Live Music Capital

The various benefits described by consumers and producers in relation to live music have a clear intrinsic value. These benefits can also be related to various forms of ‘capital’, being outcomes of (and therefore motivators to) live music engagement.

In neo-classical economics, capital and labour are theorised as the most common inputs in the production of goods and services. In economic analysis the term capital is used to understand the work of the tools and machines that produce these goods and services. This allows economists to price the work of these tools and machines in aggregate. This is useful for economic analysis and modelling but is also a potential weakness, as it assumes the various machines and tools employed can be directly compared to one another.

For example, the capital stored in a live music venue might be quantified by its potential to produce a given number of live music shows in a year. Theoretically the more live music venues there are, the higher this production potential would be and the greater the capital. Measuring capital in this way assumes it is stored or conserved in the tools used to produce it (in this case live music venues) and that this value remains mostly static.

This study departs from the neo-classical use of the term and instead views capital as an output of the production process. The concept of capital as a ‘stored potential’ is not rejected by this approach, but is seen as less significant for the purpose of valuing live music production than how that potential is ultimately expressed. It is only when citizens collectively express their capital that its effect can be measured and reconciled with costs to arrive at estimates of value.

For example the capital stored in a live music venue might be expressed as profits generated for producers or jobs created. The effect of these expressions of capital can be measured and compared with the venue’s costs to calculate an estimate of economic value. This valuation will depend on a significant number of environmental variables, including, among other things: the quality of raw inputs (performers, equipment, food and beverage offerings); operator skill; and wear and tear.

This more accurately describes the realities of live music production and is consistent with recent attempts to understand capital as more than just skills and tools.

For example, contemporary economic theory abounds with models claiming to illustrate different aspects and interpretations of capital including, but not limited to:

  • Aesthetic capital (Anderson, Grunert, Katz, & Lovascio, 2010)
  • Cultural capital (Bourdieu, 1993; L. Johnson, 2006)
  • Economic capital (Laeven & Goovaerts, 2004)
  • Social capital (R. D. Putnam, 2000; Woolcock, 1998)
  • Symbolic capital (De Clercq & Voronov, 2009; DiMaggio & Useem, 1978)
  • Erotic / sexual capital (Hakim, 2010; Michael, 2004)
  • Human capital (Marx, 1859; Smith, 1828)
  • Intellectual capital (Stewart & Ruckdeschel, 1998; Teece & Teece, 2000)
  • Knowledge capital (Carr, Markusen, & Maskus, 1998; Lööf & Heshmati, 2002)
  • Natural capital (Costanza et al., 2007; Ress & Wackernagel, 1996)
  • Psychological capital (Luthans, Youssef, & Avolio, 2007)
  • Spiritual capital (Finke, 2003; Iannaccone & Klick, 2003)

A rigorous valuation of live music in Australia requires that we account for the various forms of capital that can be attributed to the activities live music enables. Because capital is viewed as an output of the production process in this study, we have focused on forms of capital that identify discrete outcomes which can be traced back to live music production and the costs involved.

Live music capital, therefore, lies at the nexus between inputs (costs) and outputs and is understood to be a non-substitutable attribute that accrues discretely within individuals, and collectively in firms and the community. This capital can, theoretically at least, be expressed positively—for example, to promote social inclusion (Gibson & Homan, 2004; Sedita, 2008; Thornton, 2013)—or negatively—for example, to promote harmful of offensive ideals (Armstrong, 2001; Binder, 1993; Phillipov, 2011).

Economic expressions of this capital will be unique to the social setting (in this case, Australia), even though the potential for good or bad within it is theoretically uniform. All things being equal, the more widespread and/or intense the participation of the community, the greater the impact live music making in Australia will have on these factors.

The definition of capital used here is not intended to rebut alternative descriptions of live music capital; for examples, see Stempel (2006) and Lee, Cornwell, and Babiak (2013). Instead of trying to distinguish the value of live music production from the traditional economic forms of capital, this study integrates all definitions to embrace and capture a holistic spectrum of value. Because we are concerned with measuring the way capital is expressed, rather than its stored potential, the value of this capital per se is irrelevant and no attempt is made to quantify it. Nevertheless, articulating live music capital in this way serves to identify the different ways it might be expressed and the forms of input that contribute to these activities.

Drawing on the body of literature outlined in the introduction and qualitative data presented in the previous section we have identified four domains of capital in the context of live music making in Australia.

Figure 10: Forms of live music capital

Figure 10

Physical Capital

The physical assets and infrastructure generated by Australia’s live music scene are more wide-reaching and substantial than what might be assumed at a glance. They extend beyond where music is performed, to include rehearsal spaces; performance training institutions; staging, production and hire companies; logistics and touring companies; the business premises of promotion and management companies; sound reinforcement and acoustic treatment manufacturing; and the media where live music is promoted and broadcast.

The vibrant social dynamic of the music industry means that infrastructure also includes the neighbourhoods where musicians and other creative individuals choose to live; the ‘cultural clusters’ (Pratt, 2008; Shaw, 2013; Watson, 2008) that house the bars, clubs and cafes they frequent; and the specific atmosphere of a city that fosters and nurtures a contemporary creative environment and, consequentially, a vibrant live music scene (Watson, Hoyler, & Mager, 2009). Despite their absence from most economic accounts of live music, our research has already demonstrated that informal performance spaces including house-shows and warehouses appear economically significant, if socially ambiguous.

Human Capital

Human capital is derived from the competences, tacit knowledge, skills, education and training of people. The OECD consider it to be critical to the well-being of communities and define it as, “the knowledge, skills, competencies and attributes embodied in individuals that facilitate the creation of personal, social and economic well-being” (Côté & Healy, 2001). Human capital has often been defined and measured with reference to acquired cognitive skills and explicit knowledge. A broader notion of human capital more adequately reflects how various non-cognitive skills and other attributes contribute to well-being.

In context of the benefits producers and consumers have identified they receive from engaging with live music, human capital encompasses physical and mental health and wellbeing as well as the knowledge and experiences gained from attending and producing live music. To that end, we can more fully appreciate human capital as the sum of:

  • psychological capital
  • knowledge capital, and
  • physical health.

Psychological Capital

Psychological capital is a recent construct arguing that the states (as opposed to dispositional traits) of self-efficacy, hope, optimism and resilience can be amassed in the individual and converted into commercial gain (Luthans, Avolio, & Youseff, 2007). The exploratory work on psychological capital done thus far suggests that in positive iterations it can enhance workplace performance, individual commitment and satisfaction, and—as a contagion—effect constructive organisational change (Luthans & Youssef, 2004).

The descriptions of psychological capital align closely with benefits of live music attendance identified by consumers.

Knowledge Capital

The presence of knowledge capital in the live music industries is evidenced in the high number of consumers reporting a commercial benefit from attending live music, as well as literature outlining the importance of tacit knowledge to technical work around music (Horning, 2004).

Knowledge capital comprises two forms, technological and experiential (Hiser, 1998). The technical skills gained from live music production are broad and can be transferred and adapted to many other professional pursuits. The successful production of a live music event involves a variety of individuals with specific skill-sets working together in order to achieve something beyond their combined experience. Similarly, the organisational and managerial skills gained from live music production are also transferable to other professional and personal aspects of life. As many local-level acts lack the financial capital to employ professional (or even semi-professional) management, the responsibility of booking, organising, promoting and executing successful live music events often falls on the artists themselves.

The basic organisational and managerial skills required for the successful production of live music events are beneficially transferrable to many other professional arenas. Therefore, involvement in live music production provides technical and experiential training that has wide-ranging applications.

Physical health

Physical health is defined here as the embodiment of the health, wellbeing, cognitive and other physical benefits associated with live music production or attendance. It is well described by consumers and existing literature, and we do not revisit these arguments here.

Evidence of negative health outcomes directly attributable to live music attendance were absent from our data, and the body of research we consulted in preparing this report. There is nevertheless an anecdotal correlation between live music and excess alcohol consumption, tobacco, illicit drug use and exposure to noise. The extent to which these are causal or even population attributable risks is encouraged as a direction for the future research, with an emphasis on decoupling live music from other night-time or creative industries.

Social Capital

Social capital is defined by the OECD as ‘the norms and social relations embedded in the social structures of societies that enable people to co-ordinate action to achieve desired goals’ (Grootaert, 1998). Both qualitative and quantitative instruments used to measure social capital generally cluster their enquiry into the operationalisation of individuals’ trust, happiness, inter-personal networks and civic engagement (Dudwick, Kuehnast, Jones, & Woolcock, 2006; Grootaert & Basterlaer, 2002; R. Putnam, 2002).

Improved social capital was the most frequently identified benefit associated with live music by both producers and consumers participating in this research. Consumers identified feeling more connected, happy and engaged while producers spoke of the role venues played in facilitating community.

The relationship between social capital and commercial success is well established in literature, and contemporary music scenes thrive on social, economic and “subcultural capital” (Thornton, 1996) sustained and maintained by social networks of like-minded enthusiasts, musicians and music industry professionals (Gibson & Homan, 2004).

Symbolic Capital

Symbolic capital describes the value derived from being known and recognised—a concept synonymous with standing, good name, honour, fame, prestige and reputation. Symbolic capital need not necessarily be confined to the elite domain—there is a limited form of symbolic capital observable in all hierarchies. In the live music context, symbolic capital can attach to regions, cities, venues and performers.

Melbourne, for example, has an actively self-promoted reputation for being the live music ‘Capital’ of Australia due to its multitude of venues, its calibre and concentration of local acts, and its history and legacy of producing world-class artists and musicians (Homan, 2011; Lobato, 2006; Shaw, 2005, 2009, 2013; Walker, 2012). It is argued that such place-based symbolic capital encourages migration of consumers and producers, as the appeal of Melbourne’s vibrant live music scene draws creative individuals and music lovers from other regional and urban centres.

Artists, too, enjoy and exploit their own form of symbolic capital. Australian musicians like Nick Cave and Paul Kelly have inspired not just musicians, but many other creative individuals such as writers, filmmakers and documentarians (Walker, 2012). Bruce Springsteen and Bono have been the focal point of both inspiration and aspiration for musicians and politicians alike. In addition, one cannot ignore the well documented (at least anecdotally) phenomenon of ‘groupies’ (Darwin, 2010; Howe & Friedman, 2014; Passanisi, 2010) —unique evidence of the existence and potential of symbolic capital in live music cultures.