Creative Economy: A Feasible Development Option

Tajikistan), underscores the promise thatmobile technologies hold at both the nationaland regional levels. The study showcases bestpractices with an emphasis on support activitiesthat can be undertaken by governments andtrade-support institutions. The study confirmsthe potential of mobile distribution channelsfor the local music industry. The Internet providesan exceptional opportunity for producersof creative content, such as music and film productions,to offer their products to Internetusers from all over the world in the form ofdigital files. It also emphasizes that whateverthe technological options considered, with thesupport of organizations such as ITC, creativeentrepreneurs from developing countriesinvolved with the music industry have yet toestablish a new marketing network, online and offline. Thereare three principal ways to distribute music to a large numberof potential consumers on the Internet:■ contract with a digital distributor;■ sign a direct agreement with an online service; and■ create one’s own downloading platform.Figure 5.1AggregatorInternational tradeThe available data show that world exports of recordedmusic tripled from $9.6 billion in 2002 to $26 billion in2008. This spectacular increase — 17.8 per cent averageannual growth — represents the fastest acceleration amongall creative industries exports. Compact discs are the mainphysical good used for trade analysis of recorded music; theynow represent more than 99 per cent of world music exports(see tables 1.2.A and 1.2.B in the annex).International trade in music continues to be dominatedby developed economies. As a group, these economiesaccounted for about 90 per cent of total exports of recordedmusic (mainly CDs) over the period under review. Theirexports increased sharply from $9 billion in 2002 to $22.5billion in 2008. Similarly, imports by developed economiestripled, following the same trend, reaching $22 billion in2008. Developed countries’ exports and imports of musicCDs accounted for about 80 to 90 per cent of world tradein music goods. Among the top 10 developed economies,the market share remained mostly unchanged since 2002(table 5.14). This demonstrates that the majority of musicA summarized version of the online music value-chainOnlineMusicServiceSource: ITC Digital content: Trade in SoundsConsumersProduction CompanyWebsite ofthe ProductionCompanycreated in the South is recorded, and exported, by recordingcompanies in the North.Key players in global marketsWorld trade in music is driven by developedeconomies. As shown in table 5.14 and chart 5.11, the fivetop exporters collectively command about 60 per cent ofglobal markets. Germany predominates with a market shareof 21 per cent, followed by the United States, theNetherlands, Austria, Ireland and United Kingdom. All ofthe top players benefited from market growth in the period2002-2008, particularly Germany, which reinforced its leadwith a growth rate of 23 per cent. What these figures do notshow is the oligopolistic market structure of the world productionand distribution of music. This structure is dominatedby four vertically integrated conglomerates that togetherand through their subsidiaries retain nearly 80 per cent of theworld market for recorded music. This situation inhibitsmusic production by independent local producers in developingcountries. However, downloading music from the Internetis gradually transforming this picture, as indicated earlier.Despite the low level of participation of developingeconomies in the world trade of recorded music, theirexports increased to $3.3 billion in 2008 from 2002 to2008. Economies in transition had $274 million in exportsof recorded music and $458 million in imports in 2008.Developing economies and economies in transition are bothnet importers of recorded music, primarily because themusic is created, recorded and commercialized by transna-5International trade in creative goods and services: Global trends and featuresCREATIVE ECONOMY REPORT 2010145