The bottom line of digitisation and the Internet is surprisingly positive for the creative sector in the U.K. In spite of significant structural changes, the revenues of the five major industries book publishing, press publishing, film & television, gaming and music have increased to more than GBP 30 billion since 2001; translating into a stable yearly growth rate of approximately one percent. Revenues from digital businesses even grew by more than 10 percent per year to almost GBP 9 billion. The underlying study “The Digital Future of Creative U.K.” by Booz & Company and commissioned by Google has been released today in London.
The Internet in particular has driven media consumption of Europeans to record levels. On average, Britons spend almost five hours per day with media products and services. Two hours and 20 minutes of that are dedicated to watching TV and approximately 50 minutes are spent with newspaper and magazines. The Internet accounts for more than one hour and 40 minutes, more than twice as much as seven years ago. In parallel, monetisation of content has improved significantly. European consumers spend on average more than 3 pence per hour on media consumed online. That represents an increase of almost 140 percent since 2003. In comparison: the average monetisation level per consumer is 15 pence per hour for film and television content and roughly 20 pence for print products.
Creators also benefit from digitisation according to the authors, mostly in form of easier access to distribution and new communication channels with audiences. In the music industry, for example, the absolute value generation for artists and labels stayed constant over the last 10 years. In contrast to a share of only 32 percent from a typical CD sale, they enjoy a 66 percent share of a regular download, because margins for production, distribution and retail are minimised in this model.
“Consumers and creators are the great beneficiaries of digitisation in the creative sector,” says Hannes Gmelin, principal and digital media expert from Booz. “But companies in the creative industries can also thrive as long as they are able to create relevant consumer experiences and focus on the two growth areas digital and consumer-paid content.”
For the European market, the study comes to similar conclusions. Total revenue of the focus industries increased by GBP 26 billion since 2001 to almost GBP 175 billion. Twenty-five percent or GBP 43 billion of this revenue can be attributed to digital businesses with a yearly growth rate of 11 percent, slightly more dynamic than the respective U.K. trend. But with a total daily media consumption of only slightly more than four hours and an Internet share of 1.3 hours, the European creative sector still has some way to go to fully catch up in the digital environment.