26.02.2007

The paper describes the economic impact of music in Iceland and gives and account of the structure of the music industry and its management. Music is of significant importance for the Icelandic community. The discussion touches on the creative industries and accounts for the special position of music, as well as the strategic planning and social organisation that characterise the sector. The theoretical foundation is based on the methods of cultural economics and the methodology of the creative industries. The contribution of culture as a whole to the Icelandic GDP amounts to approximately 4%, and of this music accounts for approximately a quarter. Music fits very well in with the ideology of the creative industries. Porters five forces model is employed to describe the competitive position of enterprises in the musical industry in Iceland. The competitive position of Iceland in the music sector is analysed by the use of Porters Diamond.