Analysis

BPI makes new argument for music as a driver of gadget sales


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PrintThe argument that music drives sales of hardware isn’t a new one: it’s been talked about within the music industry since the heyday of Apple’s original iPod, for example.

Some countries have gone as far as implementing levies on sales of gadgets capable of playing music, with the notion often backed by rightsholders as a way to make up some of the income they saw as lost to the piracy that for many people stocked these devices with songs.

And Microsoft famously agreed a deal to pay UMG a small share from every sale of its Zune devices, although as it turned out, $1 per Zune paled into comparison with the earnings a similar deal for iPods could have generated, if labels had managed to strike such an agreement.

Anyway, the challenge with the music-drives-hardware-sales argument is understanding whether it’s true, and if so, how much. That’s something British music body the BPI is trying to tackle with a new report, commissioned from economist Jonathan Todd. It analyses music and hardware sales in the UK and other G7 countries, and attempts to understand the link between the two.

The key claims: Between 2008 and 2012, UK music consumption accounted for an additional £11bn of hardware sales – £8.4bn for smartphones, £2.5bn for tablets, £384m for MP3 players and £74m for connected hi-fis – including the calculation that “for every 1 per cent increase in demand for music there is a corresponding 1.4 per cent lift in sales of smartphones”.

What’s the BPI’s goal here? To prove that music’s economic importance to the UK (and, by extension, elsewhere) exceeds its direct revenues: it makes a point of comparing the £11bn figure above with the £5.4bn of retail spending on recorded music over that period, for example.

But as with any study of this nature, it’s likely to provoke arguments: for example, about music’s impact on smartphone and tablet sales compared to apps in particular, even though there’s obviously a crossover between the two categories with services like Spotify.

At this stage, the BPI doesn’t appear to be using the report as an argument for a hardware tax in the UK – that would really set the cat amongst the pigeons – but we’re expecting this report to spark a lot more debate in the days to come.

We’ll add a link to the full report once it’s published on the BPI’s website this morning.

Stuart Dredge

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