for Memphis or, in fact, anywhere. Detailed information about the industry is difficult to collect because music is a product that is frequently consumed with other goods; it involves small, privately-held business enterprises and frequently generates part-time, self-employed performers who are paid with cash.

Major record producers, manufacturers, special events, and attractions are large enough to invite individual analysis. Beale Street, the Gibson Guitar Complex, the Memphis in May Music Festival, and Graceland are local examples of large organizations that could be analyzed separately. But, most studies of the impact of the arts have included music as one of the components of a broader list of non-profit organizations that were researched. Even in those studies, the absence of complete survey data complicates the analysis, especially for sub-components like music.

The Bureau of Business and Economic Research estimates that one or two million people across the nation are directly employed in the music industry. That estimate includes over 250,000 musicians, conductors, and directors; 13,000 producing musical instruments; 78,000 employed in record stores; 25,000 in music stores; and over 150,000 entertainers and related employees. Employment in many other music-related SIC codes is concealed in broader industrial categories.

If two percent of all Memphis employees were in music-related fields, the music industry would support approximately 11,000 jobs in Memphis. Many other jobs in complementary industries like retail trade, food and beverages, and hotels would also be supported by the music industry. Obviously, the success of the music industry is a monumental concern to the Memphis community. Helping Memphis music prosper is synonymous with helping the city prosper.

Economic Impact Methodology