Prepared by Jane Powles, Australian Music Industry Network. Submitted 17 March 2008.

Entered on knowledge base 3 September 2008.

Strengths

• Australian Contemporary Music Industry (ACMI) substantial contributor to Australia economically, culturally and socially
• Success stories that provoke national pride
• Multiplicity and fusion of genres in Australia create a particular identity in the international market place
• Contributes significant economic value generating high levels of income employment and participation
• Musical product exists also as an input to other products and services
• Strong and growing independent recorded music sector
• Diversity in products and services
• Thriving independent sector
• Growing number of small to medium size independent businesses
• Strong and established collection societies
• Industry is currently acknowledging weaknesses and being proactive in driving resolutions
• Trend towards legitimate sale of music through digital channels
• Contemporary Music is linchpin of emerging lifestyle technologies
• Music economies value-add in the venues sector, production and delivery of recording, mediated performances, and support activities such as education and training.
• High level of live participation in regional centers
• English first language
• Strongly entrepreneurial businesses and artists
• Strong ties with UK and US
• Existing trade links in other territories
• Relatively low cost structures in relation to manufacturing
• Strong sector representative bodies
• Genuine propensity to innovative use of technology

Weaknesses

• Political and economic environment not conducive to increasing presentation nor consumption of independent music. i.e share of radio airplay on commercial stations access to retail.  
• Industry is highly fragmented with poor communication between sectors
• Fragmentation can lead to information gaps
• Limited identification, aggregation and analysis of industry information
• Immature relationship with financing and investment sectors
• Under developed relationship with government
• ACMI (Aust Contemporary Music Industry) is small in global terms
• Small domestic markets in comparison to Europe and US
• Lack of access to capital and Inability to raise finance and capital
• Intangibility of product and short term nature of music projects decreases investment opportunities.
• Shortage of relevant business and product packaging skills
• Lack of specialist investment vehicles that could raise the industry’s profile among investors    
• Lack of access to critical industry information
• Lack of support for industry operators
• General lack of policy and fiscal acknowledgement of the cultural value of contemporary music
• Opportunities for presentation hampered by restrictive legislation – live venues
• Lack of whole nation and whole industry branding within international arena
• Potential to be a disparate industry esp. the division between multinational majors and the independent sector
• Lack of funds within the independent sector to support extensive export development.   
• Australian consumer trends indicate Australia being a net importer of music
• Lack of access for the independent sector to radio and retail networks
• Lack of framework for industry and government to monitor the effectiveness of anti piracy enforcement provisions, and discuss future legislation and policy.
• Lack of education model to prevent ongoing piracy  
• Lack of critical industry information to support its case to industry government and investors
• Poorly developed business models for digital content and application

Opportunities

• Contemporary Music is a final product in itself and an input into a series o other products and services.
• Potential for growth and innovation across the industry’s value chain
• Sectors of the industry are beginning to merge into a cohesive unit.
• Large and growing number of small to medium businesses emerging.
• The independent sector is an important and growing contributor to Australia’s economy   
• The Industry is in a position where it wishes to drive solutions to its issues
• Overseas marketing – international trade fairs, showcase opportunities within Australia and overseas
• Evolution of self produced sound recordings (could be threat – quantity vs quality)
• Rapid growth of online distribution methods (could be threat – illegal use)
• Wholesale value of physical recorded music sales dropped significantly since 2003 opens up other consumption models (could also be a weakness – decreasing sales)
• Digital sales have grown exponentially (could be threat depending on legal or illegal use of IP)
• New technology creating new applications for music i.e ring tones
• Emergence of new products, revenue streams and distribution channels
• Emergence of new business models
• Shifting nature of global competition
• Growing Asian Export markets
• Potential for higher market share in other OS markets
• A shift towards increased import replacement  (Australians buying more Australian music)
• Investment in music business and training
• Increased cost efficient distribution models
• Independent alliances with majors
• Increasing importance of major retailers eg Kmart
• Increases in local output has potential for increasing employment and entrepreneurial opportunities.
• Access to Asian market places, possibility to develop specialized skills to sell into this market
• Lack of time zone differences within Asian market    
• Growing number of content hungry industries – film TV
• Overall growth of the creative industries model
• Global music market place is in transitional phase   
• A whole of government approach that would address policy development and planning, industry education, integrated information collection, export market development, reinvigoration of the live music scene, financing and investing

Threats

• Process of recording and distributing music is changing rapidly (also an opportunity)
• Perceived level of risk with intellectual property assets and the capacity for the industry to demonstrate the risk return profile of proposed investments.
• Small scale of businesses operating within in the independent sector.
• Operating in an increasingly competitive global and digital market
• Other smaller countries have established effective well integrated industry – government strategies increasing competition for ACMI within the global market place
• Significant barriers to export growth including small size of domestic market, difference in attracting investment, high cost of international touring caused by geographic location.
• Distance to key international markets
• The recorded sector of ACMI has been dominated by the four multinationals, potentially threatening the cultural diversity of output.  
• Per unit of primary physical music formats have fallen over time
• Industry fragmentation can lead to decreased collaboration, long term investment in that economies of scale cannot be captured.
• Withdrawal of live music venues
• Difficult nationwide legislative hurdles.
• High cost of insurance
• Security
• Growth of piracy
• Current government policies are skewing investment opportunities to particular sectors of the creative industries eg film  
• Overall the ACMI is supported by government in a piecemeal manner
• Lack of coordination and unified representation within state and territory governments
• Trend of merging major multinationals threatens the creative diversity     
• Lack of access due to internet access in regional centres