EU culture biz set for growth, report says
EmptyBRUSSELS -- The multibillion-dollar European film, video and broadcasting sectors are set for significant growth over the next few years, according to a report published Wednesday by the European Commission.
The 350-page report says that spending in the broadcasting sector now totals $87 billion in the EU, a figure projected to rise about 6.5% a year to $121 billion by 2009.
The film and video sector, which generates annual spending of about $27 billion, is expected to rise 7.7% annually to $39 billion by 2009, while spending in broadcasting should rise to $121 billion from its current $87 billion.
The report lists a number of future trends for the European TV market. It says Europe will experience growth in multichannel television, spurred by digital terrestrial TV rollout. Multichannel penetration, now mostly reliant on subscription services, will be fueled by free-to-air digital TV; its penetration is estimated to reach more than 70% of European households by 2009. As a consequence, multichannel advertising is expected to increase 11.2% in Western Europe.
Although satellite subscriptions have been growing rapidly in recent years, their growth rate will slow down, challenged by the emergence of new digital platforms. As a consequence of the growth in both TV networks and TV subscription services, the European TV market will be characterized by increasing audience fragmentation, the report predicts.
The figures for film and video reveal that the current gross theatrical boxoffice is $6.8 billion but is expected to grow 21.2% by 2009; the video retail and rental sector is worth $3.6 billion but is expected to fall 51.8%; and the DVD rental and retail sector is $11.5 billion, expected to grow 21%.
From an economic point of view, film represents a relatively minor sector in Europe compared with other cultural industries. The report says that the European film industry suffers from key structural deficiencies: fragmentation along national borders, undercapitalization and difficult access to finance.
The European recorded music market is currently worth $14 billion and is expected to grow 7.2% annually to reach $20 billion in value by 2009, the report says. Traditional physical formats are expected to continue to decline at a rate of 1.9% until 2009. However, falling sales of CDs should be offset by the uptake of digital music. Therefore, total spending in recorded music is expected to reach $20 billion in value.
The report says the European video games market is currently worth $6 billion, with 19.1% annual growth until 2009 expected to reach a spending total of $14.3 billion.
The report covers the entire cultural sector in the EU, which it said contributes 2.6% of the EU's GDP, employing at least 5.8 million Europeans -- more than the total employed in Greece and Ireland put together.
The sector's profit is more than $833 billion -- more than twice that of the car industry -- and its growth over the past five years was 12.3% higher than the growth of the European economy in general. Long disregarded as a serious economic asset, the report touts the creative and cultural sector as an engine for future economic growth.