Future of Creative Industries - Implications for Research ... - Europa

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Table 7: The share of booksellers (in %)1991 1996Independent bookstores 32 18Chain bookstores 22 25Book clubs 17 18Mail order 5 4Discount stores 7 9Warehouse clubs 3 6Other 15 19Source: Caves, 2000, p. 155Both in the book publishing industry and in the record industry there is a concentration ofproducers: in 1993 the four largest book publishers received 30 percent of total wholesalebook-publishing revenues. This effect is even more pronounced in the record industry, in1993 the six largest record companies distributed about 80 percent of all records (idem, p.157)3. The issue of ‘cost disease’ in the performing artsA long debate in the economics of arts has been the low influence of technologicaldevelopment on performing arts, leading to the so called ‘cost disease’ phenomenon (Caves,p. 229, Throsby, p. 119, citing Baumol and Bowen). In the long term the real income ofpeople grows because of the innovation that increase the quality of goods and services as wellas because of the increasing productivity based on technological advance, which reduce thecost and the time to produce them. The rise of productivity has the effect of diminishing thelabour hours, inclusively in several creative industries. However, it is not case for all of them.The performing arts seem to be the losers in this game, as the number of hours and resourcesneeded for a performance is the same as it was used to be. As a result, the real wage rises inthe whole economy cannot be compensated by the increasing of productivity in theperforming arts (and to a lesser extend in other art realms) as in other sectors of the economy,pushing to an ever-increasing gap between costs and earned revenue in art organisations ingeneral and in performing arts in particular, at a pace driven by the labour productivity in therest of economy.Figure 18: Performing arts value chainCREATION SUPPLY DEMANDcreator director performers production-venue critics consumerENCODINGDECODINGgoods & servicescapital & marketingINPUTSSource: Richard Brecknock, 2003, p. 236
Throsby shows that the implications of the cost disease phenomenon have been clarified overthe thirty five years so since Baumol and Bowen first put it forward. The problem is moreacute in performing arts than in others because many of the project costs in this field are fixedand the productivity rate is quite stable. The individual and social actors of the creativeindustries have been trying to evade the problem using production and distributionadjustments: technical changes were introduced in scene design, sound or lighting facilities –enabling larger audience for a live performance; media reproduction technology extendedconsumption much further; the number of performances have been increased in the case ofperforming arts or by substituting creative products in visual arts; partnerships between artorganisations and corporate enterprises have been continuously developed. Beside thesefactors, rising consumer incomes and changing tastes led to an increasing demand for arts,even if the demand is spread non-equally among the different art forms. According toThrosby, the gap will never increase so much as to be terminal for the sector: “the combinedimpacts of production adjustments, increased demand and generally rising level of unearnedrevenue have countered any tendency towards a secular rise in deficits among art companies,suggesting that although the cost disease will doubtless continue to present such companieswith difficult problems, it is unlikely to be terminal” (Throsby, 2001, p. 119). However, evenif the cost disease effect is not terminal to the high culture realm in general and performingarts in particular, it still might shrink the sector, legitimising the necessity for public subsidyand financial support from other sources.4. Toys and gamesAs Caves shows, lots of new toys are created and distributed on the market each year (about6000 just in the US market). Some remain on the market on long time (Barbie, etc.) otherdisappear after only a few years (Cabbage Patch Kids), but most of them disappear after oneseason. About 60 percent of toys are sold in the last quarter of each year. The promotion oftoys registered a shift from the retailed channels to the massive promotion televisioncampaigns, with effects not only on the level of promotion but also on its substance. That isbecause they can be presented in action directly to the child, while the retail channels messagewas addressed mainly to the adult buyers. The toy innovation is made mainly by companieswhich are designers of toy and by the independent professional designers. The traditionalroyalty rate received by an independent designer is 5 percent of net wholesale revenuerealized (according to Caves, 2000, p. 211-213).For video games, the producers offer a combination of a hardware console and the gamessoftware which will be played on it. In 1998 the U.S. market was dominated by Sony (51percent of hardware - focused on older players) and Nintendo (41 percent – oriented to the 10-to-14 age group). The price differentials are explained by the following: Nintendo’s games areon cartridges – quite expensive to produce, but fast playing; Sony’s games are on CDs –cheap to produce but slower to play. While console selling gets thin profit margins, the gamesmake much bigger profits. As a consequence, Sony sell a large number of CD-based gamesfor moderate prices, Nintendo a smaller quantity of very popular games but at higher prices(Caves, idem, p. 215).37
Page 1 and 2: WORKING DOCUMENTEUR 21471
Page 3 and 4: EUROPEAN COMMISSIONFORESIGHT WORKIN
Page 5 and 6: AcknowledgementsCarmen Marcus works
Page 7 and 8: 1. Overview of the field1.1. Matter
Page 9 and 10: 1.1.2. What type of industries does
Page 11 and 12: Another feature of the large corpor
Page 13: freelancers. Moreover, among them t
Page 16 and 17: twentieth century. In its logic, du
Page 18 and 19: “The culture is ‘street-level
Page 20 and 21: 3. European characteristics3. 1. Eu
Page 22 and 23: European Audiovisual Observatory st
Page 24 and 25: 3.2.4. Book readingBeside the high
Page 26 and 27: 4. Technological development releva
Page 28 and 29: making content protection as their
Page 30 and 31: However, according to Miles, there
Page 32 and 33: 5. Possible research needs based on
Page 34 and 35: A useful study would aim to analyze
Page 36 and 37: In this context, the European Parli
Page 38 and 39: Annex I. Specific organisation patt
Page 42 and 43: 5. Formal training, apprenticeship
Page 44 and 45: BibliographyAustralian Government,
Page 46 and 47: European CommissionEUR 21471 — Fu

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