New EY report shows CCIs in Europe lost 31% of their revenues in 2020 to €440bn

 

By Emmanuel Legrand

Europe's creative needs an urgent influx of funds to weather the Covid pandemic that has cost the cultural and creative economy a loss of approximately 31% of its revenues in 2020, according to a recent study titled 'Rebuilding Europe: the cultural and creative economy before and after COVID-19', penned by EY and commissioned by GESAC, the European group of societies of authors and composers.

  The study mapped the economic impact of the pandemic on the cultural and creative industries (CCIs). In 2020, the total turnover of CCIs in the European Union was of €444 billion, down 31% (or €199bn) from 2019. 

  All CCIs are affected: performing arts (-90% between 2019 and 2020) and music (-76%) are the most impacted; visual arts, architecture, advertising, books, press and AV activities fell by 20% to 40% compared with 2019. The video games industry seems to be the only one to hold up(+9%). 

One of the most impacted sectors

  "The sector is unfortunately at the top of the sectors most impacted by Covid, alongside air transport and ahead of tourism," said Marc Lhermitte, who coordinated the study for EY. He added that two million jobs are at risk in the EU due to the pandemic in the years to come.

  One of the main impact of the crisis was felt on the level of royalties collected by the sector, said Lhermitte. “The seriousness of the crisis is illustrated, for example, by the fall of around 35% in royalties collected by collective management organisations (CMOs) for authors and performers, whose revenues will be sharply reduced in 2021 and 2022,” reads the report.

  "The drop in royalties is a major effect and it will last for years," said Lhermitte. "The impossibility to collect at events, bars, events, performing arts, etc, is a loss of income for independent workers, mostly." The study estimates than a third of revenues have been lost once for all, he said. Lhermitte said there has been an increasing activity online by performers but he cautioned that it did not fully translate into revenues for the sector, in particular for songwriters and performers.

Survive in dark times

  The study concludes that to rebuild Europe, there will be three main challenges: Financing the return to growth and irrigating all the links of the CCIs; Rebuilding trust through an inclusive economic and legislative framework; and Mobilising the creative forces of culture to meet the challenges of tomorrow. 

 Speaking at a virtual press conference, electronic music artists (and former President of CISAC) Jean Michel Jarre (above, with Marc Lhermitte and Jean Noel Tronc) said that today he is worried "for the new generations." He asked: "How can they survive in these dark times where everything is stopped? Without culture, the lockdown would have been a desert. Culture is a basic necessity, it is an essential good."

  Addressing policy-makers, he quipped: "Authors and creators will soon to have to work for Uber if you don't do anything." Jarre added that the world is looking at Europe for guidance. While the US and China have the biggest economies, Jarre said the world looks to Europe for the way it respects creators. "The European Union has a responsibility," he explained. "Europe has to be audacious by reinforcing authors and creators' rights, and intellectual property rights."

  He also called for the EU to provide "a vaccine" against the abuses in the digital world today.  

Call for funding from the EU

  GESAC President Jean-Noel Tronc, who is also CEO of France society SACEM, said he was expecting a significant allocation of funds from the European Union to CCIs as part of the €670bn recovery package. "It is absolutely crucial that a portion of that money, approximately 2% may be dedicated to supporting the creative industries," he said.

  Tronc also reminded the Commission that it was not simply about funding, but also ensuring that the regulatory environment kept supporting CCIs. He elaborated: "We know that the EU is the place where regulation is being made for the creative industries, we know that the world is looking at what the EU is doing, and we know we are facing a momentum with three major directives [Copyright, SatCab and AVM] that were adopted in 2019. This is about ensuring a rapid and effective implementation of these three directives. These directives will provide a safe, stable and a sustainable growth environment for the CCIs in the future."

  The Commission has also announced in December 2020 the Digital Service Act and the Digital market Act that Tronc said would "also provide a more balanced relationship between online platforms and the rest of the economy, especially the creative sector." Tronc also called for "a EU-wide strategy for cultural venues post-lockdown."

CCIs at the core of Europe's recovery

  Following the presentation of the study, a GESAC delegation held a series of virtual meetings with op officials at the European Commission, includingThierry Breton (Interior Market), Mariya Gabriel (Innovation, Research, Culture, Education, Youth and Sport), and Valdis Dombrovskis (Executive Vice-President for an Economy that works for people, also Trade Commissioner), among others.

  Gabriel welcomed the publication of the new study and said on Twitter that culture and creative sectors should be at "the core of European Union recovery."

  The study was commissioned by GESAC (European Grouping of Societies of Authors and Composers) with AEPO-ARTIS, EUROCINEMA, EUROCOPYA, EVA, FIAPF, IMPALA, IVF, SAA, and SROC as partners and with the support from AER, CEPIC, EACA, ECSA, EGDF, EPC, FEP, FERA, FSE, IFRRO, and IMPF.