Looking back 20 years ago, U.S. exports of entertainment related goods were 40 percent of our exports, and for many years it was our number one export. Take the case of music: our exports of these entertainment products totaled $36 billion in 1996, more than any other U.S. industry, according to Commerce Department data.
Today, according to that same data, our entertainment product exports are negative. How could we allow them to decline so much? It used to be that 80 percent of the world’s entertainment was conceived here, recorded here, manufactured here, and then exported. Importantly, all the profits from this activity stayed here in the U.S. This is the way it was until 1997. That year, the consolidation of the major labels and the near extinction of domestic independent entertainment distribution began.
Every time a U.S. consumer buys entertainment product from a multinational corporation, product from artists on labels like , Sony, Universal or WEA, the U.S. loses both the domestic income and the ability to export finished product, accounting for billions in lost opportunities. Between 1996 and 2004 multinational corporations, saw their foreign profits nearly double -- while domestic profit margins declined by more then three percent.
Yet, the entertainment business is still profitable according to the National Association of Recording Merchandisers. The worldwide entertainment market grew by 2.3 percent in 2009 and Globally, annual sales rose 0.2% in 2012
Yet, according to Census data we exported less than $3 million dollars worth of music product in that same year, down about a half a million from the year before. In less then a decade we when from billions in entertainment product exports to millions, without a blink of an eye.
As Micheal E. Porter eloquently pointed out in “The Competitive Advantage of Nations,” that a nation's prosperity is created and not inherited, states must recognize that a nation's competitiveness depends on the capacity of its industries to innovate and upgrade.’
We have failed to heed these words and worse is that -- we are entertaining our economy to death!
If all of this is not a bit hard to swallow consider this the USA is on track to Importing more Music than we Export and this could happen as soon as 2015. (UPDATE THIS HAPPENED)