University of Stirling
Department of Film and Media Studies
Seminar: The Political Economy of Music

Cultural protectionism: how governments attempt
to support their national music industry

von: Christian Mossmann

Table of Contents

1. Introduction

2. Different means of support

3. Case studies: France, Canada, Germany

4. The concept of the Music Export Office

5. Conclusion

6. Bibliography

1. Introduction

The music industry likes to stress that it currently encounters a deep crisis. While comparable industries could claim the same, the music industry has the advantage that music belongs to culture which is traditionally subsidised and protected by the national government. Therefore, the music industry tends to request either financial or legislative support from the government for solving its problems. National music policies have become common since the nineteen-seventies and each state takes a different approach and attaches different importance to supporting its national music industry (Wallis & Malm 1984: 217). This essay evaluates the issue whether governments are able to take effective measures to protect their music industries. Firstly, I will present the various methods that governments use to support the domestic music industry. Secondly, I will introduce case studies to show the measures being taken in different countries. After illustrating the extensive cultural policy in France, the employment of a radio quota is elucidated with the example of Canada. In addition, I will show how Germany makes stronger efforts towards a popular music policy and how countries try to promote their national music through export offices. Consequently, I will show how the European Union makes its first attempts to promote the music of its member states as a common culture in order to strengthen the EU music industry.
Generally, this essay concentrates on analysing the popular music industry but it is interesting to note that government subsidies for classical music and the “high arts” are on a much higher scale (Internet src: 8)

2. Different means of support

Since the music industry has cultural as well as economic significance, the respective ministers are likely to have differing views on the issue which supportive measures should be implemented. In addition, there are various other groups who lobby for their interests. However, the most essential motivations for governments to take action are strengthening the export of their national music, ensuring that the national music gets sufficient domestic airplay (and through this sales), and preserving a country’s culture.
The range of measures which governments can take in an attempt to support their domestic music industries is wide. These measures include legislative means such as imposing radio quotas, which ensure that national music productions are not neglected in its country of origin, as wells as fiscal means, such as reduced VAT on recordings, a blank tape levy or also direct financial support. In Holland, for instance, the Stichting Popmuziek Nederland (SPN – Dutch Rock Foundation) has successfully lobbied the government to receive financial support to maintain a rock music culture beyond the mainstream. Its budget has been increased steadily and today the SPN performs various activities which help to preserve a vibrant Dutch music scene (Rutten 1993).
State interventions are, however, often controversial and their benefits questionable. Nevertheless, many countries regard them as essential and the music industry lobbies, partly successful, in order to convince governments of their necessity. For example, in 2002 the International Federation of the Phonographic Industry (IFPI) ordered a consumer research in five countries (UK, Germany, Spain, Italy and Sweden) to prove that consumers would buy more CDs if the VAT rate was substantially lower. The research concluded that sales would increase up to 160% which would compensate the initial tax loss within a period of one or two years (Internet src: 6). Although it is likely that CD sales would increase, the estimated extent of this increase sounds dubious. Naturally, in such interviews consumers tend to vote for tax reductions but the possibility that some of them would continue to copy CDs or download music from the internet cannot be refuted. Furthermore, it is debatable whether producers and retailers would keep their promise to pass on the whole amount of tax reduction to the customers.

3. Case studies: France, Canada, Germany

After this brief introduction to the repertoire of possible state measures, some case studies of different countries will exemplify which of these measures are actually employed and how successful they are. France is a country that employs various policies, some of which are quite unique. For example, similar to its levy on cinema tickets, France levies a 3.5% tax on concert box office sales which is used to support new French artists, the export of French music and even to enable artists to purchase musical equipment. France - a country which has had arguments with the USA over its protectionist attitude towards its cultural industry since GATT - openly admits that this measure serves “to take money from the American artists who make a lot of money in France, and give it back to the French artists” (Internet src: 7). In addition, French artists are extremely privileged in receiving “social security, unemployment benefits, and subsidies for touring and rehearsal spaces” (ibid.). This extensive government support has effectively resulted in a growth in domestic music sales (ibid.).

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