Economic impact of the music industry in Memphis and Shelby County.
Publication: Business Perspectives
Date: Wednesday, September 22 2004
As the widely proclaimed "Home of the Blues" and The "Birthplace of Rock 'n' Roll,' music traditions run deep in the soul of Memphis. From Elvis and Graceland to gospel to grunge and garage bands, the great diversity of music in Memphis creates strength and sustainability for the music industry.
Unfortunately, the Memphis music industry has not benefitted from the growth experienced by the industry nationwide. Young musicians continue to find it difficult to generate professional opportunities in Memphis. Other cities like Nashville, Tennessee, and Austin, Texas, have cultivated a single genre that has met the demands of the marketplace. But, even Nashville and Austin are not free of difficulties associated with an excess supply of musicians with limited economic opportunities. The challenge facing the Memphis and Shelby County Music Commission, Memphis Tomorrow, and all of the music businesses and musicians in Memphis is to develop a growth strategy that can be successful in the highly competitive world of music entertainment.
Music Unites the Community
Music is an integral part of the social and economic fabric of the city. Many of the city's highest priority economic development plans are built upon initiatives to attract young, dynamic, high-income professionals to the area. The community's bio-tech and computer technology initiatives both require a young, highly-skilled, energetic workforce attracted by a critical mass of exciting entertainment, housing, and employment opportunities.
Community pride and social interaction take place around music-related events. Memphis in May, the Sunset Symphony, and the Beale Street Music Festival are events that unite the city and bring excitement to every spring. Thousands wait in anticipation for special events at the Peabody, the Orpheum, the Cannon Center, Shelby Farms, Memphis Botanic Garden, the Dixon Gallery and Gardens, the Pyramid, and Mud Island. Music is the entertainment medium that unites the ages, the races, and the communities of the Mid-South. Music stimulates the mind, builds community spirit, and creates the energy necessary to make Memphis an attractive place to live and work. Music is a part of our culture, our pride, and our economic future.
Music-Related Tourism
Music-related tourism is an important part of the Memphis economy. Tourists visit the Rock 'n' Roll Museum, Sun Studio, Stax Museum, Graceland, and other special places like the Memphis Zoo, Libertyland, the Pink Palace, and the Children's Museum of Memphis. Many of those tourists spend money at hotels, eating and drinking places, tourist attractions, special sports and entertainment events, gasoline stations, and shopping malls throughout the city. An estimated 4.2 million visitors go to the Beale Street Historic District each year.
Like Beale Street, many of Memphis' largest and best tourism attractions are directly related to the music traditions of Memphis. Graceland is estimated to have 700,000 visitors each year. Memphis in May, with the Beale Street Music Festival, the Sunset Symphony, and other music events, attracts 277,000 visitors each year. Over 300,000 people attend Orpheum Theater events each year, and most of those involve music. B. B. King's Blues Club on Beale Street attracts over 150,000 people each year and is only one venue in the Beale Street Entertainment District.
Other facilities use music to attract both tourists and local audiences. Mud Island River Park, Libertyland Amusement Park, Dixon Gallery and Gardens, Memphis Botanic Garden, and Shelby Farms are examples of venues that occasionally offer musical events to stimulate public support. Tourism is a major economic engine for the community, and music-related tourism is an important part of the future of the areas tourism industry.
Music Education
Music education forms an integral part of the music scene in Memphis. In terms of employment, Memphis City Schools employs 280 (135 secondary and 145 elementary) music teachers with an average annual salary of $44,357. Shelby County Schools employs 78 teachers (8 high school band teachers, 14 middle school band teachers, 7 high school choral teachers, 10 middle school choral teachers, and 39 K5 music teachers) with an average annual salary of $45,000. The total music-related instructional budget for both school systems is approximately $16.0 million (see Tables 1 and 2). Primary and secondary educational institutions in Memphis and Shelby County provide a key source of full-time jobs with benefits for musicians in the community. The income generated from teaching is a primary source of economic vitality for the local music industry.
Memphis is also home to five major institutions of higher education. These institutions are The University of Memphis, Southwest Tennessee Community College, LeMoyne-Owen College, Rhodes College, and Christian Brothers University. Together, these institutions provide employment for 65 full-time music faculty members and about 85 adjunct/part-time faculty members (see Table 3).
The Rudi E. Scheidt School of Music at The University of Memphis is the largest of the five institutions and accounts for 676 students. The Scheidt School has an annual budget of $5.8 million. The total music-related instructional budget for all institutions of higher education is $4.1 million. It must be noted that part-time/adjunct faculty members are usually paid by the number of hours they teach or by the number of students they teach, which means their average annual salary is low. Most part-time faculty have sources of income other than teaching at these schools.
Tunica Casinos Contribute to Memphis Tourism and Memphis Music
Tunica casinos use special musical events and regular bands to draw customers from the surrounding area. Music is an important part of the entertainment package provided for the gamblers at casinos in Tunica. Many of the musicians employed by the casinos are from Memphis and Shelby County. Data from these casinos were unavailable.
The estimated size and attendance at the casinos are shown in Table 4. Large casinos have an average daily attendance in excess of 11,000 and exceed 4.0 million visitors annually. Medium-sized casinos that have an average daily attendance in excess of 8,200 exceed 3.0 million visitors, while smaller casinos with fewer than 5,500 visitors each day serve 2.0 million visitors or less each year. It should be noted that many people who visit the casinos also visit Memphis attractions. Because Tunica lacks a complete set of supporting attractions, it depends on Memphis to provide entertainment and dining options for casino patrons.
Anecdotal information about the casino music segment of the Memphis music industry includes the following:
1. Most casinos have house bands that include five or six musicians.
2. The bands work five-hour shifts, and two bands are used each day.
3. On weekends, three bands are used to cover the period from 12:00 noon to approximately 5:00 a.m.
4. Musicians are paid daily at a standard rate of $115.00 per shift per person.
5. Pay rates are standardized by all casinos to avoid competition.
6. Approximately 50.0 percent of the musicians are from Memphis.
7. Casino bands are typically booked in three-month increments and may be rehired for additional periods.
8. Large casinos like the Grand and Sam's Town may employ two competing house bands on separate stages during peak periods of the day, on weekends, or for special holidays.
9. Most headliners and major bands have regular musicians who accompany them on tour. Some local musicians may be hired, but many are non-local.
It is easy to see that the casinos provide an important source of income for musicians and support staff from Memphis. The average earnings per band playing everyday would be $51,750.00 for three months. (1) Assuming that bands play in Tunica for six months a year, the earnings for each band would be $103,500.00. The average earnings per band member would be $20,700.00. Since each band is assumed to play only six months, the casinos would need 36 bands in total each year.
For the bands that play only on weekends, the average income would be $13,800.00 for three months. Assuming that these bands play six months a year in Tunica, their earnings would be $27,600.00. The average income for band members would be $5,520.00. Since each band is assumed to play only six months, the nine casinos would need 18 bands per year.
In total, it is estimated that the casinos spend a minimum of $4,222,800.00 per year for musicians. Of that total, approximately $2.1 million is paid to musicians from Memphis and Shelby County.
Memphis Music Industry
The music industry includes both non-profit organizations and for-profit enterprises. Detailed information about the industry is difficult to collect because music is a product that is frequently consumed with other goods, involves small, privately-held business enterprises, and frequently generates part-time, self-employed performers 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 might be analyzed separately.
Every event and every component of the music industry has an impact on the Memphis economy. Music, like other export industries, generates a flow of dollars for Memphis employers when they sell it to consumers. 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.
The data in Table 5 contain business employment and payroll information for Shelby County, Tennessee (Memphis), Davidson County, Tennessee (Nashville), and Travis County, Texas (Austin) provided by the United States Department of Labor, Bureau of Labor Statistics (BLS).
Since data for some segments are not released by BLS because of confidentiality restrictions, the data tend to understate the number of businesses, employment, and payrolls that could properly be attributed to the music industry. But, it does help in benchmarking the music industry in this area. Among the findings are the following observations:
* The number of establishments, employers, and total wages reported in the music industry in Nashville and Austin far exceeds the numbers in Memphis.
* In five of the 18 categories, no establishments were found in Memphis.
* In seven other categories, fewer than three firms were in the categories in question, and the data were unavailable because of the confidentiality rules maintained by BLS.
* Memphis had establishments in only 13 of the 18 categories and had reported data in only six of the categories.
* In those six categories where comparison data were available, it is obvious that the number of music businesses in Memphis is much smaller than the number in either Austin or Nashville.
* While most music businesses are small (less than ten people), Nashville and Austin had a broad range of music businesses that provided goods and services that were not available in Memphis.
* While the data did not include some businesses in Memphis (like the Gibson guitar factory in musical instrument manufacturing), it does capture the need for Memphis to broaden the range of services and increase the number of businesses in each industrial category.
* If Memphis is to compete with other centers of music activity, it may also need to concentrate local initiatives on expanding existing businesses and on attracting new businesses to Memphis. Economic development initiatives that target businesses and recruit them to Memphis need to include the music industry. These data observations are supported by the national overview provided by BLS:
Musicians, singers, and related workers
held about 240,000 jobs in 2000. More than
40 percent worked part-time, and more than
40 percent were self-employed. Many jobs
were found in cities in which entertainment
and recording activities are concentrated,
such as New York, Los Angeles, and
Nashville.
Musicians, singers, and related workers
are employed in a variety of settings. More
than half of those who earn a wage or salary
are employed by religious organizations.
Classical musicians may perform with
professional orchestras or in small
chamber music groups like trios or quartets.
Musicians may work in opera, musical
theater, and ballet productions. They also
perform in nightclubs and restaurants, and
for weddings and other events. Well-known
musicians and groups may perform in
concert, appear on radio and television
broadcasts, and make recordings and
music videos. The Armed Forces also offer
careers in their bands and smaller musical
groups. (2)
Economic Impact Methodology
Most studies of the economic impact of a single event, or a single industry, rely on the input-output model known as RIMS II (Regional Input-Output Modeling System) developed by the U.S. Department of Commerce's Bureau of Economic Analysis, or an alternative model known as IMPLAN. Both models are used to develop estimates of the total impact (both direct and indirect) of any injection of economic activity into a local economy. New capital investments in plant and equipment, new jobs created in a local economy, and new tourism expenditures are examples of injections that generate both direct and indirect effects. The models generate industry- and location-specific multipliers that convert initial direct injections into final output, earnings, and employment estimates.
Economic Impact Studies
Part of the difficulty in assessing the economic impact of music rests with the quantitative nature of the economic assessment process. Economists can quantify the employment and income benefits generated by the music industry but cannot measure either the value of music or its contribution to the quality of life in Memphis. Nonetheless, the pressure on music support groups and professional associations to gain public and private support has forced them to try to measure the quantitative impact of the industry on the local economy. Benchmark studies are used to document the success or failure of local initiatives designed to stimulate the industry's growth. Several of those studies are cited here, but the list is in no way comprehensive. Frequently, the studies consider the impact of the arts and non-profit support groups in a general way (Nashville, Dallas, and Atlanta) and do not identify the distinctions between music and other art forms. Each study has unique features, including the purpose, coverage, data, and evaluation process, and they cannot be directly compared.
The Economic Impact of the Entertainment Industry on Tennessee's Economy was conducted for the Tennessee Film, Entertainment and Music Commission by the Business and Economic Research Center at Middle Tennessee State University in 1991. The study was an attempt to quantify the economic impact of the film, T.V., video, music recording, music publishing, live performance, and tourism businesses in the state. A statewide survey of 1,850 businesses and 850 individuals was conducted with a response rate of slightly less than 10.0 percent (263 usable surveys). The study found that slightly less than 1.0 percent, or 18,000 of the state's workforce of 2.2 million people, were employed full-time in this industry. Over 60,000 people were employed occasionally or part-time. The entertainment industry in general was estimated to generate directly and indirectly 2.2 percent ($2.14 billion) of the state's Gross State Product. The total direct, indirect, and induced impact was estimated to be $2.57 billion.
Music employment was estimated to be 8,711, and live performances added another 8,940 jobs. Of the total jobs created by the entertainment industry in Tennessee, 79.0 percent were in Middle Tennessee and only 16.0 percent (2,856 jobs) were in West Tennessee. Of the industry's impact of $2.14 billion, 82.0 percent was generated in Middle Tennessee and 11.2 percent, or $240 million, was generated in West Tennessee.
Even with the broad industry parameters included in this study, the music businesses and the entertainment industry in general were found to play a small role in the state's economy. The vast majority of the industry's impact was found to be in Middle Tennessee. The jobs and income generated by the entertainment industry in West Tennessee were found to be a small and insignificant part of the West Tennessee economy. This conclusion is in stark contrast to Memphis' vision of itself as a music center of national and international significance.
A recent study, The Role of Music in the Austin Economy, identified economic growth issues that were developing in Austin. This study has direct and obvious implications for Memphis and its initiatives to build a larger high-tech and bio-tech sector of the Memphis economy. Both direct and indirect relationships that exist between the growth of the entertainment music sector of the Austin economy and the growth of the high-tech sector mirrors the Memphis initiatives. Many of Austin's problems with the music industry are also reflected in Memphis. Faced with a surplus of musicians and an inadequate number of venues, the Austin study identified four major policy options that could serve as model initiatives in Memphis. Those options included the following:
1. Explore ways to reduce the operating costs for existing music venues in order to make them more profitable. It is assumed that more profitable venues would hire more musicians, provide more benefits, and pay higher wages, which were issues faced by Austin musicians.
2. Develop additional opportunities for musicians by supporting regional and national marketing initiatives. Musicians in Austin found it difficult to make a living in the Austin market.
3. Designate a music ombudsman to represent the interests of musicians and music industry participants to other groups, like state and local government entities. Preventing the erection of barriers to growth would improve the industry outlook. Building economic development incentives directed toward the music industry would also improve the industry's growth.
4. Coordinate the local support groups that exist for the various diverse segments of the music industry. Cooperation, not competition, should be encouraged to improve economic conditions in the music industry.
Data Sources
1. Individual Survey
There were approximately 380 individuals who work largely in an independent manner within the Memphis music industry who participated in the survey process. Of these 380 individuals, 277 of them completed the economic opinion survey that provided the data that were used to calculate the economic impact of individuals who work independently within the Memphis music industry.
Every effort was made to identify and contact as many individuals as possible. While some individuals were contacted through mailing lists, Music Liaison Group (established by Memphis Tomorrow) contacted a larger number. Lists used in the survey process included the membership roster of the Greater Memphis Music Teachers Association, information from telephone directories, six different music industry source books, and contact lists provided by Music Commission members.
Key Findings from the Individual Survey. Below are some critical findings from the economic section of the survey of individuals working in the Memphis music industry:
* Of the 277 respondents to the economic survey, 58.8 percent (163) work full-time in the music industry, while 41.2 percent (114) work part-time.
* Average annual earnings from music for individuals working in the Memphis music industry were $21,783.
* Estimated total 2002 earnings for the 760 participants in the population were $16,555,080.
* Individuals in the music industry spent an average of $8,507 in support of their music occupation, ranging from equipment purchases, professional development classes, instrument repair, to promotional expenses.
* Estimated total expenditures for all individuals were $6,465,320.
2. Music Business Survey
The Sparks Bureau of Business and Economic Research compiled a list of 473 businesses working within the music industry in Memphis. These businesses were sent two survey mailings during the course of the data collection period. In addition to survey mailings, night clubs and restaurants featuring live music performance were contacted by telephone to generate a greater response. Music businesses also had an opportunity to complete a survey online. As of July 31, 2003, there were 251 valid responses.
Lists used in the business survey process included information from telephone directories, six different music industry source books, Film and Television Commission lists, and contact lists provided by Music Commission members. As with the individual survey, it is possible that some music-related businesses were omitted. Accordingly, the total number of businesses within the Memphis music industry may be greater than the number presented in this analysis.
Key Findings from the Music Business Survey. Below are some critical findings from the economic section of the survey of Memphis-area music-related businesses:
* Out of 473 businesses surveyed, there were 251 responses.
* Music-related businesses that responded had average expenses of $172,185 in 2002. Expenditures were made for a range of items from payroll (personnel) to equipment to food and beverages and the booking of live performances.
* Estimated 2002 total expenditures by all 473 music-related businesses were $81,443,505.
* Average total capital investment for each respondent was $442,037.
* Estimated cumulative total capital investment for all 473 businesses was $209,083,501.
* Average full-time employment per responding business was 5.7 persons.
* Average part-time employment per responding business was 5.5 persons.
* Average full-time equivalent employment per business was 8.5.
* Estimated total full-time equivalent employment for all 473 music-related businesses was 4,020.5. Average 2002 revenue per responding business was $251,413.
* Estimated 2002 total revenue for all 473 businesses was $118,918,349.
3. Output, Earnings, and Employment Multipliers
Multipliers from the Regional Input-Output Modeling System (RIMS II) developed by the U.S. Bureau of Economic Analysis were used to measure linkages between normal music industry operations and total output (the value of goods and services produced), job creation, and payroll generation.
4. Tax Revenues Generated by Nonresidents and Residents
Tax revenues were estimated by multiplying effective tax rates times the relevant expenditure categories. This includes estimates for both the city of Memphis and the state of Tennessee.
Economic Multiplies Process Results
In addition to the direct spending impact presented above, an even greater impact is created as music industry business owners, employees, and musicians live a normal life in Memphis. The spending of their income becomes the income of other Memphis-area businesses and workers who, in turn, take these earnings and continue the spending stream in the Memphis area. Minus leakages such as taxes and spending outside the Memphis area, the initial round of spending by music industry owners, employees, and musicians will turn over multiple times in the Memphis economy. This spending cycle is called the multiplier effect. The end-result of this process is that there will be a significant increase in total goods and services produced in the Memphis area as a result of spending by music industry owners, employees, and musicians.
1. The Impact of Music Businesses
Using the BEA economic multipliers described previously and total revenue of Memphis music businesses (estimated at $118,918,349), the total measurable economic impact of Memphis music businesses in 2002 is presented in Table 6. Estimated music business income in column (1), is multiplied against the appropriate output, earnings, and employment multipliers in columns (2), (3), and (4) to arrive at Memphis music businesses' impact on regional output, earnings, and employment in columns (5), (6), and (7).
As shown in Table 6, the total economic impact of businesses in the Memphis music industry was over $238 million in additional goods and services produced in the Memphis area during 2002, resulting in more than $70 million in total earnings while supporting over 2,500 jobs.
Estimate of Taxes Generated by Memphis Music Businesses. The earnings impact from the operations and revenues of Memphis music businesses also generates a tax impact for both Memphis and the state of Tennessee. During the 2002 fiscal year, the Sparks Bureau of Business and Economic Research estimated that Tennessee took in approximately 4.735 cents in tax revenue for every dollar of personal income of Tennessee residents, or about $47.35 in revenue for every $1,000 of personal income. Accordingly, the earnings impact from Memphis music businesses also helps to generate tax revenue. Table 7 presents an estimate of tax revenue generated by category from the earnings impact of Memphis music businesses.
Memphis music businesses generated substantial tax revenue for the state in 2002, from over $2 million in sales tax revenue down to nearly $14 in coin amusement taxes. In total, it is estimated that Memphis music businesses contributed over $3.3 million in state tax revenue.
In addition to state taxes, the earnings impact from Memphis music businesses also generates tax revenue for the city of Memphis. The earnings impact of Memphis music businesses results in nearly $475,000 in local taxes, ranging from a high of $182,672 in local-option sales taxes to $147 in miscellaneous franchise fees.
2. The Economic Impact of Individuals in Memphis Music
Using the BEA economic multipliers described previously and the total earnings of individuals working within the Memphis music industry (estimated at $16,555,080), the total measurable economic impact of individuals working in the Memphis music industry in 2002 is presented in Table 8. The estimated income of individuals working in the Memphis music industry shown in column (1) was multiplied by the earnings multiplier in column (3), resulting in the estimated total impact on regional earnings in column (5). Similarly, the total number of individuals working in the Memphis music industry shown in column (2) was multiplied by the employment multiplier in column (4) to produce the total estimated employment impact in column (6). As individuals working in the Memphis music industry in 2002 spent their income in the Memphis economy, they generated over $33.6 million in total earnings and a total of over 1,651 jobs.
Tax Revenue Generated by Individuals in the Memphis Music Industry. The total earnings impact from individuals working in the Memphis music industry of more than $33.6 million also has a tax impact on both the state of Tennessee and the city of Memphis. Based upon estimates of tax revenue per dollar of income, individuals working in Memphis' music industry generated directly or indirectly from over $900,000 in sales taxes down to $7 in coin amusement taxes. In total, individuals working in the Memphis music industry directly and indirectly generated almost $1.6 million in state tax revenue in 2002.
In addition to state taxes, the earnings impact from individuals working in the Memphis music industry also generates tax revenue for the city of Memphis. The earnings impact from individuals working in Memphis' music industry results in over $227,000 in local taxes, ranging from a high of $87,398 in local-option sales taxes to $70 in miscellaneous franchise fees.
3. The Economic Impact from Musicians Playing in the Tunica Casinos
As with Memphis music businesses and individuals working within the Memphis music industry, local musicians and bands playing in the Tunica casinos also have an impact on the Memphis economy.
Using BEA economic multipliers described previously and total earnings of local musicians working in the Tunica casinos (estimated at $2,111,400) (see Tunica Casinos Contribute to Memphis Tourism and Memphis Music for more details on the role of Tunica's casinos in the Memphis music industry (3)), the total measurable economic impact of local musicians and bands that played in the Tunica casinos in 2002 is presented in Table 9.
The estimated income of local musicians who play at Tunica casinos shown in column (1) was multiplied by the earnings multiplier in column (3), resulting in the estimated total impact on regional earnings in column (5). Similarly, the total number of musicians working in the casinos in column (2) was multiplied by the employment multiplier in column (4) to produce the total estimated employment impact in column (6). As local musicians who worked at Tunica casinos in 2002 spent their income in the Memphis economy, they generated nearly $4.3 million in total earnings and a total of almost 300 jobs.
Tax Revenue Generated by Local Casino Musicians. The total earnings impact of nearly $4.3 million from local musicians working in Tunica casinos also has a tax impact on both the state of Tennessee and the city of Memphis. Based upon estimates of tax revenue per dollar of income, local musicians working in Tunica's casinos generated directly or indirectly from over $126,000 in state sales taxes down to $1 in coin amusement taxes. In total, local musicians working in the casinos directly and indirectly generated over $203,000 in state tax revenue in 2002.
In addition to state taxes, the earnings impact from local musicians working in Tunica's casinos also generates tax revenue for the city of Memphis. The earnings impact from local musicians working in Tunica's casinos results in nearly $29,000 in local taxes, ranging from a high of $11,147 in local-option sales taxes to $9 in miscellaneous franchise fees.
4. The Economic Impact of Music-Related Tourism
In Memphis, music-related tourism has a special impact on the community. Because many of the local attractions have a musical heritage, it is impossible to separate tourism from Memphis music. But, if 4.2 million tourists visit Beale Street and over 550,000 visit Graceland each year, then the musical heritage of Memphis can be conservatively credited with 50.0-60.0 percent of the impact of tourism on Memphis and Shelby County.
The risk of overstating or double counting the impact of music clearly rises as music-related tourism is examined. Many local musicians are employed to entertain tourists, and most of our special events and concerts are tourist-friendly. So, by definition, some overlap exists in the estimates of the size of the music industry and the musical heritage of Memphis.
If 60.0 percent of the Memphis Convention and Visitors Bureau's findings could be credited to music-related tourism, then music-related tourism would have an economic impact as follows:
* $1.38 billion in total visitor spending
* $960.0 million in payrolls
* $99.0 million in state and local taxes
The tourism sector of the music industry is by far the largest and most influential segment of the Memphis music scene. The legacy of former artists and genres makes Memphis a tourist destination and a mecca for past, present, and future generations of fans from around the world. While the legacy may constrain the development of new and alternative types of music, the efforts of local musicians ultimately determine the path the Memphis music industry will take.
Music-related tourism is alive and well and will continue to grow and prosper as long as the tourism industry itself grows and prospers. Recent setbacks to the convention and tourism industry have been associated with the prolonged worldwide economic slowdown. To the extent that economic activity rebounds in 2004, the music-related tourism industry should show renewed strength and vitality.
Summary
Tables 10 and 11 contain summary data on the size and impact of the music industry in Memphis. In 2002, the music industry without music-related tourism was responsible for $366 million in goods and services produced while supporting 4,500 jobs and earnings of more than $108 million.
Music-related tourism is the largest and most significant economic component of the music industry in general. It represents nearly 3.8 times the impact of the other industry segments. Clearly, music-related tourism and its close ties to the musical heritage of Memphis has a large positive impact on the image and economy of Memphis.
The Memphis music industry also has a large and positive impact on tax revenues. Without tourism, the music industry generated over $5.1 million in state taxes and nearly $731,000 in local taxes. Music-related tourism was estimated to generate $86.6 million in state taxes and $12.4 million in local taxes. The tax revenue generated from the various components of the music industry provide significant levels of tax support for units of state and local government. While tourism is the primary generator of tax revenues, music businesses and individuals make large, positive contributions to state and local tax revenues.
Table 1. Memphis City Schools Music Teachers
Average Instructional
Classification Number Annual Salary Budget
Secondary Music Teachers 135 $44,357 $ 5,988,195
Elementary Music Teachers 145 44,357 6,431,765
Total 280 -- $12,419,960
Source: SBBER.
Table 2. Shelby County Schools Music Teachers
Average Instructional
Classification Number Annual Salary Budget
High School Band Teachers 8 $45,000 $ 360,000
Middle School Band Teachers 14 45,000 630,000
High School Choral Teachers 7 45,000 315,000
Middle School Choral Teachers 10 45,000 450,000
K-5 Music Teachers 39 45,000 1,755,000
Total 78 -- $3,510,000
Source: SBBER.
Table 3. Institutions of Higher Education Music Faculty
Full-Time Average Part-Time
College Faculty Annual Salary Faculty
Southwest Community College 4 $43,143 8
LeMoyne-Owen College 4 35,000 3
Christian Brothers University 1 54,000 * 1
Rhodes College 6 54,000 24
The University of Memphis 50 50,593 49
Total 65 -- 85
Average
College Annual Salary
Southwest Community College $ 6,660
LeMoyne-Owen College 6,000
Christian Brothers University 27,000 *
Rhodes College 27,000 *
The University of Memphis 3,348
Total --
* = Estimate.
Source: SBBER.
Table 4. Estimated Casino Size, Employment, and Attendance,
Tunica County, Mississippi
Casino Size Number of
Establishment (Sq. Feet) Employees
Bally's Casino Tunica 40,000 715
Fitzgeralds Casino Tunica 36,000 1,150
Goldstsrike Casino Resort 50,000 1,500
Grand Casino Tunica 150,000 2,936
Harrah's Tunica Casino and Hotel 50,000 885
Hollywood Casino Resort and Hotel 54,000 1,150
Horseshoe Casino and Hotel 45,000 2,755
Sam's Town Tunica 96,000 1,196
Sheraton Casino and Hotel 33,000 973
Estimated Daily
Establishment Attendance
Bally's Casino Tunica N/A
Fitzgeralds Casino Tunica 3,500
Goldstsrike Casino Resort 9,000
Grand Casino Tunica 12,000
Harrah's Tunica Casino and Hotel 4,373
Hollywood Casino Resort and Hotel N/A
Horseshoe Casino and Hotel 13,400
Sam's Town Tunica N/A
Sheraton Casino and Hotel N/A
Source: Book of Lists and Casino Directory.
Table 5. County Industry, Employment, and Income Data for Memphis and
Nashville, Tennessee, and Austin, TX, 2001
Number of Establishments
Shelby Davidson Travis
NAICS Description County County County
51223 Music Publishers N/A 93 N/A
339992 Musical Instrument Mfg. NF N/A 4
33431 Audio and Video Equipment Mfg. NF 4 N/A
45114 Musical Instrument and
Supplies Stores N/A 17 17
71113 Musical Groups and Artists 11 202 39
71151 Independent Artists, Performers,
and Writers N/A 85 44
51224 Sound Recording Studios 8 55 16
51229 Other Sound Recording Industries N/A 8 3
334612 Pre Recorded CD (Except
Software), Tape, and Record
Producing NF 11 N/A
51222 Integrated Record Production/
Distribution NF 11 N/A
51221 Record Production NF 22 N/A
71312 Amusement Arcades N/A 3 N/A
53311 Lessors of Non-Financial
Intangible Assets 10 29 18
61161 Fine Arts Schools 16 22 28
51211 Motion Picture and Video
Production 24 80 58
323119 Other Commercial Printing N/A 16 5
45122 Prerecorded Tape, CD, and Record
Stores 22 41 27
71141 Agents and Managers for Artists,
Athletes, Entertainers, and
Other Public Figures N/A 89 18
Totals 91 788 277
Employees
Shelby Davidson Travis
NAICS Description County County County
51223 Music Publishers N/A 240 N/A
339992 Musical Instrument Mfg. NF NA 43
33431 Audio and Video Equipment Mfg. NF 14 N/A
45114 Musical Instrument and
Supplies Stores N/A 133 270
71113 Musical Groups and Artists 93 1,388 320
71151 Independent Artists, Performers,
and Writers N/A 230 167
51224 Sound Recording Studios 43 336 66
51229 Other Sound Recording Industries N/A 41 4
334612 Pre-Recorded CD (Except
Software), Tape, and Record
Producing NF 562 N/A
51222 Integrated Record Production/
Distribution NF 109 N/A
51221 Record Production NF 59 N/A
71312 Amusement Arcades N/A 11 N/A
53311 Lessors of Non-Financial
Intangible Assets 52 651 65
61161 Fine Arts Schools 84 160 136
51211 Motion Picture and Video
Production 87 683 264
323119 Other Commercial Printing N/A 150 94
45122 Prerecorded Tape, CD, and Record
Stores 220 571 346
71141 Agents and Managers for Artists,
Athletes, Entertainers, and
Other Public Figures N/A 331 54
Totals 579 5,669 1,829
Total Wages (000)
Shelby Davidson Travis
NAICS Description County County County
51223 Music Publishers N/A $13,306 N/A
339992 Musical Instrument Mfg. NF NA $1,323
33431 Audio and Video Equipment Mfg. NF 1,112 N/A
45114 Musical Instrument and
Supplies Stores N/A 3,325 6,456
71113 Musical Groups and Artists $2,411 75,144 8,681
71151 Independent Artists, Performers,
and Writers N/A 8,061 10,307
51224 Sound Recording Studios 1,123 8,091 2,085
51229 Other Sound Recording Industries N/A 2,543 106
334612 Pre-Recorded CD (Except
Software), Tape, and Record
Producing NF 25,518 N/A
51222 Integrated Record Production/
Distribution NF 2,000 N/A
51221 Record Production NF 2,283 N/A
71312 Amusement Arcades NA 375 N/A
53311 Lessors of Non-Financial
Intangible Assets 2,422 33,558 5,405
61161 Fine Arts Schools 1,150 3,437 1,758
51211 Motion Picture and Video
Production 4,104 46,484 20,414
323119 Other Commercial Printing N/A 5,665 3,624
45122 Prerecorded Tape, CD, and
Record Stores 2,634 10,054 5,674
71141 Agents and Managers for
Artists, Athletes, Enter-
tainers, and Other Public
Figures N/A 26,917 2,398
Totals $13,844 $267,873 $68,231
N/A=Figures for the industry sector were in a non-disclosable format
and, therefore, not available.
NF=Industry sector has no presence in the country.
Source: Bureau of Labor Statistics 2001 annual data
Table 6. Estimate of the Economic Impact of Music-Related
Businesses on the Greater Memphis Area, 2002
Impacts
Final Demand Multipliers Output
Memphis
Music Business Output Earnings Employment (5):
Revenue (1) (2) (3) (4) (1) x (2)
$118,918,349 2.0066 0.5914 21.5000 $238,621,559
Impacts
Earnings Employment
Memphis
Music Business (6): (7):
Revenue (1) (1) x (3) (1) x (4)
$118,918,349 $70,328,312 2,556.7
(1) The entry in this column represents Memphis music businesses'
estimated total revenue for 2002.
(2) The entry in this column represents the total dollar change in
output that occurs in all industries for each additional dollar of
output delivered to final demand (total revenue) by the music industry.
(3) The entry in this column represents the total dollar change in
earnings of households employed by all industries for each additional
dollar of output delivered to final demand by the music industry.
(4) The entry in this column represents the total change in number of
jobs that occurs in all industries for each additional one million
dollars of output delivered to final demand by the music industry.
Source of Multipliers: U.S. Bureau of Economic Analysis.
Table 7. Tennessee Tax Revenue Generated by Memphis
Music Businesses, 2002
Tax Revenue Tax Revenue Taxes Generated
Per $1 of Per $1,000 by Music
Class of Tax Income of Income Businesses
Franchise 0.0026629 $ 2.66 $ 187,280
Excise 0.0031832 3.18 223,870
Income 0.0009259 0.93 65,114
Inheritance and Estate 0.0006332 0.63 44,529
Gasoline 0.0036657 3.67 257,800
Petroleum Special Tax 0.0003875 0.39 27,253
Tobacco 0.0005289 0.53 37,198
Beer 0.0001010 0.10 7,103
Motor Vehicle Reg. 0.0014014 1.40 98,558
Motor Vehicle Title 0.0000673 0.07 4,736
Mixed Drinks 0.0002260 0.23 15,893
Business 0.0001344 0.13 9,453
Privilege 0.0013218 1.32 92,960
Gross Receipts 0.0001367 0.14 9,616
TVA--In Lieu 0.0012624 1.26 88,782
Alcoholic Beverage 0.0001964 0.20 13,812
Sales and Use 0.0294056 29.41 2,068,044
Motor Vehicle Fuel 0.0011014 1.10 77,459
Coal Severance 0.0000047 0.0047 329
Gas and Oil severance 0.0000024 0.0024 169
Coin Amusement 0.0000002 0.0002 14
Total 0.0473490 $47.35 $3,329,974
Source: SBBER estimates based upon 2002 fiscal year esfimates of
revenue per dollar of income.
Table 8. Estimated Economic Impact of Individuals in the
Memphis Music Industry, 2002
Direct Effect Impacts
Multip1iers
Earnings Employment
Estimated Total Earn- Employ-
Individual Individuals ings ment (5): (6):
Income (1) (2) (3) (4) (1) x (3) (2) x (4)
$16,555,080 760 2.0325 2.1725 $33,648,200 1,651.1
(1) The entry in this column represents total measurable musicians'
income for 2002.
(2) The entry in this column represents the total number of musicians
who participated in the survey.
(3) The entry in this column represents the total dollar change in
earnings of households employed by all industries for each additional
dollar of output delivered to final demand by the music industry.
(4) The entry in this column represents the total change in the number
of jobs that occurs in all industries for each additional job in the
music industry (including the original music-related job).
Source of Multipliers: U.S. Bureau of Economic Analysis.
Table 9. Estimated Economic Impact of Tunica Casino Musicians on
the Memphis Music Industry, 2002
Direct Effect Impacts
Multip1iers
Earnings Employment
Estimated Total Employ-
Individual Individuals Earnings ment (5): (6):
Income (1) (2) (3) (4) (1) x (3) (2) x (4)
$2,111,400 135 2.0325 2.1725 $4,291,421 293.3
(1) The entry in this column represents total measurable musicians'
income for 2002.
(2) The entry in this column represents the total number of musicians
who participated in the survey.
(3) The entry in this column represents the total dollar change in
earnings of households employed by all industries for each additional
dollar of output delivered to final demand by the music industry.
(4) The entry in this column represents the total change in the number
of jobs that occurs in all industries for each additional job in the
music industry (including the original music-related job).
Source of Multipliers: U.S. Bureau of Economic Analysis.
Table 10. Summary of the Economic Impact of the Memphis Music Industry
Group\Category Output Earnings Employment
Businesses $ 238,621,559 $ 70,328,312 2,556.7
Individuals 114,167,195 * 33,648,200 1,651.1
Casino Musicians 14,559,228 * 4,291,421 293.3
Tourism 1,380,000,000 960,000,000 14,786.0
* The initial change in earnings for each group was divided by the
change in earnings per dollar of final demand (0.291) to yield an
estimate of the initial change in final demand. Then, the initial
change in final demand was multiplied by the output multiplier for the
music industry (2.0066), which yielded the total output impact
estimates for music individuals and casino musicians.
Note: Caution needs to be emphasized when using these data. Substantial
unknown areas of overlap exist in the classifications and so column
totals should be avoided
Source: SBBER.
Table 11. Summary of the Tax Impact of the
Memphis Music Industry
Tennessee and
Group\Category Tennessee Memphis Memphis
Businesses $ 3,329,974 $ 474,769 $ 3,804,743
Individuals 1,593,208 227,151 1,820,359
Casino Musicians 203,194 28,970 232,164
Tourism 86,646,444 12,353,556 99,000,000
Note: Caution needs to be emphasized when using these data. Substantial
unknown areas of overlap exist in the classifications and so column
totals should be avoided.
Source: SBBER.
(1) Based on the following assumptions: number of casinos in Tunica,9; number of bands playing everyday, 18; additional bands playing weekends only,9; average band size, 5; average daily pay, $115.00 per person; and percent local musicians, 50.0%.
(2) Bureau of Labor Statistics, "Musicians, Singers, and Related Workers," http://www.bls.gov/oco/ocos095.html.
(3) There is no way to determine if musicians who play in Tunica also completed the economic surveys. Therefore, there is a possibility of double counting.
John E. Gnuschke, Ph.D. and Jeff Wallace, Ph.D., Sparks Bureau of Business and Economic Research/ Center for Manpower Studies, The University of Memphis
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