Digitization boosts revenues in the Creative Sector

8 APRIL 2013

Digital revenues increase by more than 11 percent per year since 2001: a study by Booz & Company on trends in book publishing, press publishing, film and television, gaming, and music industries. Read on about "The Digital Future of Creative Europe: The Economic Impact of Digitization and the Internet on the Creative Sector in Europe".

Computer Art by WilliamIsmael - Found on Flickr http://www.flickr.com/photos/williamismael/5917592263/The bottom line of digitization and the Internet is surprisingly positive for the creative sector in Europe. Despite significant structural changes, the revenues of the five major industries — book publishing, press publishing, film and television, gaming, and music — have increased to almost €200 billion (US$259 billion) since 2001, translating into a yearly growth rate of approximately 2 percent. Revenues from digital businesses grew by more than 11 percent per year to €50 billion (US$65 billion). The study “The Digital Future of Creative Europe: The Economic Impact of Digitization and the Internet on the Creative Sector in Europe” was released last march in London. It was conducted by Booz & Company and commissioned by Google.

Internet consumption
The Internet in particular has driven Europeans’ media consumption to record levels. On average, Europeans spend more than four hours per day with media products and services. Two hours of that are dedicated to watching TV and approximately 40 minutes are spent with newspaper and magazines. The Internet accounts for about one hour and 20 minutes, more than twice as much as seven years ago. In parallel, monetization of content has improved significantly. European consumers spend on average more than 4 cents per hour on media consumed online. That represents an increase of almost 140 percent since 2003. In comparison, the average monetization level per consumer is 17 cents per hour for film and television content and roughly 23 cents per hour for print products.

Distributing the arts online
Creators also benefit from digitization, according to the study, mostly in the form of easier access to distribution and new communication channels with audiences. In the music industry, for example, the absolute value generation for artists and labels has stayed constant over the last 10 years. In contrast to receiving a share of only 32 percent from a typical CD sale, they enjoy a 66 percent share of a typical download, because margins for production, distribution, and retail are minimized in the digitized model.

“Consumers and creators are the great beneficiaries of digitization in the creative sector,” says Hannes Gmelin, principal and digital media expert from Booz & Company. “But companies in the creative industries can also thrive as long as they are able to create relevant consumer experiences and focus on the two growth areas, digital and consumer-paid content.”

Read the full report