Initiatives of theHamburg Kreativ Gesellschaft
Hamburg's music industry is thriving - and at the same time is worried about small and medium-sized acts and venues. How the ecosystem remains vibrant and what role technology plays in this: An industry overview.
Music is more than an expression of creativity, art and passion. More than cultural enjoyment or a hobby. For Hamburg, music - like games and design - is an economic factor. "Music is also the most international, simplest and most cross-generational product of the creative industries," says Alexander Schulz, founder and head of the Reeperbahn Festival.
"Music is the most international, simplest and most cross-generational product of the creative industries."
The Hanseatic city seems to be well positioned with its "product range" of legendary clubs in St. Pauli, the Elbphilharmonie and the musical theatres. Music can be heard at all levels here: Behind high bunker walls at Club Übel & Gefährlich, underground at the Mojo Club or on the water like on the deck of Frau Hedi's Tanzkaffee. There are also two major instrument manufacturers in the region and many tourists travelling to the Hanseatic city especially for musicals, shows and concerts.
Over 16,000 jobs in the region depend on music, according to the Hamburg Music Business e.V. association. The association represents the interests of around 140 companies in the industry and has also included several independent towns and districts in the surrounding area, including Pinneberg and Harburg, in its figures for the region. According to the figures, total turnover was around 1.4 billion euros in 2023, which is back to pre-crisis levels.
But behind the scenes in the Hanseatic city, things are boiling over: artificial intelligence and streaming services require new business models and have revitalised and expanded the discussion about fair remuneration. In the press, headlines such as "Taylor Swift enchants 50,000 fans in Hamburg" mix with news such as "Legendary Hamburg clubs have to close at Sternbrücke".
Annual turnover generated by Hamburg's music industry*
People work in Hamburg's music industry.*
the number of people in employment in Hamburg increased between 2016 and 2022*
Hamburg companies divide the market among themselves*
the number of Hamburg companies increased between 2016 and 2022*
the number of micro-enterprises grew between 2016 and 2022*
Companies include companies with an annual turnover of more than 22,000 euros as well as small companies. Employed persons include both persons subject to social security contributions and marginally employed persons, as well as the self-employed.
*Goldmedia Standortmonitor, according to the methodology of the BMWK Kultur- und Kreativwirtschaft (as of 2022). All data cited here relate exclusively to the city of Hamburg. In addition, the results of a regional study by Hamburg Music, which includes the following independent cities and districts in its calculations alongside Hamburg, are used in appropriate places: Duchy of Lauenburg, Stormarn, Segeberg, Pinneberg, Harburg and Stade.
Events are the most important segment of the industry in terms of turnover and number of employees and the most important source of income for many artists. "In the live and streaming business, the very well-known acts actually cover everything," says Alexander Schulz, who is also CEO of Hamburg Music.
Thomas Burhorn, trumpeter and music director of the techno brass band Meute, has also noticed that the mega-stars have moved even more into the spotlight after the pandemic. "The public is spending an insane amount of money on mega events," he says. Hamburg organiser FKP Skorpio manages to sell hundreds of thousands of tickets months in advance for performances by stars such as Ed Sheeran in the Volksparkstadion.
Whether you like the hype surrounding Taylor Swift or not, when the US star performs at the Volksparkstadion for two days in a row, as she did in 2024, it's not just good for the city's image. According to the regional study by Hamburg Music, every euro generated directly by music generates a further 67 cents in other sectors.
Tourism benefits in particular: Music travellers spend an average of 347 euros in Hamburg, significantly more than in Berlin (238 euros) or Munich (298 euros). Musicals also play their part in the appeal of music: "The Lion King" at the Stage Theater am Hafen alone has attracted around 15 million spectators since 2001.
According to Thomas Burhorn, concerts with an audience of less than 500 rarely pay off. "People simply don't have the money left for smaller concerts and acts, so smaller and medium-sized clubs between the harbour and Schanze have to close or move," he says. The high rent level also leads to clubs being pushed out or replaced by more lucrative uses. Molotow, for example, has had to move several times due to new buildings on Spielbudenplatz and is set to become a subtenant of Hamburg Kreativ Gesellschaft in new premises on the Reeperbahn in 2025.
"People simply have no money left for smaller concerts and acts, so smaller and medium-sized clubs between the harbour and Schanze have to close or move"
The tense situation in the club scene has consequences for the more than 3,600 creatives in the industry, including orchestral and solo musicians, composers and lyricists. "Many of the lesser-known musicians are hoping for big success in the tunnel and are exploiting themselves," says Thomas Burhorn. According to him, many keep their heads above water with side jobs: they give music lessons, perform at corporate events or produce music for advertising.
The independent music scene mainly receives state support on a project basis. The Music City Fund, for example, which is endowed with 600,000 euros a year, supports cross-genre projects from pop to jazz to classical music. There are also programmes such as Music WorX, Europe's first publicly funded incubator for start-ups at the interface of music and technology, which attracts international talent to the Hanseatic city.
Queues usually form outside the clubs when tens of thousands of fans make the annual pilgrimage to the Reeperbahn Festival to see several hundred acts from genres such as indie, electronic and hip-hop. The fact that the event will take place for the 20th time in 2025 is also thanks to a financial injection of millions from the city and the federal government.
The festival also organises a conference with panels and workshops over the four days of the event. "This has the positive effect that not only companies from the live market, but also record companies, management and so on offer us new talent, because representatives come from all countries," says Alexander Schulz. Ed Sheeran, for example, signed his first record deal after his performance in Hamburg in 2011.
The fact that many artists never leave the "tunnel", as Thomas Burhorn says, is due to the "widespread emulation" of trends. "If you do it like Taylor Swift, you're one of hundreds of thousands." It's not surprising that he feels this way. The dozen brass players and drummers in his band occupy a niche with their mix of techno and brass music. Meute's breakthrough also came thanks to social media. in 2016, a video of a guerrilla street gig went viral.
Today, Meute receives more requests than it can handle, tours Europe, the USA and Mexico and "feeds around 20 people", including booking agents and technical crew, as the band leader says. By Hamburg standards, however, this is anything but exemplary. "Very few tour internationally," says Thomas Burhorn.
"There are millions of songs out there, but many go undiscovered and don't get the attention they deserve. AI-supported software can help us find new songs, musicians, labels and publishers that we might otherwise never have noticed."
"We must do everything we can to protect the clubs, which compete with completely different sectors on the rental market, for example. Such subsidies are a comparatively small investment, but have huge benefits for the entire city."
"What's special about Hamburg is this very close alliance between the various players in the cultural and music scene. I don't know that from other cities and it has become even closer due to the pandemic."
"Hamburg is still one of the most important creative and music centres in Germany. In order to remain so and to continue to be perceived as a young and creative city, it is important to be in constant dialogue with the creative industry. In my view, the further development of a lively club culture, the expansion of music venues, affordable practice rooms for musicians and start-ups in the tech and music sector are particularly relevant."
In contrast, the music ecosystem, of which the Hamburg scene is a part, is international. After the digitalisation upheavals at the turn of the millennium with piracy and free downloads via services such as Napster, the industry is once again generating record revenues: in 2023, global sales of sound recordings rose by 10 per cent to almost 29 billion dollars. The number of songs available on Spotify has doubled in four years to more than 100 million tracks.
All players want to share in the economic success: artists, composers and lyricists. Organisers, distributors and record companies. The labels are among the biggest profiteers, above all the three majors Universal, Sony Entertainment and Warner Music, which share around 70 per cent of the market between them.
Warner has been managing its Central European business from Hamburg for over 50 years. Local great Udo Lindenberg is under contract there, as are Ed Sheeran, Coldplay and Peter Fox. The smaller competitors Edel and Believe Digital are also based on the Elbe. Instead of sitting back with the royalties from streaming, the labels are also looking for new ways to broaden their business and tap into new sources of income, as Marec Lerche, Warner's Head of Business Development, says. Warner, for example, is cooperating with "mental health and sports providers" and placing its artists' music in the gaming sector, such as in the video game Fortnite.
The example of Kate Bush also shows that money can be made with the catalogue business. A song by the British pop singer became a chart hit again 37 years after its release because it was used in a Netflix series. "And suddenly kids are listening to old music again," says Alexander Schulz. According to him, the sync business, in which songs are combined with games, commercials and films, also offers freelancers good opportunities to earn extra money.
Especially in Hamburg: the instrument manufacturing sector contributes more than a quarter of the added value to the local music industry, almost as much as the event sector, as the Hamburg Music Study shows. This is mainly due to the fact that two major manufacturers, Steinway & Sons and Yamaha Music Europe, are based in and just outside the city. Together with instrument wholesalers and retailers, the segment creates more than 2,600 jobs in the region.
These instruments are also played in the Elbphilharmonie, which remains an audience magnet with an occupancy rate of 94 per cent for concerts (2022/23 season). Like the State Opera and the NDR Elbphilharmonie Orchestra, the concert hall benefits from institutional funding. "The variety of concert formats makes the Elbphilharmonie a strong catalyst and an exciting field for experimentation," says Burkhard Glashoff, head of the Pro Arte concert agency and parent company DK Deutsche Klassik.
Compared to the pop and rock business, classical music was able to recover more quickly from the pandemic-related forced break, according to Burkhard Glashoff. "The audience came back quickly," he says. Unlike in the entertainment sector, young, less well-known artists are also in high demand in classical music, as Burkhard Glashoff says. "We want to break up the traditional concert formats even more in future and present classical music in a more contemporary and open way in order to reach people beyond the classical educated middle classes," he says.
"We want to break up the traditional concert forms even more in future and present classical music in a more contemporary and open way in order to reach people beyond the classical educated middle classes"
Despite the comparatively solid situation in the classical music sector, Burkhard Glashoff also points out "all kinds of challenges" that Hamburg's music scene cannot escape, such as the wars in the Middle East and Ukraine and "the disastrous state" of the transport infrastructure: "Artists often simply don't arrive on time," he says.
The question of how authors whose songs are fed into AI systems are paid remains unresolved across the industry. "Pop is such a data-light, simple product: dominant, subdominant, tonic and a bit of voice on top," says Alexander Schulz. "That makes the music understandable worldwide, but also very vulnerable."
Marec Lerche also believes that labels have a responsibility to protect the rights and interests of artists. "As a label, we see it as our duty to ensure that they benefit from it and have absolute transparency about how and where AI is used," he says.
Agnes Chung knows where the opportunities of AI lie. She works at the interface between music and technology and, with her start-up musicube, is a prime example of how start-ups can work in Hamburg. For example, she went through nextMedia.Hamburg's Media Lift incubator, which is part of Hamburg Kreativ Gesellschaft.
Agnes Chung and her co-founder David Hoga have developed and trained AI-supported software that automatically categorises songs according to characteristics and enriches them with metadata. "This allows us to burst the filter bubble through which we all navigate with our playlists," she says. As this is also exciting for labels, publishers and rights holders, Agnes Chung now works for the US licensing platform Songtradr. It took over musicube in 2022.
Agnes Chung has remained loyal to Hamburg. On the board of Hamburg Music, she wants to do more to promote the exchange of knowledge on new technologies. Together with the association, she is pursuing the vision of a "House of Music" as an interdisciplinary place for encounters, creativity and innovation in the Hanseatic city. As inspiration, it cites initiatives such as the Ligeti Centre, where the University of Music and Theatre (HfMT) and the University of Applied Sciences (HAW) together with the Technical University (TUHH) and the University Medical Center Hamburg-Eppendorf (UKE) want to "build a bridge between art, science and innovation", as the website states.
Alexander Schulz can only speculate as to whether the interplay between creatives and technology will eventually lead to AI writing hits. First and foremost, it is important that those who "provide the feed" for AI are also paid appropriately, he says. The new technologies can also help to make the many invisible artists in streaming more visible, as the example of musicube shows.
In addition, rapid technological change could make the live concert experience even more attractive in the future. At least that's what Burkhard Glashoff believes. "That may sound pathetic," he says. "But I really believe that the more artificial and digital our world becomes, the greater the need for closeness and contact."
RockCity Hamburg e.V.
As a non-profit association, Hamburg's centre for popular music is committed to supporting Hamburg's musicians at all levels.
Hamburg Music
Hamburg Music aims to create a structural framework for successful and independent business in the field of music.
Clubkombinat
Clubkombinat is the interest group of club operators, promoters, bookers and agencies from Hamburg.
