Rebuilding
Europe
The cultural and creative
economy before and after
the COVID-19 crisis

January 2021

About the partners and supportersof the report

GESAC’s partners for the study
AEPO-ARTISThe European Grouping of Societies of Authors and Composers(GESAC) commissioned EY teams to produce a report on thestate of the cultural and creative industries (CCIs) in Europe.

Association of European Performers Organisations

What was their economic situation before the COVID-19 crisis?
What impact has the crisis had on activity and employment?
And what are the main priorities for the sector to protect itself
from the most serious consequences, to recover growth andenhance its value in the European economy? This study follows
a report of the same type, entitled Creating Growth, publishedin December 2014.

EUROCOPYAGESAC has brought together numerous partners
representing the CCIs, in order to reflect the diversity andcollective strength of this economy.

IMPALAThe EY team would like to thank GESAC’s team, GESAC's
partners and the experts interviewed across Europe. GESAC
and EY would also like to thank ADAGP, BUMA, GEMA, SACEM,
SCAM, SIAE and SOZA for their contributions. Everyone's
contribution has been essential to the study.

EUROCINEMA
Association of European Producers
European Federation of Joint Management Societiesof Producers for Private Audiovisual Copying

EVA
European Visual Artists

FIAPF
International Federation of Film Producers Associations
Independent Music Companies Association

IVF
International Video Federation

SAA
Society of Audiovisual Authors

SROC
Sports Rights Owners Coalition

About GESAC

Supportive organizations

GESAC comprises 32 authors’ societies from all over Europe,
which together represent over one million creators and rights
holders – from musicians to writers, visual artists to film
directors and many more, in the areas of musical, audiovisualand visual arts, and literary and dramatic works.

AER

web: www.authorsocieties.eu
email: secretariatgeneral@gesac.org
twitter: @authorsocieties

EACA

Association of European Radios

CEPIC
Coordination of European Picture Agencies
Stock, Press and Heritage
European Association of Communications Agencies

ECSA
European Composer and Songwriter Alliance

EGDF
European Games Developer Federation

About the study’s team

EPC
European Publishers Council

The study was carried out by EY Consulting, under thesupervision of Marc Lhermitte, with the participation of Hugo
Alvarez, Clémence Marcout, Quentin Nam and Enzo Sauze.

FEP
Federation of European Publishers

FERA
Federation of European Film Directors

FSE/SCRIPT
Federation of Screenwriters in Europe

IFRRO
Marc
Lhermitte

Hugo
Alvarez

Quentin
Nam

International Federation of Reproduction
Rights Organisations

IMPF
Independent Music Publishers International Forum

Clémence
Marcout

2

Enzo
Sauze

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

Contents
About the partners and supporters of the report

02

Executive summary

04

Editorials

08

1
2
3

Before COVID-19
The full power of culture and creation

12

Because of COVID-19
The sharp fall

28

After COVID-19
Rebuilding Europe

42

Detailed methodology and main sources

50

3

Executive summary
Rebuilding Europe : the cultural and creative economy
before and after the COVID-19 crisis
EY 2021

1. Before COVID-19 The full power of culture and creation
At the end of 2019, the cultural and creative economy
was a European heavyweight• With a turnover of €643 billion anda total added value of €253 billion
in 2019, the core activities of thecultural and creative industries(CCIs) represented 4.4% of EU GDP
in terms of total turnover.
• Therefore, the economic contributionof CCIs is greater than that oftelecommunications, high technology,
pharmaceuticals or the automotive
industry.
• Since 2013, total CCI revenues haveincreased by €93 billion and byalmost 17%.
• At the end of 2019, CCIs employed
more than 7.6 million people in
the EU-28, and they have added
approximately 700,000 (+10%) jobs,
including authors, performers andother creative workers, since 2013.

• Between 2013 and 2019, the 10
CCI sectors experienced varied but
constant growth rates: more than 4%
per year for video games, advertising,architecture and music; and between
0.5% and 3% for audiovisual (AV),radio, visual arts, performing arts andbooks. Only the press suffered (-1.7%)
due to the difficult transition between
print and online revenues.
• All the players point to a period of
intense innovation – not only thesearch for greater live or physicalexperiences by spectators, readers,players or visitors but also the
explosion in demand for online
content: 81% of internet users in the
EU used the internet for music, videos
and games in 2018 – more than for
shopping or social networking.

Turnover and added value in 2013
and 2019, and share of GDP(in € billion and %, EU-28)

+17%
550

643
(4.4%)(4.2%)

213

253

%

(1.6 )(1.7%)

2013

2019

Added value

TurnoverSources: Eurostat; GESAC; professionalorganizations; EY modeling and analysis 2020.

CCIs in Europe have become more international and entrepreneurial• In 2019, the five largest EU-28 countries (France, Germany,
Italy, Spain and the UK) accounted for 69% of CCI total
revenue in the EU, but the strongest growth came fromCentral and Eastern Europe.

• Over 90% of CCI companies are small- and medium-sizedenterprises, and 33% of the workforce are self-employed –more than twice as many as in the European economy as awhole (14%).

• In 2017, the EU exported €28.1 billion worth of cultural
goods. The EU’s trade balance in cultural goods is in surplus(+€8.6 billion), and the share of CCI exports in total EU
exports was 1.5% – about the same as the surplus in tradein food, drinks and tobacco (€9.1b in 2018).

• Revenues originating from the public sector accounted for
only 10.8% of revenues in 2018, compared with 11.5% in
2013.

4

Employment by sector in 2019(in million jobs; EU-28)
Sources: Eurostat – Business Sector Profile; EY modeling and analysis 2020.

Chemicals

Construction

1.2
7.6

Cultural and creative industries

Telecommunications

12.1

0.9
2.6

Tourism

10.7

Automotive

10.3
1.3

Utilities

8.4×more jobs than in thetelecommunications industry

81%

of internet users in the EU used theinternet for music, videos and games€8.6bEU’s total trade balance in cultural
goods in 201990%

of CCI businesses are small
and medium sized
Sources: Digital Economy and Society Index (DESI); Business
Sector Profile, Eurostat; Cultural Statistics, Eurostat

Transportation and logistics

Digital experiences and online/offline distribution
combinations have fueled the growth, but the market
continues to evolve• In the last six years, the turnover
generated by online culturalcontent, services and works
grew by 11.5% per year.
• Cultural enterprises havehistorically been one of the firstto experiment and adopt digitaltechnologies (digital photos,
digital carriers such as DVD and
Blu-ray, CDs, shooting digitally,
streaming, virtual reality andonline platforms). Culturalcontent have fueled the growth
and the development of theinternet from the very beginning,and still represent a high share ofbroadband consumption.
• Since 2013, CCI companies
and organizations have

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

invested heavily in innovationand digitization, both from abusiness perspective and in terms
of production and customer
experience.
• Yet unbalanced relationships
with global platforms andintermediaries on the internet
may compromise the financial
viability, employment, innovationand investments in the sector.
• For the stakeholders of the CCIs,
the challenges are numerous,
including the remunerationof rights holders, the proper
functioning of the markets for
cultural and creative content, andthe fight against illicit access toprotected works.

5

Executive summary
Rebuilding Europe : the cultural and creative economy
before and after the COVID-19 crisis
EY 2021

2. Because of COVID-19 The sharp fall
In 2020, the cultural andcreative economy lost
approximately 31% of its
revenues

Total turnover generated by CCIs in
the EU-28 (in € billion)

and music (-76%) are the mostimpacted; 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%).

• The total turnover of CCIs in the EU28 is reduced to €444 billion in 2020,a net drop of €199 billion from 2019.

-31%• The crisis has hit Central andEastern Europe the hardest (from-36% in Lithuania to -44% in Bulgaria
and Estonia).

• With a loss of 31% of its turnover, thecultural and creative economy is
one of the most affected in Europe,slightly less than air transport
but more than the tourism andautomotive industries (-27% and -25%
respectively).

643
444

• All sectors are affected: even thosethat seemed to be protected byhome consumption faced a sharp
drop in income, given the central roleof physical experiences and sales
in their business models, as wellas uncontrollable production anddistribution costs.

• The shockwaves of the COVID-19
crisis are felt in all CCIs: performing
arts (-90% between 2019 and 2020)

20192020 (estimate
with the impact of
the COVID-19 crisis)

Sources: Eurostat; GESAC; professionalorganizations; Oxford Economics – Global Industry,
Second Wave Scenario, as of 7 September
2020; EY modeling and analysis 2020.

Estimated change in turnover 2019-20 by CCI sector (in % of total 2019 turnover and in € billion; EU-28)
AdvertisingArchitecture

Audiovisual

Books

Music

Newspapers
and magazines

Performing
arts

Radio

-2

-9
-17
-28%
-36

-22%

-18
-26

-25

%

-23%

-20

+9% +2Visualarts

Video games
industry

-20%

-32%

-37

-31%
Average change
in turnover

-38%
-53

Change in turnover (in %)-76%

Change in turnover (in € billion)
Sources: Eurostat; GESAC; professional organizations;
Oxford Economics; EY modeling and analysis 2020.

6

-90%

3. After COVID-19 How to rebuild Europe
As a result of in-depth research and interviews conducted by EY teams, and based on theopinions of experts and organizations representing the CCIs, the following challenges havebeen identified as priorities for the recovery and growth of the creative economy:
Challenge 1 – “Finance”

Challenge 2 – “Empower”

Challenge 3 – “Leverage”

Provide massive public funding
and promote private investment incultural and creative businesses,organizations, entrepreneurs andcreators – two indispensable levers
to support and accelerate theirrecovery and transformation.

Promote the EU's diversified
cultural offering by ensuring asolid legal framework to allow
for the development of private
investment in production anddistribution, providing thenecessary conditions for anadequate return on investment
for businesses and guaranteeing
appropriate income for creators .

Use the CCIs – and the multiplied
power of their millions of individualand collective talents – as a major
accelerator of social, societal
and environmental transitions in
Europe.

The COVID-19 crisis will have a massive and lasting impact on the entire CCI value chain• The financial viability of individuals – whether creative or
business – and CCI companies in the private and public
sectors is compromised by rising costs, successive delays,
tight cash flow due to interruption of activities, and theuncertain return of acceptable economic and healthconditions.
• 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 andperformers, whose revenues will be sharply reduced in
2021 and 2022.
• On the other hand, consumer spend on digital models
does not compensate for the loss of revenues generated
in physical sales (of books, video games, newspapers, etc.)
and events in most sectors. In the music sector, physicalsales (CDs and vinyls) will be down 35%, while digitalrevenues for the recorded music industry are expected to
grow by only 8%. The same trends apply for film with a dropof revenues generated by European cinemas estimated so
far at -75% in 2020.
• In the absence of a significant resumption of offline
production, distribution and promotion operations in 2021,
the ability of CCIs to maintain and increase investment
in new projects, creation and innovation will be seriously
compromised.
• In a recent EY Future Consumer Index, 46% of respondents
said they would not feel comfortable going to a concert
for several months, and 21% said they would not feel
comfortable going for several years.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

7

Editorial

Culture, the social cementof the post-COVID-19 world

David Sassoli
President
European Parliament

Europe’s diverse and rich cultural heritage and culture is the
cement that fosters our common European sense of belonging.
Not only does it contribute to our society’s social cohesion, to our
democracy and to our economy, but it also reflects our European
diversity, values, history and way of life. As such, it must be
cherished and supported.
We are facing challenging times. The
European Parliament recognized fromthe outset the dramatic effects of the
COVID-19 pandemic on the cultural andcreation sector, and on the many culture
professionals, authors, composers,
musicians, writers and more, men andwomen whose present and future havebecome seriously uncertain.

“

We must think of culture as not only apivot for recovery but also the social
cement of a post-COVID-19 world thatneeds to be rebuilt, in which interpersonal
links will have to be reconnected.
At a time when darkness seemed to havetaken over our private lives, culturalvenues, concerts, cinemas and theaters,
Europeans took to their instruments andsang on their balconies.

Art has a cathartic power that can accompany a
post-pandemic society on the road to resilience.
From the very start, we called on EU
institutions and Member States torecognize the need for massive support
for culture. For several months, theParliament fought tooth and nail toincrease the budget allocated to culturein the multi-annual financial framework.
The Creative Europe program wassubstantially enhanced, and this victoryis the testament to our commitment to
respond to the needs of citizens and tothe cultural and creative sector. We also
called strongly upon every Member Stateto ensure that the fundamental place that
culture deserves in the economic recovery
plan is preserved.

8

Art has a cathartic power that canaccompany a post-pandemic societyon the road to resilience. Art is not anaccessory; it is a viaticum. Art is not“political”; it is “poetic” – a creative force
that animates us and allows us to live
together, to survive, individually andcollectively.

Editorial

CCIs are essential for
maintaining our cultural
diversity, social cohesion andEurope’s attractiveness

Mariya Gabriel
European Commissioner
for Innovation, Research,
Culture, Education
and Youth

The EU’s cultural and creative sectors
are an important pillar of our society
and economy. They are essential forour cultural diversity, strengtheningsocial cohesion and increasing Europe’s
attractiveness internationally. They
are also one of our most dynamic
sectors, with positive spill-over effects
on other sectors of the economy,such as the take-up of technology or
cultural tourism. The contribution to our
economy is enormous, with as much
as 4% of our GDP and more than sevenmillion jobs, more than the automotive
sector in the EU!
Yet the COVID-19 crisis has had adevastating impact on cultural andcreative sectors across all Member
States. We have seen, on the one hand,the sector’s extraordinary capacity tomobilize and be creative at all levels, buton the other, the need for resources,
targeted investment and greater support
in such critical moments.
On our side, we reacted very quickly
using the flexibility of our existing
instruments. But more importantly, we
worked hard for the future. As a result, a
few weeks ago, we managed to increase
the budget for the new Creative Europe
programme 2021-2027 to €2.2bn, a
50% increase compared with the current
programme. Moreover, other important

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

instruments, such as Erasmus+, with anenvelope of €26bn, as well as Horizon
Europe and, in particular, its Cluster
2 on Culture, Creativity and Inclusive
Society (worth €2.3bn), will also
support the sector. Our work will focus
on enhancing synergies among these
initiatives, as well as with other funding
possibilities available through Digital
Europe, REACT-EU or cohesion policy
instruments, to help the sector recoverand tackle future challenges.
Over the past months since thebeginning of the crisis, I have received
all the representatives of the sector tohear their concerns and gather data
about losses due to restrictive measuresthroughout Europe. However, it is fair tosay that the full impact of the ongoing
COVID-19 crisis on the cultural sectors
has not yet been assessed, due to thesevere lack of data. Specific data isextremely important to respond rapidly
and identify the best possible tools to
support the sector. The findings of thisstudy will be instrumental to define
suitable responses to this unprecedented
crisis, and make sure that the measures
are targeted and efficient.
I encourage you to read this very
interesting study that shows, once more,
the importance of this sector for oursocieties and economies.

9

Editorial

CCIs could become the N°1 allyof the European recovery

Jean-Noël Tronc
President GESACCEO SACEM

The study presented in this document
was commissioned by GESAC, which
represents over one million creatorsand rightsholders in Europe, and carriedout by EY Consulting. It serves two
purposes. First, it provides accurate
data on the massive economic impact of
the COVID-19 crisis on the cultural andcreative industries in Europe. But it also
asserts that this sector, an economic
heavyweight at the heart of Europe’ssocial fabric, could become the number
one ally of the European economic“

CCIs contribute toEurope’s identity,
diversity andregeneration.
recovery.
Indeed, the current crisis is all themore serious as it affects a sector as
dynamic as it is vulnerable; as essential
as it is diverse. CCIs are a world ofsmall businesses and freelancers (whorepresent one-third of workers in thecreative economy) as well as large firms,
sometimes leaders at the international
level. They contribute to Europe’s
identity, diversity and regeneration, witha proportion of women in employment
higher than in the European economy(48%) and a creative workforce younger
than the average in 21 of the 27 Member
States. And cultural activities – includingmusic, literature, visual arts, cinema,
museums, theatres, architecture
and video games – are vectors ofcommunication, inclusion and social
cohesion.

10

But culture is one of the most impacted
economic sectors in Europe, with amassive drop of 31% of its revenues
in 2020 due to the COVID-19 crisisand full recovery not expected before
2022. This situation might weaken theentire CCI value chain for a very longtime: artists, producers, publishers,
technicians and, of course, authors, who
are the fundamental but also the mostthreatened link in the sector.
Fortunately, it’s not too late to takeaction. If specific measures and recovery
plans are put in place, CCIs could bemuch more than “one of the problems tobe solved” following the crisis, becoming
a significant part of Europe’s solution.
That is why we, the European authors’
right societies, suggest to the authorities
that they implement concrete solutions
to tackle three main challenges:• Financing the cultural recovery bypromoting massive public and private
funding for cultural and creative
businesses, non-profit organizations,entrepreneurs and creators• Empowering CCIs to reinforce theirpositive impact by ensuring a solid legal
framework, allowing an adequate returnon investment and guaranteeing fair
remuneration for creators• Preparing for the future by using thecultural and creative industries – andthe multiplied power of their millions
of individual and collective, private andpublic talents – as a major acceleratorof social, societal and environmental
transitions in Europe.

Editorial

The full power of culture
After a first report published with GESAC in 2014, EY Consulting
took up the challenge of producing this second edition at the endof a dramatic year for the cultural and creative industries (CCIs),
both in Europe and around the world.
Marc LhermittePartner, EY

The analysis shows that the European
cultural and creative economy lost
almost a third of its activity in 2020.
Culture was the first to suspend mostof its live and retail activity – and it willprobably be the last to resume without
constraint. Only air transport canchallenge culture for the unenviable
position of the most affected sector. Yet
it is undeniable that other industries
have been able to better explain theirvalue and potential, and channel public
support.
Our report also shows the powerof culture, its dynamism and its
contribution to the EU’s global influence.
Based on a massive turnover of€643 billion in 2019 (more than thetelecommunications, pharmaceuticalor automotive sectors), the value ofthe creative ecosystem, diversified
and innovative by nature, lies above allin the 7.6 million people who create,produce and disseminate the artistic act– 700,000 more than six years ago. And
the balance of trade in culture posted a
net surplus of €8.6 billion in 2019.
The EY team would like to extend its
warmest thanks to GESAC and its
partners for their incredible support
and collaboration, and to the dozens ofprofessionals, experts and creators who
provided insights and convictions so that
Europe can use the full power of culture.

Scope
This study covers the 10 corecultural and creative sectors thathave already served as the scope ofthe first report on CCIs in Europe,
published in 2014 by EY andGESAC:• Advertising• Architecture• Audiovisual• Books• Music• Newspapers and magazines• Performing arts
• Radio• Video games• Visual arts

For the sake of rigor andconsistency, we have decided tostay close to the UNESCO definitionof CCIs as activities “whose
principal purpose is production
or reproduction, promotion,
distribution or commercializationof goods, services and activities
of a cultural, artistic or heritagerelated nature.” Therefore, themain data shown in this report does
not include certain other “creative
activities,” such as fashion, jewelry
or industrial design – nor sectors
where creativity plays a central
role, such as luxury goods or

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

gastronomy, which are sometimes
included in CCI statistics, such as
those of Eurostat.
The geographical scope of thestudy is the European Union (EU)and the United Kingdom (UK),known as the EU-28. Unlessotherwise stated, all references
to the EU in this study refer to thescope of the EU-28.
Unless otherwise stated, allreferences to creators refer toauthors, performers and otherartists.

11

01

Before COVID-19
The full power ofculture and creation

12

The cultural and creative economy
is now a European heavyweightAt the end of 2019, the core
activities of the cultural and creative
industries (even without including
other industries or adjacent activities,
such as industrial design, fashion or
gastronomy) represented a total added
value of €253 billion,1 or 1.7% of EU
GDP, up 5% on 2013.
In terms of turnover, creative
businesses, organizations, freelancers
and creators generated €643 billion– €93 billion more than in 2013.
When total revenues are measured
in relation to EU GDP, the sector
accounts for about 4.4% of theEuropean economy.
Before the start of the COVID-19 crisis,
the cultural and creative economy was
growing steadily in the EU. From 2013
to 2019, it grew by 2.6% per year,
while the EU average GDP growth was
2.0%.

The contribution of CCIs to theEuropean economy is greater than thatof other sectors, which are generally
considered to be landmarks of the
EU economy: for example, the CCI
GDP is 1.4 times greater than that oftelecommunications and 2.3 times
greater than that of the automotive
industry.
And its growth between 2013 and2019 (2.6% per year) exceeded thatof the construction and automotive
sectors (2.5% and 1.6% respectively).
The sector also stimulates the growthof several other industries – suchas tourism, high technology, digitalindustries, transportation andtelecommunications – that are bothsuppliers and customers of CCIs. The
overall spillover when these impacts
are included confirms CCIs as a
key driver of growth for the whole
European economy.

Turnover and added value in 2013
and 2019, and share of GDP(in € billion and %, EU-28)

+17%
550

643
(4.4%)(4.2%)

213

253(1.6%)(1.7%)

2013

2019

Added value

TurnoverSources: Eurostat; GESAC; professionalorganizations; EY modeling and analysis 2020.

Added value by sector in 2019 (in € billion; EU-28)

3,082

Business services

737
691
668

Construction
Financial services
Transportation and logistics
Accommodation and catering
Utilities
Cultural and creative industries
Agriculture, forestry and fisheries
Telecommunications
Chemicals
High-tech goods
Pharmaceuticals
Automotive
Textiles, leather and clothing
Aerospace
Oil and gas extraction

379
376
253
201
187
176
140
122
107
59
44
31

Sources: Oxford Economics – Global Industry Scenarios; EY modeling and analysis 2020.

1

Without double counts.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

13

In 2019, CCIs employed more than 7.6 million people in the EU
In 2019, the core activities of the cultural and creative
sectors employed 7.6 million people in the EU.
Within the CCIs, four sectors provide employment for morethan one million people. Together, they accounted for 68%
of the total (7.6 million): visual arts (1.9 million), music (1.2
million), AV (1.1 million) and performing arts (1.0 million).
Employment in the creative and cultural sectors grewsteadily between 2013 and 2019, from 6.9 million to
7.6 million people,2 a slightly higher growth rate (1.9%)
than the European average (1.3%). In six years, creative
businesses and organizations, producers, developers,
distributors, creative agencies, editors, broadcasters andmuseums created around 700,000 new jobs in Europe.
At the end of 2019, CCIs had a much larger workforce
than other leading sectors of the European economy:
for example, 2.9 times more than the automotive
industry and 6.3 times more than chemical industries.

could reach 8.7 million people,3 the difference beingin occupations outside the cultural sector (e.g.,industrial design). If fashion and high-end industries(e.g., luxury goods and services) are included, the total“creative” workforce reaches 12 million people.4

Employment by sector in 2019(in million jobs; EU-28)
Sources: Eurostat – Business Sector Profile; EY modeling and analysis 2020.

12.1
10.7
10.3

Construction
TourismTransportation and logistics

7.6

Cultural and creative industries

2.6
1.3
1.2
0.9

Automotive
Utilities
Chemicals
Telecommunications

According to reports based on a much broader definitionof the creative industries, the total “creative” workforce

1,890

Employment by CCI sector in 2019(in ‘000 persons employed, EU-28)
Sources: Eurostat; GESAC; professional organizations; EY modeling and analysis 2020.

1,192

1,122
1,001
903
670

619

608

81
Visual arts

2
3
4

Music

Audiovisual Performing Advertising Architecture
arts

Books

Without double counts.
Cultural statistics – 2019 edition, Eurostat, 2019.
Boosting the competitiveness of cultural and creative industries for growth and employment, European Commission, 2016.

14

Newspapers Video games
and magazines industry

56
Radio

Across Europe and across all sectors, the mosaic
of creative industries is showing its diversity
Overview of creative sectors
In terms of turnover, the three main areas of activity are
the visual arts (€138 billion), advertising (€129 billion)
and AV (€119 billion) sectors, which together account foralmost 60% of the CCIs’ total revenue. But growth rates show
variations between sectors.
The video games sector experienced the strongest growth(+5.8% per year) between 2013 and 2019, more thandoubling its turnover in six years. The sector relied on thestrong growth of its online activity, particularly in the main
European markets (+155% in France, the UK, Germany
and Spain combined), thanks to intense innovation and thesearch for a greater experience for players (new types of
consoles, better quality of visual effects, etc.) and the movetoward free game models, which rely on in-game sales rather
than charging to join the game.
The advertising sector grew faster than the European
average (+5.5% per year between 2013 and 2019), thanks

+14%
138

+38

122

After the difficult times that followed the economic crisisof 2008, architecture was able to grow by 5.3% between
2013 and 2019, mainly due to strong real estate activity
in general and in the area of sustainable renovation inparticular, as well as increased demand for integrated
service offerings, from design to construction.
Music also experienced sustained growth (+4%), half ofwhich was due to live performance (+4.8%), while theperforming arts (+2.9%) and visual arts (+2.2%) experienced
a strong development in some countries. Performing arts
also grew by 33% in the Czech Republic and 53% in Slovakia.
The visual arts market grew by 50% in Denmark, reflecting
the “golden age” that the country entered 15 years ago,according to art critics.

Turnover by CCI sector in 2013 and 2019 and 2013-19 growth rate(in € billion, EU-28)%

129

to the strong growth of online advertising (+12.3% overthe period) and the economic development of Central andEastern Europe (+8.1% per year).

Sources: Eurostat; GESAC; professional organizations; EY modeling and analysis 2020.

+11%

Turnover in 2013

Turnover in 2019

119
107
94

-10%
97
88

+36%
52

+24%
41

39
33

+1%
37 37

+26%
31

+152%
24

24
9
Visual arts

Advertising

Audiovisual Newspapers Architecture Performing
and magazinesarts

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

Books

Music

Video games
industry

+7%
10 10
Radio

15

In the AV sector (+1.8%), the increase in European featurefilm production (+2% per year since 2014), the dense
network of broadcasters, producers and distribution
networks, and the emergence of video-on-demand (VOD)
platforms (+383%) contributed to the growth of the sector.
The radio sector (+2%) benefited from the emergence of
podcasts, a small but growing market (€39 million: +69%
between 2018 and 2019), but a decline in advertising
revenues was beginning to have an effect. However, othersectors experienced less dynamic trends. Notable examples
include the book industry (+0.5%) and the newspaper andmagazine industry (-1.7%). The press sector has, of course,
been facing a myriad of challenges for years, with a decline
in print advertising revenues (the “paper” medium stillaccounts for around 86% of the sector’s revenues). The booksector has been fairly stable due to a decline in physicalsales, despite the increased support of e-book sales.

While the largest CCI markets are in the largest EU countries,
Central and Eastern Europe is the fastest-growing creative economy
In total, the five largest CCI markets (France, Germany, Italy,
Spain and the UK) account for 69% of total CCI turnover inthe EU. However, the strongest growth is mainly recorded
in Central and Eastern Europe. In countries such as Czech
Republic and Romania, three specific sectors experienced
dynamic growth, such as advertising, architecture and video
games.
CCIs contribute to the national economy of all Member
States, from 0.9% in Greece to 3.0% in Estonia. In four
countries, the cultural and creative economy accounts formore than 2% of national GDP. Among them, in Estonia, theGovernment has implemented a proactive cultural policy,
and public spending on culture is twice as high as the EU
average. In Portugal, UNESCO highlighted the work of the
non-profit organization ADDICT,5 which strives to create afavorable environment for local CCIs by creating a platform
for a real industrial and artistic strategy.
At the time of Brexit, in 2019, UK CCIs accounted for 20%of the turnover of EU-28 CCIs (€128.6b) and nearly 17% of
employment (1.275 million jobs). In addition to a significant
weight in European CCIs, the UK is a European hub for many
CCI sectors. In particular, the UK participated in 42% of thecooperation programs within Creative Europe (making it thesecond-largest European partner in the program).
5>2%
1.5% - 2%
1% - 1.5%<1%

Share of CCIs' value added in total country value added(in % of national GDP; EU-28)
Sources: Eurostat; GESAC; professional organizations; EY modeling and analysis 2020.

ADDICT, Creative Industries Agency Portal, UNESCO, 2020.

Share of the UK in EU CCIs in 2019 (EU-28)
EU-27

TurnoverJobs

16

Sources: Eurostat; GESAC; professional organizations; EY modeling and analysis 2020.

UK

80%

20%

83%

17%

The growth of CCIs is basedon long-lasting trends
Offer and demand for culture are dynamic throughout Europe
The CCI economy in Europe can rely on structural dynamics
that have been present for years and will not disappear withthe current crisis.

Number of feature films production
and cinema attendance (in millions; EU-28)
Sources: European Audiovisual Observatory, February 2020.

First of all, European citizens’ demand for cultural content
and services has increased in recent years. Householdspending on cultural goods and services increased by 12%
between 2010 and 2015, an annual growth rate of 2.2%.
This appetite is reflected in most cultural sectors.

1,615

For example, European cinemas recorded 100 million moreadmissions in 2019 than in 2014. From 1,615 in 2014, thenumber of films produced in the EU rose to 1,847 in 2018,
an increase of 14%.
The number of new books published in the EU rose from545,000 in 2014 to 585,000 in 2018, with a record highof 610,000 in 2017.6 In the book industry, the number ofprinted titles (active catalogue) reached an all-time highof 11.25 million in 2018, compared with 9.7 million in2014 (+16%).

911

2014

N.A.

985

954

1,007

2017

2018

2019

1,748

1,737

978

992

2015

2016

Feature films produced
6

1,847

1,706

AttendanceEuropean Book Publishing Statistics 2018, Federation of European Publishers, 2018.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

17

A unique production
and distribution capacity
The growth of CCIs in the EU in recent years has also
been supported by a large interlinked and interdependent
production and distribution capacity underpinningthe entire value chain, from small enterprises to large
multinationals, public and non-profit institutions. The offline
distribution network is an essential link in the CCI value
chain, as it allows the public to discover works outside theclassics. Cinemas, bookshops, concert halls and festivals
are also guarantors of social links in the territories.
From 2014 to 2018, 5 of the top 10 global markets forfeature film production were EU countries: France, Germany,
Italy, Spain and the UK. While production increased (+14%
between 2014 and 2018), the number of physical screensincreased by 10% in the EU to 33,112 in 2018 together
with a sharp increase of in-territory online offer – bothin terms of content availability and online services.

Digitization has accelerated
Culture and creative works now occupy a central place in thedigital economy, increasing the visibility of the entire value
chain of authors, performers and business partners, andembracing new ways to enlarge audiences. Between 2013
and 2019, the turnover generated by online cultural content,
services and works increased by 92% (+12% per year).
CCIs have also embraced digital technologies from amarketing standpoint. In the performing arts, the useof data and the development of innovative performance
management methods have, for example, further
streamlined the filling of theaters or museums.7
New production and distribution channels, made possible
by technology, have emerged, such as print-on-demand,
digitization of archive catalogues and self-publishing.
And let’s not forget that CCIs have always been pioneers
in the adoption of new technologies: virtual reality,
augmented reality, blockchain and artificial intelligencehave been deployed and experimented with by creative
organizations and creators over the last decade.

7

18

L’économie mosaïque, EY, 2019.

The new mix of online and offline activities
raises new challenges and opportunities
In the past few years, digitization of the sector undeniably
fueled the growth of online platform-based services
providing access to cultural and creative works. In 2018,
81% of Europeans used the internet for music, videos andgames – more than for shopping or social networking.
The main online players provide access to cultural andcreative works as a central part of their offer. Intermediaries,
with far greater financial resources than businesses andcreators in CCIs, authors and other creators, have built
up vast catalogues and increasingly monetized them.
And some of the major online services havebecome very influential producers and publishers,
and, at the same time, distributors of works.

Internet users having carried out the following activities
at least once in 2018 (in % of total internet users; EU-28)
Sources: Digital Economy and Society Index, European Commission, 2020.

81%

Music, videos and games

News

72%

Shopping

71%

Banking

66%

Social networks

65%

60%

Video calls

31%

Video-on-demand8• Finding the real market value for creative works inan online environment: digital consumption, given theattractive price of streaming subscriptions to combat musicpiracy, for example, should be paying more. In the music
sector, on a streaming platform, an author, for example,
only earns between about €0.004 and €0.007 per stream.
This means that an artist has to make between 2.5 and 4.4
million streams per year to earn €17,819, the EU median
wage in 2019. For a German artist, it would take between
3.3 and 5.9 million streams to earn the equivalent German
median income (€23,515).
• The challenge of online distribution: the conversion of
independent cultural retailers to online services while
dominant international players are gaining traction further
challenged the opportunities for local works and theirdomestic distribution opportunities during the pandemic(for example, the number of bookstores contracted (from2011 to 2018, the number of companies registered asbookstores in Europe decreased by 15%, from 30,856 to
26,060)). Similar challenges arose for specialty film and AV
retailers and, to a certain extent, cinemas and distributors.
• Intermediary platforms: these benefit quite widely fromthe partial or total gratuity they can offer. Recent European
directives may help ensure a better functioning of themarket but, until then, the revenue potential that CCIs
can derive from digital access has, so far, been largely
untapped.
• Piracy: despite the explosion of legal online offerings, illegal
consumption remains a major problem for CCIs. Every year,
counterfeiting and piracy lead to a loss of direct sales of€50 billion and the loss of 416,000 direct jobs in the EU.8
Small and medium enterprises (SMEs), which account for
84% to 99% of CCI companies depending on the country, areparticularly exposed.
Yet the physical experience remains an essential part ofthe creative economy. In the AV repertoire, collections
from digital sources represent only 3.7% of the world's
total collections – a drop in the ocean considering that
Europeans consumed about 100 million hours of online
video every day in 2016. According to GESAC, in Europe,with all repertoires combined, the annual digital incomeof creators amounts to 17% of the sums collected.

23%

Selling online

Doing an online course

On the other hand, technology giants and purely digital
players raise fundamental challenges for CCIs, including:11%

IP Action Plan, EU Commission, 2020.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

19

ocu

Focus

Collective management organizations:protecting and empowering
creators in times of crisis

The COVID-19 crisis has been devastating for the entire
cultural sector. From the venues to the rights holders to
the creators themselves, no one in the sector has beenspared. And collective management has once again
proven itself as a resilient and indispensable model for
culture in general and for creators in particular.

Immediately, collective management
organizations (CMOs) in all sectorsdelivered first aid to the mostvulnerable creators and rights
holders, through grants, loans
and advance payment of royalties.
Hundreds of millions of euros weremade available and distributed tocreators throughout Europe.

they encouraged the streaming ofcanceled events while developing live
broadcast licensing systems to enable
creators to make the most of theless-than-ideal situation in which they
have to operate. Joint efforts havebeen taken to address and mitigate
the concerns of clubs and other publicvenues.

In Germany, for example, where
77% of musical authors' income
comes from collective management
organizations, GEMA has been on
the front line and provided grants
and advances to thousands ofcreators as early as March 2020. The
German CMO has also been an active
partner of the Federal Governmentin ensuring that the public money
spent on cultural infrastructure (€30
million dedicated to clubs, festivals,etc.) is properly distributed. This
direct and structured representationof creators remains essential for
authors who need the power of a CMO
to defend their fair remuneration(especially at a time when their works
are increasingly used online); to raiseawareness among all stakeholders,
including politicians but also bankers,
the media or the public; and totranslate the complex issues facing
authors into policy recommendations,such as Directive on Copyright in the
Digital Single Market.

And let’s not forget that CMOs
promote cultural diversity
and the development of new
generations of creators throughthe funding of cultural activities.
EU policy documents have notedthat “collective management
organizations play, and should
continue to play, an important rolein promoting the diversity of culturalexpression, both by providing market
access for smaller and less popularrepertoires and by providing social,
cultural and educational services forthe benefit of their right holders andthe public.”

All over Europe, specific campaigns
to promote creative works and toaddress music users’ needs have beendeveloped by CMOs. To name a few,

20

CMOs have done much to protect
the creators, the most essential andvulnerable link in the creative chain.
But these organizations themselves
have suffered greatly from thecrisis. Even though they have done
everything possible to adapt theirstructure and reduce their fixed costs,
they have emerged extremely fragile
from this dramatic period. They – andthe creators they represent – havehigh and urgent expectations ofEurope and the European institutions.

The cultural ecosystem remains fragile,
but it is a net exporter
A world of small enterprises and freelancers
Most of the companies in the CCIs are SMEs or evenmicro-enterprises. Depending on the sector, the shareof employment in SMEs in CCIs rises up to 83%, while
they represent 29% of employment in the EU. As far
as employment is concerned, the importance of microenterprises is enormous in some sectors: they account for
83% of jobs in the photography sector and 75% in design
activities. Programming and dissemination activities are an
exception: large companies account for 66% of the workforce
in this sector.
Furthermore, freelance work appears as a structural featureof employment in CCIs. One-third of workers are freelancers,a rate twice as high as in the EU economy as a whole(14%). This high rate reflects the fact that CCI activities areorganized on a project-by-project basis – the economy of
CCIs could even be called a prototype economy. Freelance
status gives workers more flexibility in their professional
career path, but it is also accompanied by greater
vulnerability.
Indeed, the COVID-19 crisis has also highlighted existing
gaps in the social and economic protection offered tofreelancers, whether creative or commercial, including
authors, performers and artists.9 In many countries, selfemployment still prevents people from fully benefiting fromthe same social and economic protection schemes as fulltime employees.
As the crisis has accelerated the implementation of digital
distribution models, issues related to the disparity ofrevenues generated by different forms of online and offline
operations have arisen, particularly with regard to the abilityof the CCI workforce and organizations to make a living andrun sustainable businesses.

Share of employment in microenterprises by sector
in 2016 (in % of total employment; EU-28)
Photographic activities

83%

Specialized design activities

75%

Audiovisual and music production activities

37%

Printing and reproduction of recorded media

31%

Whole economy (non-financial business economy)

29%

Programming and broadcasting activities

9%

Sources: Cultural Statistics, Eurostat, 2019.

Freelance employment in CCIs in 2019 (EU-28)
Sources: Cultural Statistics, Eurostat, 2019.

Freelancers

Employees

33%
Cultural andcreative industries

Total EU-28

67%
14%

86%

As a result, many creative workers – authors andperformers, as well as technicians and administrative staff– are now looking for work outside CCIs, while thousands of
CCI operators have been weakened during the pandemic. In
this context, cultural diversity in CCIs is essential to ensurecompetitiveness and the ability to maintain the level of skills
and entrepreneurship required throughout CCI value chains.
This is all the more difficult as years of orderly government
support are threatened.

9

Culture in crisis: Policy guide for a resilient creative sector, UNESCO, 2020.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

21

Until now, creative and cultural entrepreneurs have been financially resilient
and less supported by governments
In 2018, CCI companies had a higher three-year
survival rate than companies in the EU economy
as a whole (61.3% compared with 58.0%).
After five years, 48.3% of CCI companies are still active
compared with 44.6% of companies in the entire economy.
The gap between CCI companies and the business economy
therefore widens slightly, from 3.3% three years after
the creation of a company to 3.7% five years later.

Average 3 and 5-year survival rate of businesses
in the EU-28, in 2019
Sources: Eurostat Structural Business Statistics; EY modeling and analysis 2019.

Total EU-28 (except holding activities)
Cultural and creative industries

58.0%

61.3%

Resources from the public sector represented 10.8% of
total CCI turnover in 2018 in Europe, 0.7 percentage point
less than five years earlier (11.5% in 2013). The shareof CCIs in total public expenditure has decreased slightly
from 0.96% in 2013 to 0.95% in 2018. This is partly due
to cuts in local government budgets, which represented
54% of public spending on culture in the EU in 2018.10
Entrepreneurs in the creative industries across Europe
generally do not see culture and creation as a priority fornational governments. Indeed, 46% of respondents to the
Cultural Climate Barometer ranked the low priority of cultural
sectors in government budgets as the number one issue.11

44.6%

Average 3-year survival rate

48.3%

Average 5-year survival rate

Europe has increasingly exported its soft power globallyshare of European exports, this increased slightly between
2012 and 2017, from 1.4% to 1.5%, thanks in particular to
the increase in exports of AV and musical works.
However, these figures do not fully reflect the role of CCIs in
European “soft power.” The European music scene remains
very dynamic: in the UK, music industry exports increased
by 9% between 2018 and 2019,12 and by 7% in France.13 And
European architects have won 19 awards since the Pritzker
Architecture Prize was launched 42 years ago.
More generally, 62% of Europeans surveyed in the 2017Eurobarometer on cultural heritage believe that European
culture will become more dynamic and widespread in theworld, thanks to globalization (compared with 58% in 2007).14
The EU’s trade balance in cultural goods has been in surplus:
in 2017, it exported €28.1 billion worth of cultural goods
compared with €19.5 billion worth of imports. A total of
67% of exports concern jewelry and works of art, while 17%
concern books and physical support for musical and AV
works. Although cultural goods represent a relatively small

Government expenditure by function – COFOG, Eurostat, 2020.
Cultural Climate Barometer, Budapest Observatory, 2018.
Music by Numbers 2020, UK Music, 2020.
13
Bilan économique 2019, Le Bureau Export, 2020.
14
Special Eurobarometer 466, European Commission, 2017.
152020 World Press Freedom Index, Reporters Without Borders, 2020.
10
11
12

22

According to Reporters Without Borders, the majority of EU
countries lead the world in terms of media freedom, despite
the growing difficulties in some Member States: of 47
countries classified as “good” or “satisfactory” in terms ofpress freedom in the world in 2020, 21 are in the EU-28.15

ocu

Focus

Culture in the city:
the role of flagshipmuseums in Europe

The creative industries, culture and entertainment are
increasingly strong value drivers, placing branding andeconomic development at the heart of European cities
and communities. Between 1985 and 2019, 60 cities
were designated as European Capitals of Culture.

Museums play an important role in structuring andpromoting the values and visions of Europe and its
cities. The EU-28 has more than 28,000 museums,
making it one of the richest museum regions: 30% of theworld's museums are located on a continent with only
7% of the world's population.16

And flagship museums have played a considerable rolein urban regeneration strategies, particularly those
aimed at the revitalization of public spaces and therehabilitation of declining industrial areas. In recent
decades, urban planners and politicians have tried toreplicate the “Bilbao effect,” using leading architects
to build museums, libraries or congress centers, and totry to revive the economies of cities: from the Centre
Pompidou-Metz to the Louvre-Lens, from the Mucemin Marseille to the Kunsthaus Graz, from the Phæno
Museum for the Popularization of Science in Wolfsburg
to the Centre for Culture and Congress in Lucerne.

In a 2018 article for the Journal of Urban Design,urban planning researchers noted positive effects interms of the cultural and tourist dynamics of cities. The
authors of the study highlighted other consequences:
the realization of the Phæno in Wolfsburg, for example,
has strengthened the confidence of politicians and local
administrations in their own ability to make their cities
more vibrant. In any case, these exceptional buildings
have helped to open up previously isolated and lessdynamic urban areas. Beyond the economic impact, itis these structural changes that seem to be the most
tangible long-term positive effects of the “museum
strategy” for the development of cities.

16

Museums around the world in the face of Covid-19, UNESCO, 2020.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

23

However, Europe's role on the global stage of culturaland creative industries may change over the next decade
Europe is an important player inthe field of culture, thanks to thecreativity and success of its authors
and performers and the successof CCI businesses. Preserving andencouraging offline distribution
channels outside Europe will remain
essential for the economic healthof European players, as well as
for adapting to the ever-changing

online marketplace. Indeed, there isincreasing competition from dominant
non-European international online
service platforms with their own
programs and production capacities,
and by the increasing concentrationof companies in this field.
If Europe is among the leaders incontent creativity, notably thanks

to a unique and leading practice ofregional and global cooperation in
funding, the mix could put European
works under pressure outside Europe
in terms of prominence and visibility.
The lack of technological leadershipin Europe could reduce the market
share and visibility of European
content on the world stage.

Cultural and creative professionals are at the heart ofEurope’s social fabric, its diversity and regeneration
Gender and diversity balance is underway
In 2019, 48% of jobs in CCIs were held by women in the EU27, compared with 46% in the European economy as a whole.
Looking at full-time employment, 83% of men employedin this sector worked full time – seven percentage points
less than in the whole EU economy (90%). By contrast, 67%
of women worked full time, which is in line with the entire
economy (68%).

representation at management level. In the music industry,
IMPALA recently published a Diversity and Inclusion Charter
that sets out a road map to stimulate diversity in the
independent music sector through annual surveys, sharingof best practice, production of advice on prejudice, and thecreation of European awards for diversity and inclusion.
Employment by sex in the EU-27, in 2019
Sources: Cultural employment by sex, Eurostat, 2020.

The proportion of women working in CCIs is higher than the
proportion of women working in the entire economy in 23
out of 27 Member States. While women represent more than
50% of the total labor force in only two countries, this is thecase in 12 Member States for jobs in CCIs. In the three Baltic
states and Luxembourg, women represent more than 55% of
the creative workforce.
The challenge is, of course, far from over: for example, theshare of films directed by women in Europe grew slowly
between 2003 and 2017, from 17% to 22%.
Prior to the onset of the COVID-19 crisis, European CCI
stakeholders were aware of the need to protect and promote
their diversity in all sectors – whether on stage, off stage
or on screen. Trade unions and professional organizationsin the CCIs are pushing for diversity through a number of
incentives. A Good Practice Handbook for achieving genderequality and promoting diversity in the European AV sector
has recently been published by professional organizations,listing dozens of initiatives carried out by CMOs, professionalorganizations and public authorities. For example, themembers of UK Directors (the CMO representing the AV
sector in the UK) have taken proactive steps to improve

24

48%

46%

Women employed
Cultural and creative
industries

Women employed
Total EU-27

European films produced by female directors
in 2003 and 2017
2003
2017

17%
22%

Sources: Female directors in European cinema, European Audiovisual Observatory, 2019.

Creative jobs tend to be held by younger and higher-educated people than the average
Share of people under 39 working in CCIs
by country in the EU-27 in 2019>48%
45%–48%40%–45%<40%

In 2019, 43% of jobs in CCIs were held by people under
the age of 39 in the EU-27, compared with 41% in the
EU-27 economy. The creative workforce is younger thanthe overall workforce in 21 of the 27 Member States.
In addition to the attractiveness of culture andcreation, the sector draws younger generations
who, according to multiple studies, are increasingly
looking for a “meaningful” working life.17
By 2019, almost 60% of the CCI workforce in the EU-27
will have a higher level of education, which is considerably
higher than the average (34%) for the entire economy.

Source: Cultural employment by age, Eurostat 2020.

17

Freelancing in America 2019, Upwork and Freelancers Union, 2019.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

25

Interview“

ntervie

CCIs are proving to be a source ofinspiration to meet the challenges
of solidarity and sustainability

Here, creativity is everywhere,
conceived by all for the good of all.
What do culture and creative industries
represent in a metropolis such as
Nantes?
In Nantes, it is the spirit of Jules Vernethat blows on the cultural and creative
industries. From Royal de Luxe in the
1990s to the Machines de l'île with theGreat Elephant today, creative audacity
finds its sources of inspiration in theculture and history of the city. On thewestern tip of the island of Nantes,
the former Halles Alstom, which once
housed the shipyards, now house the
new Quartier de la Création. In thisarea, which brings synergy to higher
education and economic activities,some 5,000 creative people will sooncross paths to imagine, together, thecity of tomorrow. The sector represents
13,700 purely creative jobs in Nantes:
in culture, architecture and design inparticular.
What are the challenges facing thiseconomic sector?

In the current context of the healthcrisis, the cultural and creative
industries are proving, in Nantes as
elsewhere, to be a source of inspiration
to help inhabitants meet the challenges
of solidarity and sustainable transition
together. Nantes loves and encourages
artists and creative people of all
kinds. Here, creativity is everywhere,
conceived by all for the good of all.

26

Johanna Rolland
Mayor of Nantes,
President of France
urbaineIs there an expectation of Europe?

The EU has already enabled Nantes
to showcase its creative initiatives, tohelp them accelerate and grow. The city
was granted the European Capital of
Innovation Award 2019, which rewards
this ability to involve all citizens inmajor projects and opens up interesting
prospects for cultural and creative
industries.

iewpoin

Viewpoint

Solving (some of) the urgent
problems of our timeby Axel Bienhaus and Joachim Schares, Managing Directors,
AS+P Albert Speer + Partner GmbH (architects and planners)

Architects, proud and active membersof the vast creative ecosystem, have
had to navigate the turbulent watersof 2020 for themselves and theirclients.
Internally, the most significant
changes to date have been theintensive use of the home officeand the restrictions on contact
with authorities, planning partners
and clients. This way of working
has a greater influence on creative
processes than on standardized work.
Nevertheless, we have succeeded inreorganizing the work.

The widespread use of newtechnologies has had an ambivalenteffect. It has become very difficult
to attract new clients and to conduct
meaningful, informal exchanges. On
the other hand, the elimination of
travel has led to significant efficiency
gains. Appointments in different cities,
previously scheduled over several
days, can now be made in one day,resulting in significant savings on
travel costs, which partly offset theadditional IT investment.
The pandemic has had very different
effects in our different areas ofwork. The strict local lockdown madecommunication with our customers
more difficult and slowed down
administrative processes. However,there were great differences inflexibility and digital preparedness
between municipal governments
and businesses: from virtually no
disruptions to complete shutdowns forseveral weeks.

projects were heavily affected, as was
the aerospace industry as a whole.
Taking all of these effects together,
we have lost about 10% of ourefficiency in 2020. In the long term,
we expect a decline in demand for
office construction, sports and event
infrastructure, and probably also for
airports and airlines.

Axel BienhausManaging Director

These declines are offset byopportunities in other areas. Futurelabor and climate challenges will havean impact on the use of real estate andmobility patterns. This will generatedemand in the areas of urbanization,
spatial planning and transportation.
CCIs are one of the few industries inwhich human intelligence cannot be
replaced by artificial intelligence orrobots. They can therefore create asustainable platform of prosperity for
Europe in the long term. The common
market of architecture does not yet
exist because the working methodsof architects and urban planners arevery different from one Member State
to another. More common regulations
should be introduced, without overregulating. Tackling this problem
would be an important improvement,so that talent can move more flexibly
from one country to another.

Joachim Schares
Managing Director

The creative industries can contributeto solving all the urgent problems ofour time and our profession. Europe
is particularly fortunate because
its creative economy ... is creative.
However, we must protect and defend
our capacity and freedom to create.

Planning procedures and residential
projects continued with almost no
disruption, but office construction

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

27

02

Because of COVID-19
The sharp fall28

In 2020, the economy of culture and creation
will lose approximately €200 billion in revenues
According to EY’s analysis, the total
turnover generated by CCIs in the
EU will decrease from €643 billion in2019 to €444 billion in 2020. This
represents a net decrease of €199
billion or 31% of total revenues in 2019.

Before the start of the COVID-19
crisis, most professionals surveyed by
EY expected this trend to continue,
potentially leading to a turnover of€660 billion in 2020.

The comparison is even more negative
when looking at the trend for 2013–19.
During this period, the creativeand cultural sectors experienced
average annual growth of 2.6%.

Total turnover generated by CCIs
in the EU-28 (in € billion)

-31%

643
444

Sources: Eurostat; GESAC; professionalorganizations; Global Industry, Second Wave
Scenario, Oxford Economics, as of 7th September
2020; EY modeling and analysis 2020.

20192020 (estimate
with the impact of
the COVID-19 crisis)

CCIs will be more affected than most other industries
With an estimated loss of 31% of its 2019 turnover, the CCI
sector is one of the most affected in Europe, slightly lessthan air transport (-31%) but more than the tourism (-27%)
and automotive industries (-25%).
In addition to the impact of lockdowns and other restrictions,the relationship between culture and tourism is one of themain impact factors. Cultural tourism accounted for 40% of
tourism in the EU, according to the European Commission.
As of October 2020, the World Tourism Organization
recorded a 68% reduction in international arrivals in Europe.
When cultural activities were not canceled, travel restrictions
resulted in a very sharp drop of attendance. For instance,
the Rijksmuseum in Amsterdam now welcomes about 800
visitors a day, down from 10,000 daily visitors in 2019 (a92% drop), well below the 2,500 visitors allowed with strictsocial distancing.1 The Rembrandt House Museum, with
80% of visitors being international, expects to be back to its
normal affluence in 2024.

Estimated change in turnover 2019-20 by sector(in % of total 2019 turnover; EU-28)-31%
Cultural and creative industries -31%
Tourism-27%
Consumer electronics-26%
Automotive-25%
Aerospace-22%
Textile, clothing and leather-17%
Transportation and logistics-16%
Manufacturing-12%
Research and development-11%
Telecommunications-9%
Utility supply-8%
Business services-7%
Chemicals-6%Agri-food business-4%
Finance-2%
Air transport+4%

Pharmaceuticals
Total economy
1

Europe’s Museums Are Open, but the Public Isn’t Coming,
New York Times, 19 October 2020.

-9.4%

Sources: Global Industry, Second Wave Scenario, Oxford Economics,
as of 7th September 2020; EY modeling and analysis 2020.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

29

The shock wave will be felt in all cultural and creative
sectors, and full resumption of activities will not mean
the end of the crisis
Music and performing arts will be most impacted
Total performing arts revenues may fall by 90% and music
revenues by 76% due to massive restrictions on concerts,
plays and performances for most of 2020. Indeed, live
performances were among the first activities to be severely
restricted and will likely be among the last to resume without
restrictions. And the near impossibility of maintaining
rehearsals will further impede the release of future
performances.
In addition, for the music sector, the restrictions imposedon venues such as stores, bars and restaurants will also
seriously affect copyright (-35% for performing rights). The

decline in revenues could continue in the coming months,
due to the general economic situation. Given the way
royalties are distributed, these will be lost in 2021, andcreators' revenues will be affected until at least 2022, withno one really able to say when and how live performancesand events will recover from the fear of infection.
All cultural and creative sectors have been hard hit by
the crisis, and the revenue trends below reflect only partof the impact felt, as they do not take into account thehalt in production during the lockdown, which will only bemeasurable in 2021 and beyond.

Estimated change in turnover 2019-20 by CCI sector(in % of total 2019 turnover and in € billion; EU-28)
AdvertisingArchitecture

Audiovisual

Books

Music

Newspapers
and magazines

Performing
arts

Radio

-2

-9
-17
-22%
-28%
-36

-18
-26

-23%

-25

%

-20

+9% +2Visualarts

Video games
industry

-20%

-31%

-32%
-37

Average change
in turnover

-38%

-53

Change in turnover (in %)-76%

Change in turnover (in € billion)
Sources: Eurostat; GESAC; professional organizations;
Oxford Economics; EY modeling and analysis 2020.

30

-90%

iewpoin

Viewpoint

Culture feeds our souls
every dayby Angélique Kidjo

For many artists in Europe, the only
thing that keeps us afloat is our
authors’ societies. They are practicallya second home for us. They pay us,
keep us off the streets, allow us tocontinue to create, go back on stage
and hope for a better future.

Even though lockdowns are coming toan end and countries are starting toopen up, the payment of royalties isdelayed and based on the collectionsof the previous months and years. Thismeans that artists will suffer more in
2021 than in 2020.

“

The pandemic has
led us artists to think
more deeply about
how we are goingto make a living.

Indeed, there has been a transition
to live events and a renewed interestin streaming platforms as the main
outlet for music and audiovisual works.
As the industry builds around theseplatforms, producing artworks that are
better suited to them, they will be well
positioned to stay after the crisis.

a fairer and more equitable world,
where every artist has the right toexist through their work and to be paid
fairly. Without creators, there are noplatforms, so this imbalance must be
addressed if the sector is to rebound.

Culture and creativity will help Europe
in the months and years to come. It is
not just food that feeds us every day.
Each one of us listens to music. Whenyou get in your car, you listen to music,
when you go home, you listen to music,
on your wall there are paintings. We allneed our soul to be nourished by art,
and if we don't protect this art, there
will be serious consequences for oursocieties.

And Europe is the place to which
everyone turns when it comes toprotecting human rights, democracy
and art. This is a very importantmoment. The pandemic has led us
artists to think more deeply about how
we are going to make a living. Europe
must continue to set the standard
for copyright protection and commit
itself to supporting the creative sector
financially, so that writers, performers
and all those who decide to create canflourish when that better future arrives.

Yet online platforms cannot continue tomake so much money without us, thecreators, being paid fairly. Technology
must be a weapon that helps us create

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

31

Visual arts, books and AV activities are hard hit by lockdowns and travel restrictions
Closures of galleries, auction houses and museums, as wellas the absence of international tourists, have seriously
affected revenues in the visual arts sector.
According to UNESCO, one out of every eight museums in
the world may not reopen at all,2 and others will see theirresources severely shrink. The cancellation of art fairs (suchas Art Basel and hundreds of other events) and gallery
exhibitions will have a lasting impact on the emergence andvisibility of artists. In France, professional organizations
estimate that one-third of art galleries may not reopen.3 The
restrictions have also affected the activity of architects, withreal estate projects at a standstill and delays in the issuanceof building permits.
The AV sector is already facing major problems, such asa sharp slowdown in filming, higher financial and legalrisks when resuming production activities, and the closureof cinemas; hence the high vulnerability for the entire
distribution and production value chain in particular when
the festivals and markets experienced severe challenges
in operating. And even though the increase in online
distribution services (a rise in subscriptions in Europe ofbetween 40% and 75%) is expected to continue,4 revenues
generated by these services are not compensating the losses
from lack of physical exhibition and distribution options.
Furthermore, the challenge to bring audiences back totheaters – quickly and as massively as before, with 2019
being a record year in terms of admissions – will be a toppriority.

2345The same applies to the publishing sector. Of course,
e-commerce in books has developed, and the Frankfurt Book
Fair, for example, has gone completely online. However, sales
in bookshops have fallen by 75%–95% wherever there was a
lockdown.5

Number of museums worldwide at risk of never reopening
after the COVID-19 crisis
Source: Museums around the World in the face of COVID-19, UNESCO, 2020.

12.5%
1 out of 8 museums
may never reopen

UNESCO and ICOM concerned about the situation faced by the world’s museums, UNESCO, May 2020.
Résultat de l’étude d’impact de la crise sanitaire Covid-19 sur l’économie des galleries d’art, Comité Professionnel des Galeries d’Art, April 2020.
TV Viewing Trends, CISAC-Futuresource, November 2020.
The impact of the pandemic on publishing in Europe, International Publishers Association, October 2020.

32

iewpoin

Viewpoint

Culture helped Europeansin 2020, Europe must
now help culture
by Francesca Trainini, Chair of IMPALA, the European
association of independent music companies“

The music industry has been extremely resilientand innovative throughout the crisis ...
The impact of the COVID-19 crisis on
your business and sector

The music industry has already been
severely affected and is preparing
for a further decline. The impact
on revenues will be felt for years tocome. Live music came to a sudden
halt in the early days of the crisis,
and the recording industry sufferedfrom a drop in physical sales and otherrevenues. Release schedules havebeen completely disrupted, which
has affected revenues. In addition,
performing rights revenues in 2020are declining due to the closure andother restrictions imposed on cafes,
concert halls and other businesses
that play recorded music. Theserevenues from public performances
are generally paid to rights holders
the following year, which means lower
revenues for 2021 and beyond, even
if the rest of the economy begins torecover. In addition to the revenue
issue, the impact on the mental healthof artists and music professionals
should not be underestimated.
Challenges ahead

The music industry has been
extremely resilient and innovative
throughout the crisis, finding new
ways to produce music and make itavailable. Some of these innovations,such as live streams, are here to stay.

The industry is severely affected, but
not discouraged. Artists, labels andthe broader value chain will do theirpart by continuing to create, invest
and promote new music. But the EU
and national governments must also
support the sector, by extending key
measures until the crisis is reallybehind us, ensuring that support
schemes quickly reach those mostin need and allocating a significant
percentage of their recovery plans andother budgets to culture.
The role of culture in Europe

The cultural and creative industries
are one of Europe's main assets.
In economic terms of course, butalso much more than that. Their
contribution to the well-being ofEuropeans is enormous. We have seenthat culture has helped many of us
cope with the challenges of 2020.
What culture does for Europe is veryclear – the question now is what
Europe can do for culture.
Having already recognized culture
as a priority ecosystem, the EU
must now allocate to it a specificproportion of stimulus measures.
This is an opportunity not to be
missed the EU must now allocate to it
think strategically about its culturalindustry in the long term and develop
a sustained industrial policy.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

33

Digital income does not compensate for the loss of physical flows
With the succession of lockdown,
curfews and other restrictions, theshare of citizens using the internet
jumped from 81% on average to 94% in
Europe,6 ranging from 99% in Finland(from 88% before the COVID-19 crisis)
to 89% in Romania (from 64% before
the COVID-19 crisis). However, it is
widely considered in the sector thatphysical sales and experiences are a
crucial pivot of our cultural diversity
and an essential economic factor in
the sustainability of the sectors. They
provide an opportunity to discover not
only new authors and their works but
also vital distribution channels in termsof generation of revenues.
Advertising agencies revenues are
expected to decline by 28% between
2019 and 2020, due to reduced
media purchases by companies inmost sectors. As a result, television,
radio and internet broadcasters have
67

reported that they will be affected by
the COVID-19 crisis due to the decline
in revenues from the sale of advertising
space. Traditional media would be themost affected (-21.3% between 2019and 2020), but advertising revenues
from digital media could also decreaseby 5.5% year on year. This drop inrevenues will affect their financing
capacities for new works.
The video games industry seems to be
the only one to hold up, with revenues
expected to increase by 9% in 2020,
partly due to the increased appetite for
digital entertainment during lockdowns
in various European countries and theadvanced digitization of the market.
But even this sector is suffering a side
effect: the slowdown in international
hiring is exacerbating the industry’s
skills shortage. In 2019, 76% of UK
gaming companies reported difficulties
in finding qualified staff.7

Europe’s digital migration during COVID-19: Getting past the broad trends and averages, McKinsey, July 2020.
UK Game Industry Census, UKIE, 2019.

34

Estimated change 2019-20
in advertising revenues (from the saleof advertising space) by type of media(EU-28)Sources: Interactive Advertising
Bureau (IAB), May 2020.

-21.3%

Traditional media estimated change-5.5%

Digital media estimated change

The COVID-19 crisis has hit European
countries in various ways
reach, and the correlation with the tourism industry. As aresult, the crisis has affected the cultural economy in an
extremely varied manner in the Member States, regardlessof the quality and impact of the general economic measuresthey have designed.

Our analysis shows that CCIs have been severely affectedby the COVID-19 crisis throughout Europe. Culture plays
a different role in the economies of countries, dependingon factors such as the dynamics and weight of production
activities, the role of the media and their international

Central and Eastern Europe is hit the hardest …
Central and Eastern European countries are among themost affected, with year-on-year revenue trends ranging
from -36% in Lithuania to -44% in Bulgaria and Estonia.
Hungary, Latvia, Poland and Romania are also part of thisgroup. In all these countries, the performing and visual arts
represent a larger share of the national creative economy
than in the rest of the EU. For example, in Hungary, theperforming arts (with a market expected to shrink by 90%)account for around 10% of the total CCI market, while the EU
average is around 4%. In some of these economies, there areaggravating factors such as more difficult access to financefor SMEs, a lack of social and economic protection for the
self-employed, and pressure on cultural budgets at local andnational levels.

Estimated change 2019-20 in CCI turnover by country
revenues (in % of 2019 turnover; EU-28)
Sources: Eurostat; GESAC; professional organizations; EY modeling and analysis 2020.

40% – 44% decrease
36% – 40% decrease
32% – 36% decrease
27% – 32% decrease… as well as countries where live culturalexperiences account for a bigger chunkof the total CCI market
In these countries (such as Austria, Belgium, the Czech
Republic, France, the Netherlands and Slovenia), CCIs arestill facing a significant decline in turnover (between -30%
and -35% compared with 2019), but slightly lower than wehave seen in Central and Eastern Europe.
The importance of live events and heritage activities has
been an aggravating factor in several of these economies.
The closure of museums, theaters and cinemas; thecancellation of performances, concerts and festivals; andrestrictions on the physical distribution of cultural goods
for bookshops, record shops, galleries, etc., have strongly
affected the entire creative value chain.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

35

In other EU countries, the limitations were less severe, and digitization was more important
A group of Western and Nordic European countries (such as
Finland, Germany, Spain and Sweden) experienced a slightly
less spectacular reduction in turnover (a maximum of -30%).
In some of these countries, the smaller share of hardest-hit
industries in local CCI markets contributed to this difference.
In others, the widespread adoption of legal online offers(games, AV and music) may have been a mitigating factor.
However, the impact of the crisis in these countries is evengreater than in the aerospace industry (-26%), for example.

depend on the ability of governments to consider the
specificities of the creative economy in their recovery plans,by adopting earmarked budgets and targeted support
measures. In any case, all countries will be severely affected,
and none will emerge from the crisis intact. In particular, theshort- and long-term financing capacity of small businesses,
access to insurance solutions for resumption of activities,
and the willingness of the general public to return tocultural venues or to support local creation will need to beaddressed.

However, these figures and illustrations are only a snapshot
to date. The economic situation for culture will largely

The COVID-19 crisis will have a massive and lasting
impact on the entire CCI value chain
The business model of creation depends to a large extent on IP rights
For instance, in the music sector, the authors’ remuneration
model is different from any other model of value creation
because royalties on creative works used in public places
must be collected by CMOs first, before they are paid,
sometime after their use and exploitation. In France, on
average, royalties accounted for 25% of the income ofauthors and performers in 2019 – bearing in mind that 67%
of them had a secondary occupation to sustain their needs.
In 2019, there were 1,145,589 rights holders that weremembers of GESAC in the EU – of which 621,421 received
royalties during the year. Royalties are paid by all sorts ofbroadcasters (television, radio, streaming services, etc.)
and places of public performance (concerts and festivals, aswell as bars, restaurants and shops) with a delay of several
months after the works have been used and enjoyed. In
the AV sector, the business model is based on leveraging
intellectual property (IPs) and the ability to finance featurefilms and non-feature productions on a territory-by-territory
rights exploitation.
This means that all copyright-dependent revenues thatwere not collected during the crisis in 2020 due to curfews,
closures and other health restrictions will be lost in 2021,
at least.
Another direct consequence may be the financial healthof CMOs. They are at the heart of the support system for36

Estimated change in royalties collected worldwide in 2020
Source: Global Collections Report 2020, CISAC, as of 28 October 2020.

35%
of royalties were notcollected in 2020 globally

authors and performers, with millions of permanent andpart-time creators depending on their financial viability.
If the business model of CMOs were to be permanently
affected, this would jeopardize the entire CMO value chain in
the EU countries, as well as Europe’s cultural diversity. Other
contributors, such as technicians, companies or employees
who work on a project-by-project basis, but who do notreceive payment for their work, are strongly affected by thecrisis, as the crisis – sometimes representing months of work
– has abruptly interrupted some projects, sometimes without
any prospect of restarting.

iewpoin

Viewpoint

The fundamental needto come together
by Signe Lopdrup, CEO of Roskilde Festival“

European countries and institutions
must intensify their support forour economy. Because culture andcreativity will help Europe.
The cancellation of Roskilde Festival
in 2020 has had an impact on theartists and their teams, above all. But
it also had enormous consequences
for the hundreds of associations
and organizations that organize
stands or provide services during thefestival. Many of their activities anddevelopments depend on us.

The partners, suppliers and culturalorganizations that provide content
and production capacity have lost not
only income but also, temporarily,
connections and relationships. In
addition, the Roskilde Festival Charity
Society has not been able to fulfil its
fundraising goal, which is to donate allproceeds to projects for children andyouth.

We expect some of Europe’s biggest
events to take place in the summer of2021. It will be different because theworld is different, and the situation isconstantly changing. But we know more
about COVID-19 today than we didin the early periods of the pandemic.
Treatment options are better, tests
have been developed and vaccines arebeing rolled out. This gives us hopethat solutions can be found so that wecan be together again.

When infection rates drop and avaccine becomes more widely available,
the cultural sector will face newopportunities to bring large crowds
together again. Even before the crisis,
Roskilde Festival was taking steps
to diversify and spread its activities
throughout the year to reach diverse
audiences, rather than focusing on asingle event.
European countries and institutions
must intensify their support forour economy. Because culture andcreativity will help Europe. They area fundamental human need: we mustcome together, create together, andlive cultural experiences together inlarge communities.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

37

The financial viability of creators, entrepreneurs, companies
and even public organizations is jeopardized by risingcosts, delays and an uncertain economic outlook
Increase in production costs in the
AV sector due to the COVID-19 crisis
in 2020 (in the EU-28)

+30%
+10%
Lower
estimate
range

Higherestimate
range

Source: Interview with industry experts (FIAPF and IVF).

Production costs have alreadyrisen to ensure compliance withhealth measures. In the AV sector,
production costs rose between 10%
and 30%8 after the first lockdown.
This could compromise the balanceof ongoing activities where financial
viability is already precarious. By wayof illustration, in 2017, the average
net margin for live music in France
was 1.5%, compared with 7.4% for
the entire economy.9 With the lack ofincome, and the inability to recover
expenses lost on production stopped
by the pandemic, companies andindividuals may no longer be able
to invest in the development of new
projects, creation and innovation as
they have done until this year.
In this context, with the absence ofrevenues and consequent inability
to recoup investments added to lost
investments in production stopped by
the pandemic, businesses’ ability toinvest in development of new projects,
creation and innovation – includingfrom a creative standpoint – will
be severely challenged or simply
impossible.
The limitations on production in 2020
(e.g. a theatrical performance forwhich production cannot resume)
will have a negative domino effecton revenues from performances,productions and releases in 2021 and2022. Music, performing arts andAV will be the most affected. French
AV distributors are already expecting
a 10% drop in revenues in 2021
(compared with anticipated turnover in2020) due to interrupted productions
that could not be resumed in 2020.
The production costs of these nonproduced – and therefore unreleased– films will not be reimbursed.
Then, there is a clear bottleneck effect.
In the music and book sectors, many

producers and publishers have delayed
releases originally planned for 2020.
The pressure on marketing costs has
forced several producers to abandon
the promotion of emerging talent inorder to ensure the immediate visibilityof well-known performers.
In addition, it is likely that funding
from the private sector may decreasesignificantly over the next few years.
In Europe, 60% of foundations havesupported arts and culture projects inthe past, according to the OECD. With
the economic crisis, many foundations
and non-profit organizations will facea difficult choice between the mostaffected communities, sustainability
and continued support from sectors
such as CCIs.
The highly competitive environmentof CCI companies can also act as abrake on the global competitivenessof European creative businesses.
With vulnerable financial health andinherent business uncertainty, SMEs
may challenge balanced relationships
between creative businesses andthose involved in wider disseminationof content. In 2020, the market
capitalization of the largest technology
companies (Alphabet, Apple, Amazon,
Facebook and Microsoft) jumped 46%
to US$7.1 trillion, while the turnoverof CCIs declined by 31%.
According to most of our interviewees,
legislation in many EU countries
does not adequately cover thecharacteristics of CCIs, such as thehigh proportion of freelancers (33%compared with 14% in the EU economy
as a whole), irregular income flows
or multi-employment, which makes
creative workers ineligible for someof the national stimulus or protection
programs and thus more affected by
the crisis.

8
9

38

Interview with industry experts (FIAPF and IVF).
Le PRODISS en chiffres, PRODISS, 2019, p. 21.

ocu

Focus

Culture and sport:
creative talents in the faceof the crisis

Sport, on the one hand, contributes enormously tothe economy of the CCIs and, on the other hand, hasfascinating parallels with them in terms of business modeland social functions. Creativity fulfills both activities on
many occasions, whether it is to create social interaction,
to share emotions, or to move crowds with a word froma song on stage or the talent of a player on the field.
Born in Europe, national footballleagues and the UEFA European
Championship, Roland-Garros andWimbledon, the Tour de France andthe Six Nations Tournament areamong the most popular sports
contents in the world. In 2019, theEuropean football market was worth€28.4 billion – equivalent to the musicindustry.
It is clear today that sport and culture
are the two pillars of the creative andentertainment economy. According
to studies by EY and the European
Commission on the economies ofculture and sport respectively, theGDP of both combined amounts to€616 billion in terms of value added
and they employ 14.1 million people,
representing 4% of the European
economy and 6% of its working
population. Long before and probably
well after the COVID-19 crisis, thisis more than telecommunications,high technology, pharmaceuticals,
automotive and aerospace combined.
The economic similarities are alsostriking, and so – unfortunately – arethe consequences of the COVID-19
crisis. Sports industries will haveexperienced a 15.7% drop in 2020:
clubs, media rights, travel activities,
retail outlets and sports facilities
have been considerably affected, withsome losing more than 50% of theirrevenues from one year to the next.

Many factors impacting the sport
sector affect CCIs and vice versa.
Firstly, the cancellation or restrictionof events has led to a sharp drop inrevenue and directly weakened thefinancial situation of SMEs, events,
facilities and tourism stakeholders.
On the corporate side, sponsorshipbudgets have already decreased, as
have media purchases. In addition,
the reduction in government andhousehold spending will have an
impact on the amounts invested
in sport and culture, and in theinfrastructure they often share.

The decline in revenue could continue
in the coming months, due to thegeneral economic situation, until
the return to a healthy situation
acceptable to the majority.

Sport and culture are linked by thefact that they are the two main
sources of entertainment in Europe
and the world. They play many
similar roles in education, social
inclusion and diversity. Both are being
completely transformed by digital andgreen transitions.
Finally, they share a common
interest in the various initiatives
and measures taken by the EU andMember States. Together, they willplay a key role in restoring positivity
in our communities and contributeto the recovery of the European
economy.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

39

Finally, the crisis could lead to an unrecoverable lossof talent, consumer and business confidence
The economic and social impacts felt in 2020 may only be
the most visible part of the crisis for CCIs, as the knock-on
effects could be felt until 2025, according to industry
experts. Here are a few illustrations.
The appetite for careers in culture could diminish
considerably. According to a survey by UK Music, 34% ofmusicians are considering giving up their careers in the
UK as a result of the COVID-19 crisis. In the Netherlands,
live performance unions estimate that around 40% of theirmembers are looking for work outside of CCIs.10 If it is not –strictly speaking – a career change, there is a good chance
that, because of the duration of the crisis, what was supposed
to be temporary for some people may become permanent.
This long-term crisis will weaken businesses and test theirability to restore public confidence. The link between theperforming arts, theaters, operas, shows and cinemas andtheir audiences could be questioned for years to come andwill depend on the conditions for emerging from the current
crisis and confidence in a return to a new normal life. The
figures show that this is a collective challenge – also forpolicymakers – since the perception in October 2020 wasthat going to shows, theaters and cinemas made people
as apprehensive as taking a plane trip. Indeed, 46% ofrespondents said they would be uncomfortable going to aconcert for several months, and 21% said they would beuncomfortable going for several years. The challenge for the
coming months is to restore confidence.

From a broader perspective, the promotion of cultural
diversity by fostering diversity of creation, as well as
diversity in the range of distribution opportunities – whether
online or offline – is essential to ensure competitiveness andmaintain the required level of skills and entrepreneurship in
CCI value chains. This is all the more difficult because part of
the government support, which is essential for CCIs, is under
threat. In the EU, 54% of public spending on culture, leisureand religion comes from local authorities, whose finances
will be hard hit by pressure on spending and reduced
revenues, according to the Organisation for Economic Cooperation and Development (OECD).
If a specific strategy is not put in place at European andnational levels, and if legislation does not protect free trade,encourage private investment and set conditions for its
recovery, particularly with regard to Intellectual Property
Rights (IPR) violations, Europe’s cultural diversity is at risk ofbeing impoverished.
So far, those who face the greatest financial difficulties arefar from assured of survival. For those facing less financial
difficulty, a still fragile financial health may foster risk
mitigation among cultural entrepreneurs, thus limiting
investment in the emergence of new talent in the coming
years. Consequently, the ability of CCI sectors to contribute
fully to the EU economy and employment recovery will slow
down.
10

Survey on Stage, Kunsten ‘92, June 2020.

How long it will take for consumers to feel comfortable

Shopping in agrocery store

58%

Going toa theater/
cinema14%

Going toentertainment/
spectator events(e.g., concerts)

12%

Travellingby plane

11%

Going ona cruise

8%

10%

Days

Weeks

21%

18%

46%

15%

46%

12%

29%
Months

16%

6%

6%

29%

34%

%

4 2

21%

43%

%

15%

5%

19%
Years

Never

Source: EY Future Consumer Index Survey, October 2020 (total respondents: 14,445 respondents).

40

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

41

03

After COVID-19
Rebuilding Europe42As a result of in-depth research and interviews
conducted by EY and based on the opinions of experts
and organizations representing the CCIs, the following
challenges have been identified as priorities for therecovery and growth of the creative economy.

Challenge one: finance
Provide massive public funding and promote private investment in cultural andcreative businesses, non-profit organizations, entrepreneurs and creators: twoindispensable levers to support and accelerate their recovery and transformation
Proposals:• Earmark at least 2% of the
Recovery and Resilience Facility
for CCIs, as proposed by theEuropean Parliament, both in
the EU legal framework and innational strategies;• Ensure that sufficient structural
funds and cohesion policy
support instruments — suchas the Coronavirus Response
Investment Initiative (CRII),
the Coronavirus Response
Investment Initiative Plus
(CRII+) and REACT-EU — areused for the recovery andreconstruction of CCIs,
identified by the European
Commission as one of thestrategic industrial ecosystems
essential for Europe's recovery;• Increase funding for theguarantee facility for thecultural and creative sector inorder to widen SMEs' access toloans;• Increase funding for
cultural infrastructure fromthe European Regional
Development Fund andCohesion Fund 2021-2027 andthe Digital Europe Programme;
encourage European cultural
enterprises to start up anddevelop through specificsupport schemes;• Support European commercial
collaborations between
operators at the development
and financing stage, inall sectors and activities
where such cross-bordercollaborations are possible andefficient;• Examine how complementaryand specific insurance schemes
for cultural activities (events,
production, performance, etc.)
could compensate for sudden
and long-lasting lockdowns orcurfews;• Ensure that the precarious
working conditions offreelancers and the situationof creators are also taken
into account through specificfunding programs or in theframework of support to CCI
enterprises at European,national and local levels.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

43

Challenge two: empower
Promote the EU's diversified cultural offering by ensuring a solid legal
framework, allowing for the development of private investment in production
and distribution, providing the necessary conditions for an adequate return on
investment for businesses and guaranteeing adequate income for creators
Proposals:• Ensure a rapid and effective
implementation of the recently
adopted directives on copyrightand related rights in order toenable creators and the wider
rights holder community, as
well as cultural enterprises, tobetter harvest the value of theonline market and new modesof exploitation;• Ensure strong protection andeffective enforcement of IP, on
which the viability of culturaland creative activities depends
to a large extent; in particular,
during the forthcoming EU
actions on online responsibility;• Encourage investment inEuropean content and ensure
more presence and visibility for
European works are provided
in the online distribution
environment;• Provide fair remunerationand sustainable conditions forcreators and their business
partners; allow for the diversityof works and distribution
opportunities to flourish;
ensure that current andfuture legal and regulatory
frameworks preserve thevariety of business models
deployed by the CCI ecosystem

44

by supporting commercial
freedom to build tailor-madefinancing and distribution plansfor different types of content;
guarantee cultural diversity inthe production and distribution
phases;• Ensure that platforms basedoutside the EU also comply
with EU rules that provide forthese conditions; in particular,
regarding the acquisition of IP
rights;• Promote cultural
entrepreneurship for future
generations by incentivizing
mandatory courses on cultural
entrepreneurship, sustainable
management, legal training
and European programsin arts schools; incentivize
partnerships between
engineering schools and art
schools to foster tech andcultural entrepreneurship.

Challenge three: leverageUse the CCIs – and the multiplied power of their millions of individualand collective talents – as a major accelerator of social, societal andenvironmental transitions in Europe

Proposals:• Use the “power of culture” toeducate, influence, promote anddemonstrate to the public thevalues and ease of sustainableliving in the context of theEuropean Green Deal;• Leverage broader cross-sectoral
links, especially with tourism,
research and innovation, energy,transport and active mobility,
and construction, to reduce thecarbon footprint of CCI activities
wherever possible;• Promote and strengthen theEuropean model of a social
economy, where key players incultural and creative sectors, andnon-profit grass-roots entities
and associations, can help shape
the EU’s economy and welfare
through sustainable, inclusive,
democratic and cooperative
programs;• Promote freedom of creation
and reaffirm the implementationof EU treaties with regard to thepromotion of cultural diversity;• Promote efforts carried out by
the CCIs in reaching gender anddiversity balance, off and onstage and screen.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

45

46

Interview

ntervie

CCIs maintain Europe’s
cultural and artistic unity

An interview with Serban Enache, CEO of Dreamstime

How has the crisis already affectedyour life, your activity, your sector?

The stock photography sector has
not experienced a significant decline,
thanks to the increase in demand
from online businesses. However,Dreamstime contributors have seen
their personal projects and revenues
decrease due to the cancellationof public events. In addition to theeconomic situation, all the artists
confessed to having lost theiremotional connection with theiraudience, but they also say that theextra time spent with their families
has been a big positive.

“

years to rebuild a sector that iscurrently overshadowed by social,political and economic measures.

As artists and photographers areforced to focus exclusively on building
a strong online presence to market andsell their work, it is essential that theinternet and social media platforms
remain a level playing field.
What can Europe do to help thecultural economy?

The cultural and creative industries
have the particular characteristic of
being universal and bringing together

Without adequate support, it is likely to take years
to rebuild a sector that is currently overshadowed
by social, political and economic measures
How will your sector be affected by
the COVID-19 crisis in the coming
months?

Photographers and photojournalists
specializing in events brought muchless diverse content this year. How
the creative sector will be affected
in 2021 depends on how quickly
we can resume our pre-pandemic
activities and the willingness of local
governments to invest. Without
adequate support, it is likely to takeotherwise incompatible groups
of individuals. They can maintain
Europe's cultural and artistic unity
when there are so many reasons todivide it.

The EU should create, support andendorse a viable framework forcountries to develop and exchange
cultural projects, while at the sametime creating a flexible framework forartists living from their art.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

47

Interview

ntervie

New cultural experiencesin the virtual world
An interview with Alex Loscos and Scott Cohen

How has the crisis already impacted
your activity?

AL: BMAT has been able to resist. We
work with CMOs, publishers, labels,
broadcasters and digital service
providers, and we provide identificationand data services across radio,
television, clubs and digital platforms.
There are cells in this matrix thathave basically disappeared, such as
tracking music in clubs, but we’vebeen able to pivot into others, suchas digital. We’ve managed to absorb
the impact this year, but we expect asecond wave in 2021, mainly due to theroyalty processing cycles. No matter
what, we believe the complexity of
BMAT, in terms of number of services
and customer types, makes us more
resilient than others.
What transformations will your activity
experience in the wake of the crisis?

AL: Disintermediation is a force thatconcerns all sectors of activity. We
expect this crisis to accelerate it.
Stakeholders will pile on the pressure,much more than any time previously,
for better services and better prices.
We believe the future will requirecompanies to focus on their corecompetences and establish alliances foreverything else.
What are your expectations for culturaland creative industries in Europe?
SC: People are essentially recreating
the experience of a gig online. They’regoing to accelerate that and create a
new category. So, I think we're goingto start seeing new experiences in48

the virtual world, which could be
virtual reality, augmented reality, thatwill exist online in a digital form. In
a way, this has become clearer with
the COVID-19 crisis. People will use
cultural works as part of the online
experience or do other things online
when they go to a virtual concert or
festival. There is a lot to gain from thischanging behavior for all CCIs.

Alex Loscos
CEO BMAT

What can Europe do to help the
economy of culture?

SC: Think what The Beatles do forLiverpool. Tourists from all over theworld show up there to go to hotels,
restaurants and museums. If you fosterthat kind of creativity, it can happen,
but if you turn a blind eye, it neverwill. You have to put money behindthe schemes to ensure that it happens– that you can grow the next global
superstars out of Europe.
From another perspective, every study
in the world shows that when children
learn to play musical instruments, they
do better in math and science. If you
want a population that is cutting edgein math and science, then make surethere’s music education in school.
We also need to get more softwareand hardware, and faster 5G internet
connections, into everybody’s
hands. We don’t want to expand thedigital divide. It is the combinationof infrastructure, technology andcreativity that would make the change
for the future of the (digital) economy.

Scott Cohen
Chief Innovation
Officer, RecordedMusic at WarnerMusic Group,
Founder of The
Orchard, Founderof CyborgNest

Interview

ntervie

New rituals for the
21st century

An interview with Chris Dercon, President of the
Réunion des Musées Nationaux – Grand Palais

How has the crisis already affectedyour business?

We used to buy tickets, go to a show
or a museum. Today, we have becomeused to consuming culture differently.
We have built institutions such as the
Louvre for local visitors and tourists,
who will come back, but slowly andprobably in a different way. We knowthat the younger generations are
doing much more in the digital world.
We may see more hybrid culturalexperiences in the future.
There are also logistical problems.
For example, Valery Gergiev cannot
conduct an opera at 9:00 p.m. inPetersburg, arrive at noon to work in
Rotterdam and go to the Paris Operafor the evening. Similarly, shipping
exhibitions costs us five times morethan before because of air freight
limitations.

What changes has the crisis createdor accelerated?

We have to invent new exhibition
formats, work locally with artists,
producers and technical partners. We
have to produce works much more
quickly, mix different artistic genres
and events. We need to rethink therole of events and cultural destinations
and examine the expectations of the
public.
We need to reinvent the businessmodels of our institutions, especiallyin the context of drastic budget cuts:
new programming methods, new waysof selling tickets, more monetizationof our digital traffic. And we will haveto be more sustainable.

What can Europe do to help thecultural economy, and how canculture help Europe?

The situation would not be so bad if
there was a common action plan at
European level, but each country is
doing something different. Closing
borders has led to tighter budgets anda kind of renationalization of culture.
On one hand, there is globalization,
but at the same time, we are talking
about national identities.
Let us define the minimum
investments that European countries
should make in culture. Let us
stimulate collaboration. Let us avoid
such an unbalanced cultural scene.

Let us be European and local.
European projects may have been
guilty of conceptual approaches in
the past. The solution is to identify
common themes that respond tocommon problems, such as shrinking
cities. We should promote “secondary
cities” instead of having everyone
flock to Paris, Berlin, Rome or
Amsterdam.

And instead of using a strictly
economic perspective, culture should
be seen as a form of humanistic andanimistic behavior. When I decideto represent the climate crisis withpieces of paint and shouting on stage,
I am doing something humanistic,animistic. It's a ritual. We haveto invent new rituals for the 21st
century. If ancient theatre was theplace of ritual for Greek culture, if thecathedral was for the Middle Ages, wemust invent another place for modern
times. Digital is not the place of
rituals. No way, José!

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis

49

Detailed methodology
Evaluation of CCI market and employment in 2019
Objectives

Indicators

The main objective of this study is to produce a set ofcomparative and qualitative studies to give a snapshot of
the economic role of CCIs in Europe, and to show how, andto what extent, they may be a driving force for European
economic growth.

• Turnover: the study adopted an approach based on final
consumer markets, primarily taken at retail prices. The
approach takes revenue at the end of the value chain,rather than adding up revenue from all stakeholders
involved in individual parts of the value chain. For instance,
to measure the economic value of the performing arts,
equipment rental and catering have been excluded, as
they can be considered intermediate costs of venue
management and are already included in revenues fromticket sales.

Definition and scope
CCIs comprise industries producing or distributing culturaland creative goods and services, defined in 2005 by
UNESCO as “activities, goods and services, which …
embody or convey cultural expressions, irrespective of
the commercial value they may have.” Beyond this broad
definition, we have adopted a sector-based approach inorder to consider the specifics of each industry. Our reportcovers 10 sectors. “TV and movie” were merged under AV,
to best reflect sector changes.
For the sake of rigor and consistency, we have restricted
our analysis to a scope that does not include certain other“creative activities,” such as fashion, jewelry or industrial
design – nor sectors where creativity plays a central role,such as luxury goods or gastronomy, which are sometimes
included in CCI statistics, such as those of Eurostat. We
decided to stay close to the UNESCO definition of CCIs
as activities “whose principal purpose is production or
reproduction, promotion, distribution or commercializationof goods, services and activities of a cultural, artistic or
heritage-related nature.”
The geographical scope of the study is the EU and the UK,
known as EU-28. Unless otherwise stated, all references tothe EU in this study refer to the scope of the EU-28.
This study is based solely upon revenues of the culturalindustries themselves. It takes no account of indirect impacts
upon related economic activities such as tourism.
Data collection
The study has adopted a “bottom-up” approach.
Where aggregated data does not exist, the study has
constructed reliable estimates based on interviews with key
organizations, sector publications and ad hoc statisticalmaterials, as well as verified market assumptions. Data
collection relies primarily on reliable industry sources atnational, European and global levels. The main databases
used include Eurostat Structural Business Statistics, theEurostat Labor Force Survey, IFPI Global Music Report 2020and national statistical bureaus.
A total of 25 interviews and 2 workshops were conducted,
with organizations covering the 10 sectors of this report tovalidate and corroborate EY’s data modeling and analysis.

50• Gross value added: our evaluation relies on turnover/grossvalue-added ratios for each sector. We compute thoseratios based on Eurostat Structural Business Statistics andprofessional organization reports, when available.
• Jobs – permanent, temporary and part-time workers,
including self-employed: employment is expressed in
numbers of jobs, not in full-time equivalents (FTEs).
This is explained, to a large extent, by the lack of dataon employment in CCI-related EU NACE (Nomenclature
statistique des Activités économiques de la Communauté
Européenne) codes, which sometimes fail to countperformers and other creative works owners. Employment
figures include jobs in both public and private sectors.
To ensure consistency, the study mainly used data recorded
in 2013, 2018 and 2019. However, when reliable data was
missing, the study provided estimates based on annual
growth forecasts or data analysis from the main European
markets.

The study's ten cultural and creative sectors
AdvertisingArchitecture
Audiovisual
Books
Music
Newspapers and magazines
Performing arts
Radio
Visual arts
Video games industry

Evaluation of the impact of the COVID-19 crisis on CCIs
The analysis of the COVID-19 crisis' impact on CCIs is basedon four principles:• We based our analysis on the entire year of 2020, taking
into account the two waves of COVID-19 in Europe and therestrictions applicable to the 10 sectors within the scope.
• Our main sources are the impact surveys conducted byprofessional organizations, interviews with industry experts
and additional market research.
• We have assessed the impact for each subsector separately,
as well as for each market segment. For instance, in themusic sector, we have made different estimates for digitalsales, synchronization revenues, live music and physicalsales.
• We have made the most accurate estimates possible, at
national level, by groups of countries or, at European level,
according to the information available for each subsector.
• Our hypotheses and recovery perspectives were tested withindustry professionals in each sector over the course of 25
interviews.

Main sources• Bilan économique 2019, Le Bureau
Export, 2020.
• Boosting the competitiveness ofcultural and creative industries
for growth and jobs, European
Commission, 2020.
• Cultural Climate Barometer,
Budapest Observatory, 2018.
• Culture: Urban Future, UNESCO,2019.
• Culture in crisis: Policy guide for a
resilient creative sector, UNESCO,2020.
• Culture Shock: COVID-19 and thecultural and creative sectors, OECD,
2020.
• Culture Statistics, Eurostat, 2019.
• En Scène, PRODISS-EY, 2017.
• Résultat de l’etude d’impact dela crise sanitaire COVID-19 surl’économie des galeries d’art, Comité
Professionnel des Galeries d’Art,
2020.
• Europe’s digital migration during
COVID-19: Getting past the broad
trends and averages, McKinsey,
2020.
• European Book Publishing Statistics
2018, Federation of European
Publishers, 2018.
• Film production in Europe 2016,
European Audiovisual Observatory,
2016.

• Facing disruption: the cinema value
chain in the digital age, Elisa Salvador
and Jean-Paul Simon, Pierre-Jean
Benghozi, International Journal of
Art Management, 2019.
• General government expenditure byfunction (COFOG, indicator gov_10a_exp), Eurostat, 2020.
• Global Collections Report, CISAC,
2020.
• Global Collections Report, CISAC,
2019.
• Global Games Market Report,
Newzoo, 2019.
• Global Music Report, IFPI, 2020.
• ISFE Key Facts, Interactive Software
Federation of Europe (IFSE), 2020.
• Key Numbers – COVID-19 Impact on
2,600 venues & clubs in Europe, Live
DMA, 2020.
• L’économie mosaïque, EY, 2019.
• Les investissements de l’UE dans lessites culturels gagneraient à êtremieux ciblés et coordonnés, Cour desComptes Européenne, 2020.
• Modelling audiovisual sector revenue
flows in the EU and test case on
impact of COVID-19 on industry
revenues, European Audiovisual
Observatory, 2020.
• Museums around the World in theface of COVID-19, UNESCO, 2020.
• Music by Numbers 2020, UK Music,
2020.
• 2020 World Press Freedom Index,
Reporters Without Borders, 2020.

Rebuilding Europe – The cultural and creative economy before and after the COVID-19 crisis• Structural Business Statistics(indicator sbs_na_dt_r2), Eurostat,2020.
• Special Eurobarometer 466,
European Commission, 2017.
• The Architectural Profession in
Europe 2018 – ACE Sector Study,
Architects’ Council of Europe, 2018.
• The Digital Economy and Society
Index, European Commission, 2020.
• The Economic Impact of Music in
Europe, IFPI, 2020.
• The International Communications
Market Report 2017, Ofcom, 2018.
• The impact of the pandemic onpublishing in Europe, Federation ofEuropean Publishers, 2020.
• The Rise of Digital Audio Advertising,International Advertising Bureau
Europe, 2019.
• World Film Market Trends, European
Audiovisual Observatory, 2019.
• World Press Trends 2019, World
Association of News Publishers,
2020.

51

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