Rebuilding Europe the Cultural and Creative Economy Before and After the COVID-19 Crisis
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Rebuilding Europe The cultural and creative economy before and after the COVID-19 crisis January 2021 About the partners and supporters GESAC’s partners for the study of the report Contents AEPO-ARTIS The European Grouping of Societies of Authors and Composers Association of European Performers Organisations (GESAC) commissioned EY teams to produce a report on the EUROCINEMA About the partners and supporters of the report 02 state of the cultural and creative industries (CCIs) in Europe. Association of European Producers What was their economic situation before the COVID-19 crisis? EUROCOPYA Executive summary 04 What impact has the crisis had on activity and employment? European Federation of Joint Management Societies of Producers for Private Audiovisual Copying And what are the main priorities for the sector to protect itself from the most serious consequences, to recover growth and EVA Editorials 08 enhance its value in the European economy? This study follows European Visual Artists a report of the same type, entitled Creating Growth, published FIAPF in December 2014. Before COVID-19 International Federation of Film Producers Associations 12 The full power of culture and creation GESAC has brought together numerous partners IMPALA 1 representing the CCIs, in order to reflect the diversity and Independent Music Companies Association collective strength of this economy. IVF International Video Federation The EY team would like to thank GESAC’s team, GESAC's Because of COVID-19 28 partners and the experts interviewed across Europe. GESAC SAA The sharp fall and EY would also like to thank ADAGP, BUMA, GEMA, SACEM, Society of Audiovisual Authors 2 SCAM, SIAE and SOZA for their contributions. Everyone's SROC contribution has been essential to the study. Sports Rights Owners Coalition After COVID-19 42 3 Rebuilding Europe About GESAC Supportive organizations Detailed methodology and main sources 50 GESAC comprises 32 authors’ societies from all over Europe, AER which together represent over one million creators and rights Association of European Radios holders – from musicians to writers, visual artists to film CEPIC directors and many more, in the areas of musical, audiovisual Coordination of European Picture Agencies and visual arts, and literary and dramatic works. Stock, Press and Heritage web: www.authorsocieties.eu EACA email: [email protected] European Association of Communications Agencies twitter: @authorsocieties ECSA European Composer and Songwriter Alliance EGDF European Games Developer Federation About the study’s team EPC European Publishers Council The study was carried out by EY Consulting, under the FEP supervision of Marc Lhermitte, with the participation of Hugo Federation of European Publishers Alvarez, Clémence Marcout, Quentin Nam and Enzo Sauze. FERA Federation of European Film Directors FSE/SCRIPT Federation of Screenwriters in Europe IFRRO Marc Hugo Quentin International Federation of Reproduction Lhermitte Alvarez Nam Rights Organisations IMPF Independent Music Publishers International Forum Clémence Enzo Marcout Sauze 2 Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis 3 Executive summary Rebuilding Europe : the cultural and creative economy Employment by sector in 2019 before and after the COVID-19 crisis (in million jobs; EU-28) Sources: Eurostat – Business Sector Profile; EY modeling and analysis 2020. EY 2021 Chemicals Construction 1.2 1. Before COVID-19 The full power of culture and creation Cultural and creative industries 7.6 12.1 At the end of 2019, the cultural and creative economy Turnover and added value in 2013 was a European heavyweight and 2019, and share of GDP Telecommunications 0.9 (in € billion and %, EU-28) • With a turnover of €643 billion and • Between 2013 and 2019, the 10 2.6 Automotive a total added value of €253 billion CCI sectors experienced varied but in 2019, the core activities of the constant growth rates: more than 4% +17% cultural and creative industries per year for video games, advertising, 643 Tourism (CCIs) represented 4.4% of EU GDP architecture and music; and between (4.4%) 10.7 in terms of total turnover. 0.5% and 3% for audiovisual (AV), 550 10.3 radio, visual arts, performing arts and (4.2%) • Therefore, the economic contribution books. Only the press suffered (-1.7%) of CCIs is greater than that of due to the difficult transition between telecommunications, high technology, print and online revenues. 1.3 pharmaceuticals or the automotive Utilities Transportation and logistics industry. • All the players point to a period of intense innovation – not only the • Since 2013, total CCI revenues have search for greater live or physical 213 253 increased by €93 billion and by experiences by spectators, readers, (1.6%) (1.7%) almost 17%. players or visitors but also the Digital experiences and online/offline distribution explosion in demand for online combinations have fueled the growth, but the market • At the end of 2019, CCIs employed content: 81% of internet users in the 2013 2019 8.4× continues to evolve more than 7.6 million people in EU used the internet for music, videos Added value Turnover more jobs than in the the EU-28, and they have added and games in 2018 – more than for telecommunications industry • In the last six years, the turnover invested heavily in innovation Sources: Eurostat; GESAC; professional generated by online cultural and digitization, both from a approximately 700,000 (+10%) jobs, shopping or social networking. organizations; EY modeling and analysis 2020. including authors, performers and content, services and works business perspective and in terms other creative workers, since 2013. grew by 11.5% per year. of production and customer 81% • Cultural enterprises have experience. of internet users in the EU used the historically been one of the first • Yet unbalanced relationships internet for music, videos and games to experiment and adopt digital with global platforms and CCIs in Europe have become more international and entrepreneurial technologies (digital photos, intermediaries on the internet digital carriers such as DVD and may compromise the financial • In 2019, the five largest EU-28 countries (France, Germany, • Over 90% of CCI companies are small- and medium-sized €8.6b Blu-ray, CDs, shooting digitally, viability, employment, innovation Italy, Spain and the UK) accounted for 69% of CCI total enterprises, and 33% of the workforce are self-employed – EU’s total trade balance in cultural streaming, virtual reality and and investments in the sector. revenue in the EU, but the strongest growth came from more than twice as many as in the European economy as a goods in 2019 online platforms). Cultural • For the stakeholders of the CCIs, Central and Eastern Europe. whole (14%). content have fueled the growth the challenges are numerous, and the development of the including the remuneration • In 2017, the EU exported €28.1 billion worth of cultural • Revenues originating from the public sector accounted for internet from the very beginning, of rights holders, the proper goods. The EU’s trade balance in cultural goods is in surplus only 10.8% of revenues in 2018, compared with 11.5% in 90% and still represent a high share of of CCI businesses are small functioning of the markets for (+€8.6 billion), and the share of CCI exports in total EU 2013. and medium sized broadband consumption. cultural and creative content, and exports was 1.5% – about the same as the surplus in trade • Since 2013, CCI companies the fight against illicit access to in food, drinks and tobacco (€9.1b in 2018). Sources: Digital Economy and Society Index (DESI); Business and organizations have protected works. Sector Profile, Eurostat; Cultural Statistics, Eurostat 4 Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis 5 Executive summary Rebuilding Europe : the cultural and creative economy before and after the COVID-19 crisis EY 2021 3. After COVID-19 How to rebuild Europe As a result of in-depth research and interviews conducted by EY teams, and based on the 2. Because of COVID-19 The sharp fall opinions of experts and organizations representing the CCIs, the following challenges have been identified as priorities for the recovery and growth of the creative economy: In 2020, the cultural and and music (-76%) are the most Total turnover generated by CCIs in creative economy lost impacted; visual arts, architecture, the EU-28 (in € billion) advertising, books, press and approximately 31% of its Challenge 1 – “Finance” Challenge 2 – “Empower” Challenge 3 – “Leverage” AV activities fell by 20% to 40% -31% revenues compared with 2019. The video Provide massive public funding Promote the EU's diversified Use the CCIs – and the multiplied games industry seems to be the only and promote private investment in cultural offering by ensuring a power of their millions of individual • The total turnover of CCIs in the EU- one to hold up (+9%). cultural and creative businesses, solid legal framework to allow and collective talents – as a major 28 is reduced to €444 billion in 2020, organizations, entrepreneurs and for the development of private accelerator of social, societal a net drop of €199 billion from 2019. • The crisis has hit Central and 643 creators – two indispensable levers investment in production and and environmental transitions in Eastern Europe the hardest (from to support and accelerate their distribution, providing the Europe. • With a loss of 31% of its turnover, the -36% in Lithuania to -44% in Bulgaria 444 recovery and transformation. necessary conditions for an cultural and creative economy is and Estonia). adequate return on investment one of the most affected in Europe, for businesses and guaranteeing slightly less than air transport • All sectors are affected: even those appropriate income for creators . but more than the tourism and that seemed to be protected by 2019 2020 (estimate automotive industries (-27% and -25% home consumption faced a sharp with the impact of respectively).