With digitalisation hitting hard in Europe’s creative industries, some commentators – in the face of new forms of digital distribution – called doom and gloom for the industry. The effects of digitalisation, while cutting the growth of non-digital content by 1% per year since 2003, has seen a corresponding rise of digital growth at 10% annually. With the total market growing a steady 1.2% over the past ten years, content creators have not been harshly hit – even while some middle men met with demise.
Digitalisation has had a profound effect on the creative industry. This industry, that for the longest time held dependence on physical media, has in recent years seen considerable changes. The effects of these changes have been wide ranging and deep going, with the digital music revolution transforming industry relations, while the recent development in periodicals has seen a shift from print to screen.
In a recently revamped Strategy& report, the management consultancy explores the affect digitalisation has had on the creative industry in Europe. The report goes someway to challenge the prevailing myth of digital erosion — the idea that online media and the accompanying “for free” culture have led to a slowdown in growth and a loss of jobs.
The report, titled ‘The digital impact of creative Europe’, looks broadly at the “creative industry” as the five creative industry subsectors: periodicals publishing (newspapers and magazines), book publishing, film and television, music, and electronic gaming. Excluded from this report is the wider artistic ecosystem and other enabling industries like advertising.
The revenue generated by the digitalisation of many of the creative industry has been significant. However, the industry as a whole has continued to enjoy relatively stable growth over the past ten years of 1.2% per annum between 2003-2013. Non-digital revenues have steadily fallen -1.0% over the period 2003 to 2013, digital growth has continued apace with an average 10.4% annually. Thus while the non-digital arm of the industry contracted from $155 billion to $140 billion, the growth of the digital arm by $36 billion saw a total of $22 billion in revenues added to the industry between the 10-year period.
In term of sector, there are clear winners and losers in terms of revenue – however, care must be taken as digitalisation has come with corresponding reductions in costs – thus a loss of revenue does not necessarily mean that the sector is in decline in terms of profits or creative output. The biggest winner within the creative industry has been gaming, which has grown almost $10 billion in revenue over the past 10 years, at an annualised rate of 12.0%. Gaming is followed by the TV and film segment that saw 3.0% growth over the period. The worst performer is periodical publishing, which has dropped from a height of $63.1 billion in 2007 to $48.9 billion in 2013, and had an annualised growth rate between 2003-2013 of -2.0%. The music industry too has seen a slowdown in revenues, at an annualised decrease of -2%.
With the changes toward a digital ecosystem the creative employment market has managed to stay relatively flat between 2003-2013. Employment in music stayed stable, while books and publishing shed around 9 thousand jobs. Periodic publishing has shed around 100,000 jobs, while film and publishing added 93 thousand in the period. While the industry hasn’t seen considerable job growth with digitalisation, a doom scenario of a significant crash has also not materialised.
There have however been considerable shifts within the various industries from for instance classical publishing and television sector jobs to new types of digital enabler businesses, including digital agencies and specialised technology service providers, which serve more traditional players as they themselves transition to digital business and production models. The authors note: “This movement has also given rise to a new generation of independent contractors, digital consultants, and creative freelancers, who value their independence and ability to pursue new opportunities in this rapidly evolving ecosystem.”