Revenue of European creative industry flat at 198 billion

18 June 2015

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.

Scope of Study

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.


Total digital and non-digital creative sector revenues

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%.

Creative industry sector revenue by industry

Creative jobs
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.”

Jobs in the creative industry


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Grant Thornton advises on deal for high-growth cloud hosting firm

08 April 2019

Grant Thornton’s North West Corporate Finance team has completed its first TMT deal of 2019. The professional services firm advised the shareholders of Hosted Desktop UK on their investment from specialist SME lender Beechbrook Capital.

Technological disruption and changing consumer behaviour have continued to affect top Technology, Media & Telecommunications (TMT) players in recent years. The industry has seen revenues border on stagnation over the past decade, at 0.4% annual growth since 2008. While the industry is keen to develop new digital services and models to meet market challenges, they face a range of barriers – meaning the recruiting of talent specialising in innovative software and technology has become a key goal for the industry.

Amid this, Hosted Desktop UK (HDUK) provides cloud computing services to small and medium sized businesses across the UK. The firm’s cloud solutions provide businesses with IT reliability, flexibility, value for money and business continuity. As the firm bids to grow in the UK, with demand for its disruptive technologies high, HDUK has secured a key investment from specialist SME lender Beechbrook Capital.

Grant Thornton advises on deal for high-growth cloud hosting firm

The transaction was Beechbrook Capital’s maiden deal from its latest UK SME credit fund, which supports small and medium-sized businesses in the UK with EBITDA of £1 million and above. Manchester law firms Pannone Corporate (sell-side advice, led by Mark Winthorpe) and DWF LLP (buy-side advice, led by Jonathan Robinson) also advised on the deal, while Grant Thornton’s North West Corporate Finance team advised HDUK’s shareholders.

The deal represents the Grant Thornton branch’s first TMT deal of 2019, with a team comprised of Partner and Head of Corporate Finance Peter Terry, Manager Daniel Brecker and Assistant Manager Cariad Mudford advising HDUK shareholders on the investment. It is the third key deal in the TMT sector that the GT North team has advised on in the last 18 months, following the £16.5 million sale of Salford-based Sonassi to Iomart in December 2017 and NorthEdge Capital’s investment in Yorkshire company iPortalis in August 2018.

Grant Thornton’s Peter Terry said of the news, “As our domestic and working lives become ever-more technology dependent, it’s no surprise that there continues to be strong investor interest in any asset in the cloud computing, data infrastructure and connectivity space… We were pleased to work with Beechbrook Capital on the first deal in its new fund. It shows that despite the well-documented uncertainties in the economy there are still good funding options for dynamic SMEs and their management teams.”