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Cultural timesThe rst globalmap of cultural andcreative industries

December 2015


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The study was carried out by EY, under the supervision of Marc Lhermitte, Bruno Perrin and Solenne Blanc, with the participationof Vincent Raufast, Hugo Alvarez, Joséphine Druesne, Mehdi Echiguer, Danielle Attias, Bonnie Olivier, Louisa Melbouci and GraemeHarrison (Oxford Economics).

We would like to extend our gratitude to the 150 experts interviewed worldwide, whose contribution has been essential to our studyand all CISAC partners, for their time and availability all over this project.

With the initiative to set up a project aimed at analyzing the cultural and creative markets in the world, CISAC, the InternationalConfederation of Authors and Composers Societies, commissioned EY to conduct this study. The project is the rst of its kind. CISACcollaborated with the following partners and supporters in an effort to rally a large segment of the representative organizations in thecultural and creative sectors for this unprecedented study.

Study supporters

“Globo” — Globo Comunicação e Participações S.A.

FCFA — Fonds Culturel Franco-Américain

Knowledge contributors

The World Bank

ICMP — International Confederation of Music Publishers

IFRRO — International Federation of Reproduction Rights Organizations

About CISAC

CISAC — the International Confederation of Societies of Authors and Composers — is the world’s leading network of authors’societies. With 230 member societies in 120 countries, CISAC represents four million creators from all geographic areas andartistic repertoires; music, audiovisual, drama, literature and visual arts. CISAC is presided over by electronic music pioneerJean-Michel Jarre and the organisation’s four vice-presidents are: Beninese singer Angélique Kidjo, Senegalese sculptor OusmaneSow, Indian poet, scriptwriter and lyricist Javed Akhtar and Argentinean lm director Marcelo Piñeyro.

Founded in 1926, CISAC is a non-governmental, not-for-prot organisation with headquarters in France and regional ofces inAfrica (Burkina Faso), Latin America (Chile), Asia-Pacic (China) and Europe (Hungary).

www.cisac.org | Twitter: @CISACNews | Facebook: CISACWorldwide.

Thanks

CISAC would like to thank for their personal contribution the members of the CISAC dedicated working group, as well asexecutives from CISAC member societies, and our study supporters and knowledge contributors:

Yohan BEAUX (SACEM), Andrew BERTHOFF (SOCAN), James BOYD (IFRRO), Coco CARMONA (ICMP), Mitko CHATALBASHEV(CISAC), Yassine DAMIL (SACEM), Graham DAVIES (PRS FOR MUSIC), Richard DAVISON (APRA AMCOS), Cristiane DELECRODE(GLOBO), Juliette DELFAUD (SACEM), Héloïse FONTANEL (SACEM), Laurence FOURCHET (SOCAN), Neil GAFFNEY (ASCAP),Marisa GANDELMAN (UBC), Dimiter GANTCHEV (WIPO), Claire GIRAUDIN (SACEM), Jenny GOODWIN (PRS FOR MUSIC), AndrewHARRIS (APRA AMCOS), Bronwen HARTY (SAMRO), Ger HATTON (ICMP), Anita HUSS-EKERHULT (IFRRO), Laure KALTENBACH(FORUM D’AVIGNON), Clarissa KEDE (GLOBO), Eglantine LANGEVIN (FCFA), Ophira LUBNITSKY (TALI), Blaise MISTLER (SACEM),Martin MOLINUEVO (THE WORLD BANK), Silvina MUNICH (CISAC), Benjamin NG (CISAC), Eloïse NIKIEMA (CISAC), AlejandraNorambuena Skira (FCFA), Gadi ORON (CISAC), Balamine OUATTARA (CISAC), Luis Felipe PALACIOS (SGAE), Frédéric PATISSIER

(IMV Conseil), Cécile ROY (CISAC), Damien SHIELS (THE WORLD BANK), Petra STEPHENSON (PRS FOR MUSIC), Olav STOKKMO(IFRRO), Santiago SCHUSTER (CISAC), Julie TODISCO (FCFA), Liudmyla TSYMBAL (UACCR), and Miguel VOCES (SGAE).


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Contents

90

8 10

30 82

14

1Executive summary

IntroductionThe global map of cultural andcreative industries

Overview and megatrendsThe economic value of cultural and creativeindustries worldwide

2Cultural and creativeindustries in ve regions

3OutlookChallenges of a morecreative world

4Cultural and creativeindustries at a glance94

5Voices from the

cultural and creativeindustries community

114

6Detailed methodologyand sources


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F o r e w o r d s

Cultural times | The rst global map of cultural and creative industries4


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UNESCO

As we celebrate the 10th anniversaryof the UNESCO Convention on theProtection and Promotion of theDiversity of Cultural Expressionsratied on 20 October 2005, this studycommissioned by the InternationalConfederation of Societies of Authors

and Composers conrms the powerfulargument advocated by UNESCO of thecontribution of the cultural and creativeindustries to sustainable development.

Capitalizing US$2,250b and nearly30 million jobs worldwide, the culturaland creative industries are major driversof the economies of developed as wellas developing countries. Indeed, theyare among the most rapidly growingsectors worldwide. It inuences incomegeneration, job creation and exportearnings. It can forge a better future for

many countries around the globe.

But that is not all there is to it. Forunlocking the potential of the culturaland creative industries also meanspromoting the overall creativity ofsocieties, afrming the distinctiveidentities of the places where it ourishes

and clusters, improving the quality of lifeand providing resources for imaginingdiverse new futures.

In other words, in addition to itseconomic benets, the cultural andcreative industries generate non-monetary value that contributesignicantly to achieving people-centered, inclusive and sustainabledevelopment.

Public policies are needed to support thediverse forms of creativity at the heart ofthe cultural and creative industry sectorsas well as to address new challengesposed by digitization.

Convention on the Protection andPromotion of the Diversity of CulturalExpressions is taking action to promotethe relevance is key principles of the

Convention in the digital age. Thisconstitutes a central challenge aheadof us: balancing all interests and thevaried ways in which diverse culturalexpressions are expressed, augmentedand transmitted, whatever the meansand technologies used.

This calls for more data and strongerindicators on the role of culture forthe development of societies. This isthe spirit of many UNESCO initiatives,such as the Culture for DevelopmentIndicators, the 2013 United NationsCreative Economy Report, as well as

the rst Global Report to monitor theimplementation of the 2005 Convention.I welcome the publication of this newglobal map of cultural and creativeindustries as an important contributionto this global effort.

Irina BokovaDirector-General of UNESCO

Cultural times | The rst global map of cultural and creative industries 5


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CISAC Presidency

In our capacity as President and VicePresidents of CISAC (Confederationof Authors and Composers Societies),we are the ambassadors of millions ofcreators around the world whose creativeendeavors cover all repertoires — music,audiovisual, drama, literature and visual

arts — and carry the torch of this culturaldiversity that we cherish so much. Weknow, by experience, that art knowsno boundary: it is the expression ofthe many different cultures on the vecontinents. At the same time, we are alsovery much aware of the fragility of thestatus of creators in today’s world.

This study maps out the macro economyof creative industries in the world,continent by continent. This is the rsttime we have access to such a wealth ofdata. These facts and gures make for

a very interesting tapestry. What rstcaught our eyes was the great dividebetween North and South. In developedeconomies, creative industries thrivebecause of a legal framework protectingthe rights of creators, allowing forindustries to be built from the works ofthousands of creators.

This is a situation that does not apply inmany developing countries. The culture

in these countries is no less richer, yetthe creators themselves are often poorand struggle to make a living from theircreativity and contribute to the domesticeconomy.

We do hope that this study will be aneye opener for policy-makers around theworld on the importance of providingtheir creative community with a stronglegal apparatus to protect rights andallow for a fair remuneration of creators.Creators’ rights do not stand in the wayof the economy, quite the contrary.They help build sustainable economies,they provide local jobs, they generaterevenues and taxes, and they allow awhole class of people, many of themyoung, to make a living from their talent.

And that’s the other point that wewould like all of those who will read thisstudy to take into account: never forgetthat behind this massive aggregate ofimpressive gures, there are individualcreators. Each and every one of themmakes a unique contribution to theoverall economy in his or her countryin addition to providing the world withcreative works that touch the souls oftheir fellow human beings.

Jean-Michel JarrePresident

Angélique KidjoVice-President

Ousmane SowVice-President

Javed AkhtarVice-President

Marcelo PiñeyroVice-President



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EY

Marc LhermittePartner, EY Advisory

Undeniably, culture and creativity havebeen the cement that binds togethernot only hearts and souls, but entiresocieties and nations. In a worldthat faces frequent disruption andupheavals — economic, social, politicaland technological — creativity and culture

have been the common link throughhistory, knitting together our past,present and future.

But culture and creativity are actuallymuch more than that. They are catalystsfor development. They are an economy —nearly 30 million people across the worldmake a living out of them, generatingtotal revenues of US$2,250b.

The momentous impact of thecultural and creative industries (CCI),however, is only partially understoodand appreciated. EY’s global map is agroundbreaking initiative to bring to thefore their economic and social power.Initiatives of think tanks, such as theForum d’Avignon, bringing togetherartists, industries and policy-makers havehelped understand the economic weightof CCIs.

Besides the economic weight of cultureand creativity, our report shows the

locomotive of the digital economy. In2013, they contributed US$200b tothe digital economy. The major internetgiants of the world have emergedthrough and due to creative content,obviously. CCI are also a signicant driverfor urban development: cultural heritage,

activities and events are accelerators ofgrowth and attractiveness. Creators areentrepreneurs too: in the US, they are3.5 times more likely to be self-employedthan US workers overall.

CCI are undoubtedly strong pillars of theglobal economy, but fragile if not takencare of. Governments worldwide areawakening to the true economic valueof CCI, but challenges to their growthabound. CCI need more structuring,supportive policies and robust protectionof creative content. To boost their

economic potential, the balance betweencreation, access (distribution) and careof cultural heritage is a must. We hopethis unique report will support a betterunderstanding of these challenges, andhow to address them effectively for thelong-term development of creativity andculture.

unique diversity of these industries.And some challenges too. Consider, forinstance:

• Asia-Pacic is the world’s largest CCImarket, generating a third of totalrevenues, followed closely by Europeand North America. Latin America,and Africa and the Middle East rankfourth and fth, respectively — but thepotential and opportunities in thesetwo regions is striking.

• In Europe, CCI sectors typicallyemployed more people aged 15-29years than any other sector.

• While some would have feared thatdigital economy would standardizeculture and creation, the impact ofdigital is actually the opposite: thedigital economy is accelerating the

diversity of culture and creation.

• Although exceptions to the ruleexist, the crucial role of women inCCI’s development must be betterappreciated and rewarded.

Our research also highlights how CCIplay a decisive role for the economicdevelopment of both mature andemerging markets. They are already a

Solenne BlancExecutive director, EY Advisory

Bruno PerrinPartner, EY & Associés



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Executive summary

Cultural and creative industries (CCI) generate US$2,250b ofrevenues and 29.5 million jobs worldwide

CCI revenues worldwide exceed those of telecom services (US$1,570b globally), and surpass India’sGDP (US$1,900b). Within the total, the top three earners are television (US$477b), visual arts(US$391b), and newspapers and magazines (US$354b). With 29.5 million jobs, CCI employ 1% ofthe world’s active population. The top three employers are visual arts (6.73m), books (3.67m) andmusic (3.98m).

The cultural and creative world is multipolar

Asia-Pacic accounts for US$743b in revenue (33% of global CCI sales) and 12.7m jobs (43% of CCI jobsworldwide). The Asian market is driven by a large population, and the region is home to CCI leaders, suchas Tencent, CCTV and Yomiuri Shimbun. Europe and North America are the second and third largest CCImarkets. Today Latin America, and Africa including the Middle East rank fourth and fth, respectively —but CCI players see great development opportunities in these two regions. Though symbiotic, each worldregion is developing a momentum of its own.

Cultural and creative content drives the digital economy

CCI are a locomotive of the online economy — contributing US$200b to global digital sales in 2013.Cultural and creative content also powers sales of digital devices, which totaled US$530b in 2013. Digitalcultural goods are, by far, the biggest revenue source for the digital economy, generating US$66b of B2Csales in 2013 and US$21.7b of advertising revenues for online media and free streaming websites.

Cultural production is young, inclusive and entrepreneurial

Creative activities contribute signicantly to youth employment and careers in CCI are relatively opento people of all ages and backgrounds. In Europe, CCI sectors typically employed more people aged15–29 years than any other sector. Creative industries also tend to favor the participation of womencompared with more traditional industries. Statistics compiled by the UK Government showed thatwomen accounted for more than 50% of people employed in the music industry in 2014 (vs. 47% inthe active population overall). Moreover, creation is driven by small businesses or individuals, givingrise to agile and innovative employers. More than half (53%) of Canadian gaming developers say they

are independent operators. In the US, artists are 3.5 times more likely to be self-employed than USworkers overall.



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Culture boosts cities’ attractiveness

World-class cultural infrastructure is a catalyst for urban development: building a museum often offersopportunities to engage in large urban development projects and to develop a new “city brand” aroundcultural and creative industries. Such agship projects boost a city’s attractiveness for tourists, talent andhighly skilled workers. Bilbao, in Spain’s Basque Country, is now an icon of culture-led urban regeneration:construction of the Guggenheim Museum led to the creation of more than 1,000 full-time jobs, andtourist visits have since multiplied eight-fold. Equally important, CCI make cities more livable, providing

the hubs and many of the activities around which citizens develop friendships, build a local identity andnd fulllment.

The informal economy is a vast reservoir of jobs

Informal CCI sales in emerging countries were estimated to total US$33b in 2013 and to provide1.2 million jobs. Performing arts are the biggest employers in the informal economy, providing unofcialmusic and theater performances (street performances, festivals and concerts that do not pay authors’rights, private performances at marriages and funerals, etc.), which are often free for audiences. In

Africa, these performances are sometimes funded by individual sponsors.

Leveraging a more creative world

• Promoting author’s rights: If we want authors and creators to continue creating culture andpromoting cultural diversity, they must be compensated fairly for the use of their works. The currentfailure to properly reward creators is limiting CCI revenues, and holding back their growth and ability togenerate job creation.

• Looking for growth: As companies chase the scale needed to exploit their best content ideas acrossglobal markets, consolidation is back in vogue. EY’s 2015 Media & Entertainment Capital CondenceBarometer shows that 50% of CCI companies expect to pursue acquisitions in the next 12 months.

• Pursuing global expansion: Mature markets remain the most attractive for investment by CCIcompanies and organizations. Nonetheless, China and India are the emerging markets of choice formany executives, drawn primarily by their strong growth and massive long-term potential.

• Balancing online monetization: CCI players face two difculties: trying to persuade consumers topay for something they may have been accessing for free, and extracting a fair share of the valuegenerated by cultural content, which has been largely captured by online intermediaries. The problemof a value chain distorted in favor of internet intermediaries needs to be addressed by policy makersacross borders, so that the internet becomes a fair-trade place for creators and their works.

• Nurturing talent: Talent is the lifeblood of cultural and creative industries. According to urban

economist Richard Florida, the “creative class,” including designers, artists and high-skilled intellectualworkers, acts as an engine of innovation and urban development, structuring creative hubs andnetworks for the economic, social and cultural development of their native cities and regions.



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I n t r

o d u c t i o

n



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The global map of cultural andcreative industries

An unprecedented initiative

The world has a shared history anda rich, diverse cultural heritage. Thisheritage is cherished globally as anasset that belongs to us all, yet gives oursocieties their identity and binds themtogether, nurturing a rich cultural andcreative present and future. That is whystakeholders of the creative and culturalworld must do everything in their power

to preserve this heritage and the diversityof actual cultural content, amid a politicaland economic climate that is subject tomajor upheavals.

The idea behind this report is that theeconomic weight of cultural and creativeindustries (CCI) in mature and emergingeconomies is partially described,misunderstood and undervalued. Thisis why the International Confederationof Societies of Authors and Composers(CISAC — the body representingauthors’ societies worldwide) — decided

to commission a global study of theeconomic and social impact of CCI,focusing especially upon revenues andemployment. The study has the followingobjectives:

• To produce a comparative,quantitative and qualitative analysisof cultural and creative industries

• To understand the overall economicrole of CCI globally, by sector andby region

• To put these analyses into perspectiveagainst the past, current and futureeconomic situation

• To show how, and to what extent,CCI may be a driving force for global

economic growth

• To produce a comprehensive reportwith examples of the diversity andcomplexity of CCI worldwide

This study encompasses a wide rangeof creative activities combining thecreation, production and distribution ofcultural content. Unlike other studies,we have included all activities related tothe performing arts (including dance,opera, ballet and live music) and visualarts (museums, visual arts creation, art

market and design activities). In addition,EY’s study is the rst to separatelyassess the economic value of each CCIindividually, and at a global level.

The result of in-depthcollaboration

The study was conducted by EY, whichhas recognized involvement and

experience in cultural, creative, mediaand entertainment industries worldwide.The EY project team was supported bythe rm’s global network of professionals,providing access, insights and expertiseon this wide-ranging study.

All estimates and qualitative trendsdetailed in this report arise from long-

standing collaboration:• The study involved 150 interviews

to identify megatrends and regionalpeculiarities.

• More than 300 sources were reviewedto develop the economic assessment.

• The valuation methodology andestimates were reviewed in depthby senior economists from OxfordEconomics.

• The study was overseen andcoordinated by a working group

of methodology and CCI experts(including CISAC, authors’societies, the World IntellectualProperty Organization (WIPO) andThe World Bank).

CCI analyzed in 11 sectors and 5 global regions

UNESCO denes cultural and creativeindustries as activities “whoseprincipal purpose is production or

reproduction, promotion, distribution orcommercialization of goods, services and activities of a cultural, artistic orheritage-related nature.”

CCI: a wide range of cultural and creative activities in 11 sectors

Advertising Advertising agencies Music Sound recording and musicpublishing industry, live music

Radio Radio broadcasting activities

Architecture Architectural rms Movie Motion picture production,post-production anddistribution

TV TV programming, productionand broadcasting includingcable and satellite

Books Physical and digital books sales(including scientic, technical

and medical books)

Newspapersand

magazines

Newspapers and magazinepublishing industry (B2C and

B2B, news agencies)

Visual arts Visual arts creation, museums,photographic and design

activitiesGaming Video game publishers,

developers and retailers;equipment sales

PerformingArts

Performing arts activities:dance, theatre, live music,opera, ballet, etc.



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Measuring economic value by revenues and employment

Composition of the ve global regions

Our assessment method (based on the most robust data available) provides regional estimates, for CCI sales and revenues,calculated from regional data and based on strong economic and sociologic assumptions. Hence, this methodology(see section 5) does not enable us to provide CCI sales and revenues at a country-level.

The study quanties the economic valueof CCI (in US$), providing an assessmentof CCI revenues (dened as Business-

to-Consumer — B2C, and Business-to-Business — B2B, sales) and the number ofpeople employed in CCI.

Revenues and employment

We measured the economic value of CCIwith two metrics:

• Cultural and creative industriesrevenues (in 2013 current USD): Thestudy adopted an approach basedon nal consumer and businessmarkets (B2C and B2B), primarily at

retail prices (without indirect taxes).Informal sales, dened as cultural

goods and services sold throughunofcial distribution channels byproducers and retailers, are included

in our estimates. We have alsoincluded public license fees for theaudiovisual sector (TV and radio).

• Cultural and creative employment:This was estimated in the number of

jobs. We used the ILO (InternationalLabor Organization) denition ofemployment: “all persons … who duringa specied brief period, either oneweek or one day, were in the followingcategories: paid employment and self-employment.” By doing so, we are ableto include every person working in a

CCI (including non-permanent jobs,creators, authors and performers).

Underground economy

The underground economy is dened as

“market-based production of goods andservices, whether legal or illegal, thatescape detection in the ofcial estimatesof GDP” (Smith, 1994). Applied to CCI,the underground economy involves theexchange of cultural and creative goodsand services that are hidden from ofcialview. It includes:

• Piracy: physical piracy, i.e., the activityof manufacturing unauthorized copies(pirate copies) of protected materialand dealing with such copies by wayof distribution and sale; and digital

piracy, i.e., unauthorized internetdistribution of protected works

Africa and

the Middle East

Africa, Gulf countries and

Middle East (including Israel)

Latin America and

Caribbean

Mexico, South America,

Central America and

Caribbean countries

European Union, non-EU European countries (Norway, Switzerland,

Iceland, Balkans, etc.), Turkey and Russia. Central Asian countries

(Kazakhstan, Uzbekistan, etc.) and Israel are not included

Europe

Including Central Asia

and Caucasian countries

(Azerbaijan, Armenia

and Georgia)

Asia-Pacific

US and Canada

North America



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• The informal economy: supply ofgoods and services in exchange forpayment, but which is not coveredor is insufciently covered by formalarrangements

In our estimates of CCI revenuesand jobs, we included the informaleconomy, as dened above, and thesale of unauthorized cultural goods and

services (unauthorized book copies,pirated recorded music, etc.). Becausethe impact of digital piracy on CCI is aloss of revenues, and not a monetarytransaction, we did not assess the globalimpact of digital piracy on CCI salesand revenues (this does not imply thatpiracy is not a stream of revenues fromillegal retailers).

Digital economy

We also consider the impact of CCI onthe digital economy. Digital players

(online retailers, streaming platforms,etc.) are fueled by CCI content. As this

report aims to highlight the impact ofCCI on other branches of the economy,we assessed the revenues generatedby cultural content for digital players,dened as companies providing:

• Physical goods sold on the internet(books, music, games and video)

• Digital cultural content (ebooks, music,video, games)

• Online media advertising (for onlinemedia and free streaming services)

• Digital advertising creation

CCIs’ economic contribution to the digitaleconomy is the sum of cultural-content-generated revenues.

Methodology and assumptions

Because reliable aggregated statisticaldata was unavailable, the team adopteda “bottom-up” approach for this study.

Estimates for each region were based onnational statistics, market research, CCI

studies, industry reports and interviewswith approximately 150 stakeholdersand experts. Our approach andassumptions have been validated byOxford Economics experts.

In most cases — and particularly forglobal estimates of markets andemployment — 2013 statistics werethe most recent available.

Double counting

Totals for jobs and revenues have beenestimated after the removal of doublecounting: the sum of sector gures(employment and jobs) exceeds theconsolidated gure in each regionbecause some activities can be countedin two CCI. For instance, live musicrevenues and employment are countedin both music and performing arts.To consolidate our regional gure, wehad to deduct every activity that is

double counted.



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O v e

r v i e w a n d

m e g a t r e n d

s

The

economicvalue ofcultural andcreativeindustriesworldwide



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In 2013, cultural and creative industriesworldwide generated revenues of US$2,250band employed 29 million people

The 11 CCI sectors are an integral, massive and universal cornerstone of the global economy. In 2013, theygenerated US$2,250b of revenues (3% of world GDP) and 29.5 million jobs.

Global CCI markets Global CCI employment

US$2,250b 29.5 million

Within the 11 sectors, two patterns stand out:

• Mass, versus nimbleness: Visual artsand television are the heavyweights,accounting for more than a third ofthe economic value generated byCCI (39% of sales and 35% of jobs).With just 6% of CCI workers and 4% ofCCI sales, radio and gaming are thesmallest CCI sectors, but are evolvingin dynamic markets.

• Revenue versus labor intensity: Advertising, newspapers andmagazines, and architectureare CCI with greater revenues

(38% of CCI sales) relative to employeenumbers (only 22% of CCI jobs). Onthe other hand, with 46% of jobs butonly 17% of revenues, music, movies,the performing arts and books arethe biggest job generators. Yet,labor-intensive CCI include a highproportion of non-permanent workersand creators. In the music industry,60% of workers are authors andcomposers, which explains the highnumber of jobs compared with therevenue gure.

Television tops the charts: CCI sectors by revenue (US$b) and jobs

CCI sectors Revenues(2013, US$b)

Employment(2013, number of jobs)

Television 477 3,527,000

Visual arts 391 6,732 000

Newspapers and magazines 354 2,865,000

Advertising 285 1,953,000

Architecture 222 1,668,000

Books 143 3,670,000

Performing arts 127 3,538,000

Gaming 99 605,000

Movies 77 2,484,000

Music 65 3,979,000

Radio 46 502,000

Total (before removing double counting) 2,285* 31,524,000*

Total (minus double-counting) 2,253 29,507,000

Source: Cultural times: the rst global map of cultural and creative industries, EY, 2015

* Rounded gure



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CCI by region: a complex andcolorful canvas

• Asia-Pacic (APAC) is the world’sbiggest CCI market, generatingUS$743b of revenues (33% of globalCCI sales) and 12.7 million jobs(43% of CCI jobs worldwide). Themarket has the largest consumerbase. It is home to some CCI leaders —Tencent, a key player in games and

instant messaging, had consolidatedrevenues of US$20b in 2013,while Japan’s Yomiuri Shimbun,the world bestselling newspaper,prints 10 million copies a day. TheIndian book industry became the10th largest book market in 2014,and will see the fastest growthglobally in total books revenue. APACconsumers are particularly keenon newspapers and video games(14.2 and 0.7 percentage pointsabove the global average).

• Europe is the second-largest CCImarket, accounting for US$709b ofrevenues (32% of the global total)and 7.7 million jobs (26% of all CCI

jobs). Europe’s cultural economy isrooted in its history: the region enjoysa unique concentration of heritageand arts institutions. However,Europe also remains a trendsetteron the global stage. For instance,the UK is a leader in the art market,

especially due to its contemporaryart, and French company Publicis isa key player in the global advertisingindustry. Seven of the 10 most visitedmuseums in the world are European(three in Paris, two in London) and30 of the 69 UNESCO “CreativeCities” are European. The Europeancultural economy also relies on awell-structured ecosystem with thepresence of big CCI players (WPP

Group, Pearson, Axel Springer,Universal, Ubisoft and others).

• North America is the third-largest CCImarket with revenues of US$620b (28%of global revenues) and 4.7 million jobs(16% of total jobs). The North Americanmarket is powered by leading culturaland entertainment players: the regionis the largest market for TV (US$182b),movies (US$28b) and radio (US$21b).North America is also at the forefrontof the digital transformation, withthe largest number of consumers of

digital cultural content [47% of digitaldistribution and revenues, ahead ofAsia (25%) and Europe (24%)].

• The Latin American CCI economygenerates US$124b in revenues(6% of CCI global market) and1.9 million jobs (7% of total CCI jobs).Latin America and the Caribbeanregion possesses a rich cultural andnatural heritage, with 131 sitesinscribed on the World Heritage List,

and many Latin American writershave achieved global acclaim. Theregional CCI market is also gainingtraction. Multi-media conglomerates,such as Grupo Globo in Brazil, GrupoTelevisa in Mexico and Grupo Clarin inArgentina, own a spread of TV, radioand press interests, capturing largeaudiences and producing distinctiveTV programs.

• Africa and the Middle East achieves

US$58b in revenues (3% of thetotal) and 2.4 million jobs (8% oftotal CCI jobs). African music hasbeen central to the development ofpopular music in North and SouthAmerica and even Europe. Today,African societies contain culturalriches that are bubbling up to embracethe opportunities offered by newtechnologies and commercial markets.Film production and viewing are nowdriving employment growth in theCCI, with striking successes such as

the rise of Nollywood, the Nigerianlm industry, which is now reckonedto directly employ 300,000 people.Yet, the African market is poorlystructured and cultural goods arelargely provided though the informaleconomy, which is believed to employ547,500 people and generateUS$4.2b in revenues.



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Big in the north: CCI strongpoints**

Europe

7.7mUS$709brevenue jobs

3% of regional GDP

APAC


3% of regional GDP

North America

4.7mUS$620brevenue

1

2

jobs

3.3% of regional GDP

Africa and the Middle East



Latin America andthe Caribbean



3

5

4

Source: Cultural times: the rst global map of cultural and creative industries, EY, 2015

** Rounded gures



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Young, gifted and entrepreneurial

Cultural and creative workers stand outfrom the crowd, displaying four particularqualities:

• Youth: Creative activities contributesignicantly to youth employment.In Europe, CCI sectors typicallyemployed more people aged 15–29years than any other sector (19.1%of total employment in CCI vs. 18.6%

in the rest of the economy) in 2013.In Central and Eastern Europe, onaverage, young people account for1.3 percentage point more jobs in thecreative economy than in the economyas a whole.

• High productivity: CCI jobs in somesectors contribute more to GDPthan the economy-wide average.In China, the lm and televisionsector generated 78% more addedvalue per worker than the rest ofthe economy in 2011, according to

Oxford Economics. In South Korea,the productivity of lm and televisionworkers is twice the national average.

• Independence and entrepreneurship: CCI have always been fragmented, andcreation driven by small businessesor individuals. More than half (53%)of Canadian gaming developers saythey are independent operators. Inthe US, artists are 3.5 times morelikely to be self-employed than USworkers overall. The internet, digital

technologies and mass travel havelowered entry barriers, making itfar easier for an individual to start acreative or cultural business, and gaina global audience and reputation.

• High level of education: CCI workersare typically more educated than theaverage. In Brazil, CCI workers had17% more years of education than thenational workforce average in 2010.

Toward better access for womento cultural employment

With US$2,250b revenues in 2013and 29.5m jobs, the creative economyappears to be a powerful developmenttool in general. More specically, it givesan idea of the sector’s potential to offereconomic opportunities to women.

In many countries, creative industriestend to favor the participation ofwomen compared with more traditionalindustries. Statistics compiled by theUK Government showed that womenaccounted for more than 50% of peopleemployed in the music industry in2014 (vs. 47% only in the whole activepopulation).

However, this is not the norm for allcreative sectors or job categories withinthose sectors. For example, in 2014,women comprised 17% of all directors,writers, producers, executive producers,editors and cinematographers working

on the top 250 (domestic) grossing lmsin the US. This is the same percentage ofwomen working in these roles in 1998.1

Important issues include women’s accessto participation in the cultural andeconomic life of their society, accessto credit and investment capital fortheir projects, and access to propertyrights. These issues exist within a moregeneralized set of difculties thatcreators face when attempting to secureequitable remuneration for their work:respect for their moral rights, contractnegotiation under conditions of extremepower asymmetries, securing nancialbacking for creative projects, and thegeneral precariousness of labor contractsin many sectors of the CCI. For thevast majority of women creators, thesedifculties are amplied as they intersectwith the realities that women face whenattempting to gain access to economicparticipation.

In many developing countries andtransition economies, women creatorsare more likely to be found in craftsand the visual arts. However, for a largepercentage of countries — particularlythose with weaker intellectual propertyframeworks — this sector is the leastlikely to have a functioning system ofregistered copyrights or designs, orstrong institutional support. The result isoften an unreliable source of income andno ability to claim attribution when worksare appropriated by third parties.

1 The Celluloid Ceiling: Behind-the-Scenes Employment of Women on the Top 250 Films of 2014



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Cultural and creative industries fuelthe whole economy

Comparing CCI with otherindustries shows the width anddepth of the creative economy

CCI sales worldwide exceed those oftelecom services (US$1,570b globally)and surpass India’s GDP (US$1,900b).With 29.5 million jobs, CCI employ 1%of the world’s active population. CCIhave more workers than South Korea(26.6 million people), or the combined

population of Paris, New Yorkand London.

Cultural and creative contentdrives demand for electronicsand digital devices

Individuals increasingly expect to accesscultural content on every availabledistribution channel in an “any timeanywhere any device” mode, feedingtheir appetite for smarter devices andhigher bandwidth. Electronics sales and

telecoms spending rely heavily upondemand for cultural goods and content.New forms of cultural content, developed

Big by any measure

Revenues (US$b) in 2013 Employment (2013)

CCI 2,250 29.5 million

Industries Telecom services

1,570

Automotive industry in Europe,the US and Japan combined

25 million

Countries India’s GDP

1,900

South Korea’s workforce

26.6 million

Sources: Cultural times: the rst global map of cultural and creative industries, EY, 2015; World DevelopmentIndicators — The World Bank, 2015; Thomson Reuters (2015), Walmart (2015), Telecommunications servicesreport, Ibisworld, 2014; Advanced industries, McKinsey, 2013

for digital platforms, have emerged toboost creativity and online innovation.

Consequently, cultural content, goods

and services have a direct impact on

the sales of electronic devices used toenjoy them (tablets, e-readers, TV, DVDplayers), which amounted to US$532b in

2013. Content availability drives sales ofboth culture-dedicated devices (TV sets)and of multi-functional devices (tablets,

smartphones) used to access culturalgoods and services. Cultural content isalso the key driver of the demand forhigh-bandwidth telecoms services (4Gand 5G networks, ber optic link, etc.).

Similarly, consumer electronics pushthe demand for new cultural content,

allowing for the further development ofcontent (videos, gaming, etc.).

Culture-related consumer electronics global sales in US$b, 2013

Allan SimonsenGaming industry representative in Asia

Co-founder, Boomzap Entertainment

“Smartphonesand tablets arethe future for thegaming industry. InAsia, smartphone

penetration hasincreased by 70%between 2013and 2014”

E-readers

Tablets

Smartphones

Global cultural consumer devices

283.5

193.2

54.7

0.9

532.3 Total

Source: Global consumer electronics manufacturing, IbisWorld, 2015; ABI research (2014); GfK (2014)



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CCI contributed US$200b to thedigital economy in 2013

Digital cultural goods are, by far, thebiggest revenue source for the digitaleconomy, generating US$66b of B2Csales (ebooks, music, video, games)in 2013 and US$22b of advertisingrevenues for online media and freestreaming websites such as YouTube.

Cultural goods and event tickets are

increasingly sold on internet platformsvia e-retailers and online classieds,generating US$26b in sales and drivingthe growth of the online economy.

Online advertisements provided US$85bin revenues for advertising agencies in2013. The online migration is drivingagencies to develop new skills in video,content production and storytelling.

Authors’ rights and digitaldevices: private copying levies

are a trending topicPrivate copy exceptions to authors’rights/copyrights and neighboringrights constitutes the only efcient andoperational way to transfer part of thevalue created by cultural works fromdigital players toward the creators ofthese works.

Private copy is a legal concept inventedin Germany in 1965, at the time whenmagnetic copying machines (for music)were invented and people would buy

them to copy music from the radio fortheir personal use.

The Germans created an exception toauthors’ rights by which creators waivetheir right to authorize/forbid the use

The wellsprings of digital revenue, US$b, 2013

of their works, in exchange for a faircompensation (a fee taken on eachcopying device), thus allowing the publicto legally copy their works for their ownuse. It benets both the public and themanufacturers of copying devices (as thedevices would have much less interestwithout creative works to copy) whilenot neglecting the need to compensatecreators for the use of their rights.

The private copying levies system

proved adaptable and was, therefore,adopted in many countries; 52 countriesworldwide have a private copy exceptionnowadays, including Burkina Faso andAlgeria. It proves particularly efcientin the digital age, where blank copying

devices (such as CDs and DVDs) andstorage capacities on phones, tabletsand computers and are massively usedto copy cultural works.

The challenge is that in many countriesthis system does not exist. In othercountries acts of private copy arepermitted but no compensation isgranted to creators (the UK). Thismeans billions of dollars or euros lostfor creators whose works are copied forpeople’s use and entertainment withoutany compensation.

26.3

65.6

21.7

85.1

Digital advertising creation

Advertising revenues for online media

and free streaming websites

Digital cultural content B2C sales

Physical cultural goods sold on

the internet

Total198.6

Source: EY analysis, MAGNA GLOBAL (2015), Thomson Reuters (2015, YouTube (2015), Dailymotion (2015),Spotify (2015)



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Authors’ rights/copyright can beexercised either via individualdirect licensing (e.g., a music

producer negotiating the priceof their catalogue with anonline music service) or throughcollective management.

Collective management cameto being as an economic answerto the challenges presentedby many-to-many markets: itis impossible for each author/composer to deal directly with eachuser of their work, to give themauthorization to use their works

and get remuneration. For instance,SACEM, the French music collectivesociety, has 153,000 membersand 500,000 users. It could bepractically impossible for each ofthese members to negociate orenter into a licence agreement withevery potential licensee. Collectivemanagement organizations (CMOs)are generally ruled by creatorsthemselves, to be both the interfacebetween them and the people using

their works. CMOs are workingas cooperatives, where they canassemble their works to get betterbargaining power with users (mediaoutlets such as TV, radio, internet,digital companies, theaters, concerthalls, etc.)

The rst CMO to be created wasSACD in France in 1777. Thereare now more than 200 such

CMOs representing all types ofrepertoires and four million creatorsworldwide forming an efcientnetwork through CISAC. Theirprimary goal is to manage economicrights and collect and distributeremuneration to creators for theuse of their work. CMOs also workto create a sustainable environmentfor the development of copyrightand authors’ rights to foster andencourage the development of

cultural diversity, and to promotethe dissemination of creativerepertoires worldwide.

CMOs are particularly well-adaptedto the negotiating of rights in thedigital era as they provide a one-stop-shop to get licenses for theDigital Sound Programmes (DSPs)for a large number of works, thusfostering legal security as well assimplicity. For creators and artists,they provide platforms to manage

nano/micro payments and paymentsfor the use of their works worldwide,and ensure that all repertoires aretreated equally — essential to ensurethat cultural diversity has the meansto blossom.

Protecting authors’ rights and sharingvalue: what is collective management?



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Creative industries and culturaltourism have become strategicassets for local economies

The number and scale of cities continueto grow across the globe — driven byrapid urbanization in emerging marketsand continued urbanization in maturemarkets. According to the United Nations(UN), 54% of the world’s populationnow lives in cities, and by 2050, thisproportion will increase to 66%. In 2010,36% of Africans lived in cities; by 2030,half the continent’s population will beurban, and by 2050, 6 out of 10 Africans

are expected to be city dwellers.

The lure of culture

A rich cultural life has become amajor asset for countries seekingto attract corporate executives andtalented employees — who are typicallykeen consumers of culture andentertainment — as well as culture-driven tourists. Developing culturalinfrastructure is especially important foremerging countries, which will attractmore than half of international tourists

by 2030.

Some cities are deliberately developingcultural zones. Examples include theZorlu Center near Istanbul, Odaiba inTokyo, West Kowloon Cultural Districtin Hong Kong, NDSM in Amsterdamand Stratford City Development inLondon. Zorlu Center, nine kilometersfrom the heart of Istanbul, includesnot only a premium shopping mall(105,000 sq m) and hotels, but alsoa large cultural center (50,000 sq m)with two theaters and exhibition spaces.

The inaugural season (2014–15) wasto include 400 performances in front of500,000 spectators.

In France, culture-based tourism(festivals, live music, operas andgalleries, but excluding historic sites)generated US$2.6b in 2013. Cultural

heritage, activities and events areurban growth accelerators, and play amajor role in urban renewal. In Japan,the Odaiba articial island bringstogether business, leisure and culturalinfrastructure. The island’s two museumsand its cultural events (the Comic Marketand Gundam festival attract internationalgaming, manga and anime enthusiasts)underpin the success and attractions ofthis Tokyo district. The Comic Market

draws twice a year almost 500,000people in a three-day event.

The South by Southwest (SxSW) festivalhas put Austin, Texas, on the globalcultural map, attracting more than370,000 people in 2014, and generatingUS$315m for the local economy.

The rising middle class is hungryfor culture

The world is young — 1.8 billion of theworld’s population was between 10 and

24 years old in 2014, a record high — andglobal literacy has improved signicantly.Strong economic growth and youngpopulations are already combiningto produce a surge of middle classconsumers in many emerging markets.Nowhere is this trend stronger than inAsia and Africa: the rapid emergenceof Asia’s middle class is adding a leisurecenter to the world’s manufacturing hub.Already, Asia counts 525 million middle-

class cultural consumers.In accordance with theories advanced byAmerican economist Thorstein Veblen,2 consumers are spending money on”luxury” cultural goods to publicly displaytheir newfound economic power. Culturalknowledge and consumption havebecome a means of enhancing socialstatus. This trend is clearly apparentin India, where rising newspaper salesreect social as well as economicaspirations.

Source: Hitting the sweet spot: the growth of the middle class in emerging markets, EY, 2013; SkolkovoInstitute for emerging market studies 2013

global middle class

will be Asia-Pacific

residents by 2030,

Two thirds of the

up from just under

one-third in 2009.

2 The theory of the leisure class: an economic study of institutions, 1899.



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Cities provide a concentration of peoplehungry for entertainment in manyforms, and with diverse appetites.They provide a market for culture andallow cultural diversity to ourish — aneffect increasingly displayed in China.Rising urbanization and demand forentertainment have prompted largeinvestments in construction andreal estate in the country. Chineseconglomerate Dalian Wanda Group, now

the world’s largest cinema operator, isinvesting US$1b to set up its Han ShowTheatre in Wuhan (population 10.2m).Dalian Wanda Group is also investing inthe nearby Wanda Movie Park, a giantindoor theme park, using European andChinese talent to help develop the showsand attractions.

Urbanization is accompanied by changingemployment patterns and the acquisitionof new skills: African urbanizationis part of a shift from agriculture tomanufacturing and services. In Latin

America, governments are awakeningto the opportunities offered by, andthe needs of, their developing creativeindustries. A vocational school forperforming arts was recently establishedin La Plata, Argentina, to equipunemployed youngsters and adults for

jobs in this growing arena.

A new creative class emergeswith the growth of global cities

Urbanization, coupled with thedevelopment of cultural activities, isalso fueling the emergence of a neweconomic class in both developed andemerging countries — the “creative

class.” This class, according to RichardFlorida, urban studies theorist, includes“super-creative” scientists, artists,engineers, designers and novelists, aswell as “creative professionals” whowork in a wide range of knowledge-basedoccupations. The creative class is theincarnation of the triptych “Technology,Talent and Tolerance,” dened by Florida,and is a key motor of growth, innovationand attractiveness in urban areas. The

combination of cheap inner city propertyand strong endorsement of creativefreedom helped revive Berlin, which nowdraws artists and cultural entrepreneursfrom around the world.

According to the EY Global Talent inGlobal Cities 2015 study, the city rankingfor creative class attraction is:

• New York — enjoys a unique culturalscene, embedded in a cosmopolitanand forward-thinking urbanenvironment, generally consideredbenecial to creative activities

• London — ahead of Paris owing toits international openness (33% of

its population was born abroad,compared with just 12% in Paris)

• Paris — ranks third due to its culturalheritage and technology assets, but ispenalized by a weaker entrepreneurialenvironment

Cultural projects are drivers ofurban regeneration

World-class cultural infrastructure is acatalyst of urban development: buildinga museum often offers opportunities

to engage in large urban developmentprojects and to develop a new “citybrand” around cultural and creativeindustries. Such agship projects boosta city’s attractiveness for tourists, talentand highly skilled workers.

Bilbao, in Spain’s Basque Country, is nowan icon of culture-led urban regeneration,with the Guggenheim Museum. In aregion blighted by high unemployment inthe 1990s (around 25%), the US$700mrevitalization plan enhanced the city’sattractiveness, underpinned 4,400

existing jobs in the city, and created morethan 1,000 full-time jobs. Tourist visitshave since multiplied eight-fold.

1 New York

2 London

3 Paris

4 San Francisco

5 Singapore

6 Sydney

7 Los Angeles

8 Berlin

9 Tokyo

10 Barcelona

Source: Global talent in global cities,

EY, 2015

Global talent in global cities (2014)Top 10 city ranking



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The truth about the cultural-digitalrevolution

A variety of digitalization levels

Sales of digital cultural goods andservices are estimated to have reachedUS$66b in 2013. Online and mobile

games, with US$33.8b in sales, werethe world’s best-selling digital content,followed by digital movies (US$13b),music (US$10.3b) and books (US$8.5b).

Worldwide sales of digital cultural content in 2013 (US$b)

Source: EY analysis of cultural and creative markets, 2015

Online and mobile games

Digital movies & video

Digital music

Digital books

65.6

8.5

10.3

13

33.8

Total

The shift from physical to digital salesis most advanced in recorded music,where digital accounts for 45% ofpurchases worldwide, while online andmobile gaming account for 34% of

sales. In movies, video-on-demand nowcontributes more than a quarter of sales(26%), while in books, e-books comprise7% of the global market.

Digital vs. physical content sales in 2013 (% value in US$)


Physical salesDigital sales

Books

Music

Movies

Gaming

Total

0% 20% 40% 60% 80% 100%



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North Americans are the mostenthusiastic consumers of digitalcultural goods, accounting for nearlyhalf of all digital content sales (47%)in 2013, followed by Asians (25%) andEuropeans (23%). These varying ratesreect a difference in digital equipmentand infrastructure availability (noteveryone has a tablet or e-reader), butalso highlight different consumptionpatterns. Buying 20% of their books

in digital form, compared with 3.8% inEurope and 3% in APAC, North Americansare the most digitally-savvy population.

Understanding how consumersdrive value and content

Consumer shifts reshape the world ofcultural and creative industries. Thoughthe scale and pace of the online shiftvary markedly in different areas of mediaand entertainment, all are feeling theeffects. Continuing technology changewill accelerate this move, empoweringthe consumer.

Digital cultural goods sales byregion, 2013 (US$b)

Source: EY analysis of cultural and creativemarkets, 2015

15.4

30.6

2.5

16.1

1.0

Europe North America LatAm

APAC Africa and the Middle East

Source: Creating growth: measuring cultural and creative markets in the EU, EY, 2014 — updated

Disruptive business models: key gures

2011 2014 2011 2014 2011 2014

+18%

Amazon

revenues

+44% +61%

Netflix

subscribers

Google searches

per year

2011 2014

+39%

Number of

Facebook

users

2011 2014

+81%

€m collected by

entrepreneurs

on Kickstarter



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More than any other sector, CCI haveradically restructured in responseto the omnipresence of the internetand the new consumption patterns itenables, reshaping business models andcontent creation processes. Six featuresstand out:

• Abundance: The abundance andimmense diversity of content isnow taken for granted by today’sconsumers.

• Personalization: The creativeindustries embody our appetite forincreasingly personalized content,targeted according to time, placeand person.

• Aggregation and recommendation:The emergence of “time and contentconsumption crossroads,” such asGoogle and Facebook, has fueledmarket segmentation enabled bybig data and the renewed searchfor relevance. State-of-the-art

recommendation engines guide theend-user in a world of “hyper-choice”and enable them to track downspecialized content of interest tominority audiences.

• Community: Social networks haveaided the emergence of a community-based digital economy, in whichfriends may be more trusted thantraditional brands and media.

• Involvement: Content needs to movefrom “offer” to “engagement” inorder to sustain relationships. Socialnetworks contribute to the production,diffusion and marketing of cultural andcreative works.

• Illegal content: Digital technologiesand the internet have enabled theemergence of many unauthorizedservices and usages. Unlawfuldissemination deprives creatorsand entrepreneurs of revenues,in some cases making it hard tonance creation.

Changing consumption is challengingtraditional formats: TV-establishedformats continue to prove successful,driven by live events and original

content, whereas digitalization enablesand requires experimentation tomeet expectations and enrich viewerexperience. Meanwhile, on-demandaccess is changing the way people watchTV shows (76% of viewers prefer to

“binge-view” shows back-to-back). Onlinemarketers are using gaming techniques(called gamication) to attract and holdaudiences — witness the success of socialvideo-game-viewing platforms suchas Twitch — and viewers can enhancetheir experience of live events bysimultaneously sharing their reactionsvia second screens and social platforms.

Developing innovation and a

“culture of data”

New entrants have been creatingecosystems that make it easier forconsumers to discover, choose andenjoy media and culture. Already, theyhave signicantly disrupted businessmodels and pricing in music andpublishing. Often, with a background intechnology such companies seek earlyinternational expansion to attain criticalsize, and invest heavily in technology andsystematic data analysis. In 2013 Netixdevotes US$379m a year (9% of sales) toR&D and employs 300 people to maintainand develop its content recommendationengine at a cost of US$150m a year. Asof 30 September 2015, R&D costs are upto US$172m per quarter.

Powerful ecosystems are emerging around content, devices and networks

Lovefilm

Apple

Itunes

Netflix

Vudu

Hulu

Spotify

Cable TV

everywhere

Hulu Plus

Film4oD

Amazon

Prime

Instant

Video

YahooMovieplex

Bigflix +

Verizon

Redbox Vine Facebook

purchases

Oculus Rift

Apple

music

streaming

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015



27/120

“The challenge in navigatingthe path to digital is keepingyour balance — keeping onefoot safely on the dock asyou put your leading foot inthe boat.”

“We need to invest in moredigital talent.”

“We will consider dealsat the right price, butexperimenting with formatsand price and offers will alsoenable growth.”

To stay competitive, companies mustinnovate constantly. They have to:

• Match the interactivity of other onlineplatforms by adding new features orimproving existing ones

• Stop thinking in terms of platforms,and focus instead upon content, todeliver it seamlessly across platforms

• Develop direct relationships withcustomers to secure control over keyvalue-chain activities

• Invest in new talent and skills tobetter leverage consumer and contentanalytics, improve the customer’smulti-channel experience and developthe ability to constantly overhaul whatthey do

• Develop open innovation strategiesenabling direct relationships withstart-up companies, individuals anduniversities to benet from their ideas

Investing in new media

Companies face tough choices aboutwhere to invest in a fast-changinglandscape. Ofine media still provide themajority of revenues and prots, but theshare of digital is growing.

Yet, digital is often loss-making in theshort and medium term. Media andentertainment (M&E) companies mustcontinually assess their investmentstrategies as market dynamics change.They have to:

• Evaluate the opportunities andlimitations of different platformsas they evolve, hinging investmentdecisions upon how they will affect theuser experience

• Direct investments toward emergingecosystems offering the greatest value

• Study how consumer behaviorsand technological developmentinuence each other, and adopt a“test and learn” approach (as digitalcompanies do)

• Understand how current and futuredigital revenue models will affectlong-term protability: companiesoften struggle to recast their businessmodels while focusing on short-termreturns on investment

The digital paradox

Although digitalization is driving

media and culture consumption, someCCI are showing strong resistance todigitization, such as books: in 2015,print will represent 80% of all book salesworldwide, and even higher in developingcountries.

The appetite for physical events andvenues has sharpened. The musicindustry is now once again driven by liveevents, and revenues from live showsnow exceed recorded music sales in someregions. In Europe, ticket sales for livemusic performances, at US$16.5b, are

now more than twice those of recordedmusic sales (US$6.3b).

Digital distribution is becoming a tool forpromoting live events. Using cultural dataabout consumers (cultural behavior andsocial recommendations) to alert them tolive events and sell them tickets enablesthe creative industry to blend businessmodels to achieve growth.

Steve BercuFormer President of American Booksellers

Association, co-owner of BookPeople

“Print is denitivelyhere to stay. It is apopular medium andpeople are attachedto reading on paper.In fact, it is the fthyear that we see a

net increase in thenumber of bookstores in the US.”

What recentlysurveyed media andentertainment CEOshave to say



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The informal economy is an economy

The informal economy is dened as“market-based production of goodsand services, whether legal or illegal,that escape detection in the ofcialestimates of GDP (Smith, 1994). In CCI,this involves the exchange of culturaland creative goods and services that arehidden from ofcial view. It includes:

• Piracy: physical piracy, i.e.,manufacturing unauthorized (pirate)copies of protected material anddistributing and selling them; digitalpiracy, i.e., unauthorized internetdistribution of protected works

• The informal economy: paid provisionof goods and services, largely outsideformal arrangements. As such,the informal economy must not beconsidered as criminal activities: itrepresents cultural activities andcontent traded by creators usinginformal distribution channels.

Piracy is a signicantthreat to CCI

Digital technology has made it easyto unlawfully copy and share culturalcontent. Illegal streaming platforms,le-sharing, peer-to-peer networks and,

most recently, stream ripping, rival legalsubscription and downloading services. InSpain, 88% of cultural content consumedonline during 2014 was illegal accordingto the Spanish Observatory on piracy anddigital consumption habits in 2014.

Piracy is extremely harmful to thecultural and creative industries: it wrecksdistribution channels and leaves creatorsand creative industries unrewarded orill-rewarded. Piracy is believed to havecost the ve largest EU economiesaround US$25b and more than 189,600

jobs between 2008 and 2011 as shownby a Tera Consultants/Forum d’Avignonreport in 2014. In the US, music piracycauses US$12.5b in economic losses,and an estimated 71,000 jobs are lostannually, reducing the music industry’searnings by US$2.7b and depriving

the US Government of US$422m intax revenues.

The informal economydominates cultural contentdistribution in developingcountries

In Asia-Pacic, Africa and Latin America,informal trading of pirated cultural goodsand services (usually at lower prices)

without any payment to authors iswidespread. It ranges from rip-off CDs,movies and video games, to unlawfulbook copies, to unlawful performancesand back-door TV subscriptions. InformalCCI sales in emerging countries totaledan estimated US$33b in 2013 andprovided 1.2 million jobs.

32%

16%

8%

12%

26%

6%

Books Music TV Movie

Gaming Performing arts

31%

3%

3%

7%

56%

Music MovieBooks

Gaming Performing arts

Informal sales of cultural goods andservices in Africa, Latin America and

Asia-Pacic, 2013


The informal economy provides employment for sellers, artists and performers.

Where the jobs are: employment in theinformal cultural economy in Africa,

Latin-America and Asia-Pacic, 2013




29/120

Performing arts are the biggestemployers in the informal economy,providing unofcial music and theaterperformances (street performances,festivals and concerts that do not payauthors rights, private performances atmarriages or funerals, etc.), which areoften free for audiences. In Africa, theseperformances can be paid by individualsponsors.

In the absence of ofcialalternatives, cultural consumersturn to the informal economy

In emerging countries, the high prices ofcultural goods, low incomes, and cheapdigital technologies combine to fosterpiracy. Relative to incomes, retail pricesof CDs, DVDs are 5-10 times higher inBrazil, Russia, and South Africa than inthe US or Europe.

The lack of legal cultural distributionchannels (such as bookstores) and othercultural infrastructure makes it hardfor consumers to obtain lawful copiesof cultural works. In South Africa, therst multiplex in a township did not openuntil 2007.

Many creative workers in emergingeconomies, including musicians, artisans,performers and visual artists, often ndthemselves beyond the reach of ofcialregulation.

Informal distribution channels in SouthAfrica, Brazil, India, Russia and Boliviahave become so effective that lawfuldistributors sometimes try to use them.The Nigerian home video industry — nowthe second-largest lm industry in theworld — was built on informal distributionnetworks, and its success is encouragingtheir extension throughout Africa.

In the absence of formal venues, theinformal economy also helps nance thework of performers, including actors andmusicians. In Africa and Asia-Pacic,informal contracts between artists andprivate sponsors are often the primarysource of income for creators.

Director of Abidjan’s Palais de la Culture

“The informal sector iseverywhere whereas

80% of legal musicalshows are in Abidjan.”



30/120

C u l t u r a l a n

d c r e a t i v e

i n d u s t r i e s

i n v e

g l o b a l r e g i o n s



31/120

Russia

Performing arts

JapanArchitecture/newspapersand magazines

France

Books/advertisingUK

Gaming/visual artsUSA

Performing arts/TV

Turkey

MusicCanada

Music/gaming

Mexico

TV/books

Brazil

TV/music

Egypt

Visual arts/movieMiddle East

Visual arts/TV

South Africa

Visual arts/radio IndiaNewspapers and

magazines/movie

Australia

Performing arts/advertising

South Korea

Music/TV

Nigeria

Music/movie

China

Performing arts/movie

Page 60 Page 50 Page 48 Page 52

Page 40

Page 42

Page 38

Page 36Page 78

Page 76

Page 74

Page 68

Page 66

Page 80

Page 53

Page 41

Page 58

This section highlights the weight, drivers and challengesof cultural and creative industries in ve global regions:Asia-Pacic, Europe, North America, Latin America and theCaribbean and Africa and the Middle East.

For each region, we propose:

• A panorama of CCI in each global regions, highlighting theirspecic trends, strengths and drivers in the regions;

• A preview, providing a forward-looking analysis of themain challenges to develop CCI, according to localtechnical evolutions, innovation and economic outlookof each global region.

This section also includes 17 country focuses to illustratespecic and selected CCI trends and challenges in different localmarkets.

Selected countries, selected sectors and corresponding pagenumbers are as follows:



32/120

CCI revenues

US$743bCCI employment

12.7m

Snapshot

CCI jobs in Asia-Pacic in 2013


177,000Radio

252,000Gaming

492,000Architecture

453,000Advertising

774,000Movie

1,294,000Music

1,349,000Performing arts

1,630,000Newspapers and magazines

1,704,000Books

1,943,000TV

3,284,000Visual arts

CCI revenues in Asia-Pacic (US$b) in 2013


6.1Radio

14.5Performing arts

16.3Music

25.9Movie

47.1Gaming

48.7Books

68.5Advertising

117.2Architecture

118.0TV

141.6Newspapers and magazines

191.5Visual arts

Asia-Pacic

Total for jobs and revenues have been estimated after removal of double-counting. The sum of each sector exceeds theconsolidated total as some cultural activities are counted in two sectors (for instance, live music is included in “Music” and in“Performing arts”).



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Panorama

Demographic andeconomic changesboost architecture andmass media

The rapid emergence of Asia’s middle

class is transforming the region into

a powerhouse of economic growth.

The progressive integration of Asiancountries into the global trading system

over recent decades and relatedgovernance improvements have givenpeople the wealth and leisure to becomecultural consumers. Rising prosperityand literacy are enabling a culturalresurgence, notably in China, but also inpopulous emerging economies such asIndonesia and the Philippines. Elementsof Japanese art and culture have longbeen widely admired, though populationdecline, economic stagnation and a seriesof stumbles by technology companieshave prevented Japan’s cultural

industries from living up to expectations.Japan struggles with change. That twoof its newspapers, Yomiuri Shimbun and Asahi Shimbun, are the world’sbestsellers could reect its agingpopulation, difculty in adapting to a newera, and rigid economy.

Elsewhere in Asia-Pacic, however,

many economies are growing fast. Thisis boosting the construction marketand providing a eld day for architectsas they vie to build homes, ofces andleisure facilities. Architecture, an activity

that marks time in mature economies,continues to achieve double-digit growthin Asia-Pacic (13% in 2013).

Digital is a signicantcompetitive advantage

For perhaps two decades, Japan and

South Korea (now joined by China)

have been at the forefront of the digital

hardware revolution, giving them a

signicant competitive advantage in

the gaming industry. This helps explainthe strength of Asia-Pacic companiessuch as Konami, Square Enix, Capcom

and Sony Computer Entertainment.Asia-Pacic is a champion in globalgaming (revenues of US$47.1b, 47.5%of the global market) and contributed82% to the growth of the global gamesmarket in 2014, beneting from the riseof online gaming.

With 1.25 billion people connected to theinternet, Asia-Pacic is home to 47% ofthe global online population. China alonehas more than half a billion internet usersand the world’s second-largest populationof online shoppers (145 million people).

Smartphone penetration in Asia-Pacichas boomed in recent years. In HongKong and Singapore, 87% of adultsnow have a smartphone. Asia-Paciccountries are among the most connectedin the world. South Korea has the world’sfastest broadband and the internetreaches almost every family, facilitatingthe purchase and delivery of culturalcontent. Sales of e-books have beenrising steadily to reach US$178m in2012 and more than US$228m in 2013.The South Korean e-book market is

among the world’s largest.

Asia has created its own digital worldwith successful social platforms inChina, spurred by proactive governmentintervention. In China, Youku dominatesvideo uploads, RenRen social networkingand Weibo leads micro-blogging. Youkuand Tudou, the two biggest videoplatforms in China, have 900m usersand exert a signicant inuence overthe Chinese internet advertising market,which has jumped from US$2.8b in 2009

to US$13.4b in 2013.

National markets andgrowth vary widely

Asia is a vast and varied region,

marked by a strong and diverse cultural

heritage. The levels of prosperity andeconomic development vary fromSingapore, Korea and Japan at oneend of the spectrum, to Myanmarand Cambodia at the other. Two hugeemerging powers, China and India, have

extraordinarily ancient, diverse andrich cultures, cross-fertilized by globaldiasporas.

The region’s cultural and creativeindustries reect this multiplicity.Though a few markets are relativelymature, many are still growing rapidly.The gaming industry scarcely exists inthe least-developed Asian countries, butis relatively mature in Japan and Korea,and in China it grew 35.1% between2011 and 2012.

Architecture, too, is growing strongly in

China, surging 20% between 2012 and2013 as the country built increasinglysophisticated homes, shops, ofces andother venues for its people. In Australia,however, where the construction marketis less dynamic, the architecturalprofession is marking time.

Some cultural industries have yet to

gain momentum in Asia. The region isespecially underweight in the performingarts, accounting for just 11% of the globalmarket, and in the music industry (23%).

Asia-Pacic civil engineering sector value (US$b)

Source: MarketLine, 2014

755 812.2

903.1

1084.9

1237.2

0

200

400

600

800

1000

1200

1400

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Poor copyright protection ceases to be

an advantage. The Global IntellectualProperty Center (GIPC) IP Index suggeststhat India, China and other southeastAsian countries need much stronger,better enforced protection of intellectualproperty. India scores just 6.24/25 andChina 9.13/25, compared with a score of22.5/25 for the UK. Ignoring copyright,

while morally wrong, makes it cheaperto access cultural goods from elsewhere,but can impede the development ofdomestic cultural industries.

The informal economy remains

dominant in the region, accounting forUS$25.2b of sales and 670,600 jobs in2013. Piracy rates are especially highin the music, TV, movie and gamingindustries: 90% of DVD sales and 95%of recorded music sales in Asia areestimated to involve unlawful copies.Regulations and institutions are weak:

the informal economy may generatehalf of all GDP and provide a largemajority of jobs.

From heritage to industry

Many economies in Asia-Pacic have

identied CCI as a high-potential

strategic sector and are striving topromote their development and enhancetheir competitiveness. Creative hubsand clusters have mushroomed underthe impetus of policy makers. Amongthe best known are Hong Kong’s JockeyClub Creative Arts Centre (JCCAC),

West Kowloon Cultural District, andBeijing’s 798 Daishanzi Art District. Forinstance, JCCAC serves dual roles: asan arts village, it helps support the artscommunity’s needs from art studio tooperation space, and as an art center,it showcases artworks and welcomesvisitors. In 2014, it provided 136studio units and attracted an estimated300,000 visitors during the year.

The slow but steady development of theASEAN Economic Community should alsofacilitate the development of a cross-

border creative economy in parts of theAsia-Pacic region.

Achille ForlerMD at Universal Music Publishing

“India is the world’ssecond largest marketfor YouTube musicvideos, with close to100 million individualviewers per month.”

Media freedom and freedom of

expression are very limited in many

Asian economies, a factor that impedes

the development of CCI. Accordingto Reporters Without Borders, nearlyhalf of the 20 economies with the mostrestricted press are in Asia-Pacic,notably North Korea, Iran, MainlandChina, Vietnam, Laos, Uzbekistan, SriLanka and Kazakhstan. Even democraticstates in northeast Asia often score

poorly. In the latest survey, South Koreafell six places to nish 50th, and Taiwanslid two places to 47th.



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The combination of rising leisure

time, communication and education is

enhancing international awareness of

the region’s creative potential. Majorcultural events have helped highlightprogress, notably universal expositions atAichi (Japan) in 2005, Shanghai (China)in 2010 and Yeosu (South Korea) in2012. The region is also home to someof the world’s best-known traditionalfestivals: Cherry Blossom (Japan),

Songkran (Thailand), Diwali (India) andthe Lantern Festival (China).

Exporting cultural models

New Asian cultural industry modelsare beginning to emerge, aidingregional exports.

Japan is striving to become a culturalsuperpower, but more than a decadeafter its inception, the Government’sCool Japan campaign remains lackluster.However, Japanese anime, video games

and manga comics, which appeal to manyurban and young people in both Asia andthe West, are still thriving.

South Korean culture has graduallygained international markets, especiallyamong the youth, since the 1990s. TheKorean Wave, also known as Hallyu,reached China via K-pop and TV soaps. Italso reached a broader youth audiencevia social media platforms includingFacebook and YouTube, where it capturedthe attention of tech-savvy and culturallycurious audiences in North America

and Western Europe. In 2011, K-popwas a global phenomenon, with nearly2.3 billion YouTube views. Cultural

exports have helped shift perceptionsof Korea: a survey by the KoreaInternational Trade Association foundthat 80% of respondents from Japan,Mainland China, Taiwan and Vietnambelieved that Hallyu had positivelyinuenced the purchase of South Koreanproducts. In 2011, South Korean culturalexports, including lms, music and TVshows, hit a record US$4.2b. SouthKorea is now a role model for Asian

countries that are seeking to reducetheir reliance on imported entertainmentand provide jobs for artists, writers,producers, set and costume designers,and others involved in lm and televisionproduction.

India’s lm industry is now the world’slargest in terms of annual productionnumbers, turning out 3,000 moviesa year in more than 20 languages.Once centered largely upon musicallms, some Indian movies increasinglyresemble international offerings, and

thanks to the country’s large diaspora,gain a niche entry to non-Indiancommunities around the world, especiallyin the Middle East and South Asia.

Cultural re-conquest

In 2009, a meeting of China’s State

Council declared culture a strategic

industry that should generate at

least 5% of the country’s GDP. China’s“cultural strategy” aims both to satisfya growing domestic demand for culture,as well as enhance China’s heft around

the world and better enable Chinesecities to compete with rivals, such as New

York, London and Paris. Huge public andprivate investment has owed into thecreative and cultural sector as a result.

Chinese collectors have become hugely

inuential in global visual arts markets

and Chinese investors are rapidly

expanding into cinema, gaming and

TV. Chinese collectors have becomeprolic buyers in global ne art markets,acquiring both Chinese and Western artfor display in private collections or in thecountry’s rapidly-expanding network ofmuseums and galleries. Fine art salesof US$12.5b in 2013 made China theworld’s second-largest market, after theUS. Museums are also an integral partof the country’s cultural renaissancestrategy: their number doubled to 4,000in the decade to 2013.

As audiences increase rapidly, China has

also begun to stamp its authority on the

lm industry. The rapid opening of newcinemas has led to soaring audiences.Chinese box ofce receipts now rankssecond worldwide (behind the UnitedStates). Mainland China’s movie industryis thriving; aided by the internationalreputation and skills of Hong Kong moviemakers, it achieved year-on-year growthof 27% and 36% in the past two years.Domestic and collaborative internationalproductions are gaining art-houseaudiences, while popular lms, suchas the Detective Dee series, now winshowings worldwide.



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Cinema in India: a long-standing andthriving cultural cornerstone

Seen as a “cement of society” by formerPrime Minister Jawaharlal Nehru, cinemain India has a formidable tradition andhas long been nourished by supportivegovernment policies. Cinema remains a

popular activity every Indian can afford:open air and indoor cinemas are foundacross the sub-continent, from travelingcinemas to single-screen cinemas (forup to 900 people) and technologically-advanced multiplexes in big cities.

Though there are no restrictions onimports, locally made lms dominate themarket.

Between 90% and 95% of lms releasedare Indian. Offerings range from themasterful art-house work of Satyajit

Ray to modern-day comedies such asDelhi Belly. But most Indians adore thecountry’s musicals, a peculiarly Indiangenre paced over three hours centeredupon music, dance and a love story.

India is the third-largest cinema marketin Asia after China and Japan, andsixth-largest globally, with annual boxofce revenues of US$1.7b. And it is stillgrowing, aided by the opening of 150new movie theaters every year.

“Bollywood,” “Kollywood,”“Tollywood”: cinema is plural

Though Bollywood has become a bywordfor Indian cinema, there is more tothe country’s lm industry than theeffervescent Hindi-language productioncenter in Mumbai. Kollywood lms shot

in Chennai in the Tamil language arenearly as numerous, as are Tollywoodlms from the Tollygunge studios atKolkata, mainly scripted in Bengali. Eachcenter produces 200 to 300 lms a year,generating an output that makes theIndian lm industry the world’s largest byproduction numbers, ahead of Nollywoodand Hollywood.

Bollywood lms are, however, the mostexportable. They are very popular inAsia-Pacic countries, including SriLanka, Bangladesh, Nepal and Pakistan,

in many Arab countries, as well as amongIndia’s extensive global diaspora. Morerecently, independent directors includingManjeet Singh and Anurag Kashyaphave produced more

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